In situations when foreigners in Singapore desire to either form a business or extend their current activities in Singapore, a Nominee Director is a person chosen to fill the legal need of a local director.
Despite having the same duties as a normal director under Singaporean law, a Nominee Director is seen as inferior to a regular corporate director and is easily available from a nominee director service. Nominee directors often do not have executive power to make decisions for the corporation to which they are appointed.
However, Nominee Directors are allowed to exercise the usual transparency and monitoring inside the organization they work for to disclose any unlawful behavior and make sure the business is compliant with the law.
Who may be a company’s nominee director?
The Companies Act of 1967 mandates that a Nominee Director has one of the following qualifications:
- Permanent Residency in Singapore
- Singapore Nationality
- A director’s employment pass from the firm they work for, together with proof of a permanent address in Singapore
Statutory Conditions for a Director Nominee
The purpose of the regulatory procedures put in place to appoint a Nominee Director is to safeguard your business and the markets you serve.
The prerequisites that a potential Nominee Director appointed by the top corporate tax services Singapore must fulfill before hiring are listed below:
- He or she hasn’t engaged in dishonesty or fraud crimes
- He/she does not have a court-issued disqualification order against them
- He or she lacks three or more High Court rulings requiring conformity with the Companies Act within five years
- He or she hasn’t broken the Companies Act three or more times in the last five years
- He or she does not have an unaddressed bankruptcy
Additionally, before taking the post, any candidate intending to be a Nominee Director must complete Form 45. Form 45 lists the criteria that would reject a candidate as well as the duties that a Nominee Director would need to do.
What duties and obligations do nominee directors have?
The main responsibility of a Nominee Director is to make sure that the business they work for complies with Singapore’s corporate rules. However, they also perform additional duties that are comparable to those of a conventional business director, such as monitoring corporate governance and using the best CSR practices. Nominee Directors are required because, if a foreign business violates Singapore’s corporate regulations, the company directory may quickly dump their firm and leave Singapore with no repercussions if no accountability was put on a Nominee Director.
What are the nominee director’s powers?
A Nominee Director is appointed to fulfill the Corporations Act requirement and to offer responsibility to the companies that have employed them, hence their position is regarded as a non-executive function. A Nominee Director might have very little to no power.
Despite this, individuals are still required to take responsibility for the choices the business takes. As a result, Nominee Directors are given complete access to all corporate activities so that they may report any unlawful behavior.
As a result, they are not exposed to excessive risk, which lessens the possibility that businesses may use Nominee Directors as a way to operate in Singapore.
Does your company need a director nominee?
A Singapore-incorporated firm is required by the Companies Act to have at least one local director. You will need to hire a Nominee Director if you are a foreigner who wants to form a company in Singapore but is unable to meet the requirements of having a local director. This also applies to foreigners who currently have a Singapore Employment Pass and who are limited to being the company’s sole shareholders.
You may get in touch with a trustworthy corporate service provider to discover a Nominee Director for your business, and they can help you identify a dependable Nominee Director to assign to your organization.
