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How To Find A Nominee Director In Singapore



How To Find A Nominee Director In Singapore

A nominee director is someone appointed by a third party to represent your business in Singapore in the absence of an executive director based there.

The term “Nominee” indicates that the director’s appointment serves merely to satisfy Singapore’s legal and regulatory requirements and does not give them executive authority. As a result, the director’s position does not entail direct control over the management of the business.

The fundamental objective of a nominee director is to provide a company that was formed in a foreign country with a local presence.

If you wish to know more about the nominee director in Singapore, scroll down to the article..

Roles of a Nominee Director in Singapore

  • Every Singaporean company must have at least one regional director. If the applicant does not comply, it can have an impact on their legal and regulatory status.
  • A nominee director can help the company navigate this unfamiliar territory by offering insightful information about the local market, culture, and laws.
  • The company can develop a local presence and establish ties with regional stakeholders by having a nominee director who is knowledgeable about the area’s business environment.
  • The foreign owner has flexibility in administering the business even if they are not physically present in Singapore due to the nominee director’s ability to hold shares of the firm on their behalf.
  • The business can protect privacy and confidentiality by appointing a nominee director because the nominee director’s name will appear on public records rather than the owner’s.

Requirements of Nominee Directors in Singapore

A nominee director should be:

  • a person with a Singapore address who is a Singaporean citizen, Permanent Resident, or EP
  • 18 years old or older

According to the Singapore Companies Act, a nominee director shouldn’t be:

  • A bankrupt who has not been discharged. This indicates that even though they are technically bankrupt, they still have some bills to settle and are unable to obtain new credit from lenders
  • Disqualified for Insolvent Company Unfit Directors
  • Involved in three or more businesses that ACRA closed in the previous five years
  • disqualified for failure to submit returns
  • Those who are found guilty of any offense involving fraud or deceit that entails a sentence of more than three months in jail
  • On the basis of national security or interest, ineligible for companies winding up
  • Found guilty by the court of three or more ACRA filing offenses

How to get a nominee director in Singapore?

  • Choose a qualified nominee for director

The applicant has two options for the nominee director. They can either choose a reliable individual or hire a skilled service provider who specializes in acting in that capacity.

  • Nominee Director Service Agreement

Once a nominee director has been chosen, They must sign a Nominee Director Service Agreement outlining the terms and conditions of the appointment as well as the nominee director’s duties and liabilities.

  • Obtain the required paperwork

The company’s memorandum and articles of association, as well as other relevant corporate documents such as board resolutions and incorporation certificates, must be sent to the nominee director in order to enable the appointment.

  • Submit an application for the position of nominee director

By providing the required documentation to Singapore’s Accounting and Corporate Regulatory Authority (ACRA), the applicant can submit an application for the appointment of a nominee director.

  • Verify the director nominee’s identification

The nominee director will be required to present identification and address proof as part of the appointment process, which ACRA will verify.

  • Inform the nominee director

The owner must inform the nominee director and give them the information they require to fulfill their duty as a director of the firm after ACRA has authorized the appointment.

  • Comply with legal requirements

The nominee director will be liable for carrying out specific legal requirements, including submitting annual returns, calling for annual general meetings, and keeping accurate financial records.

Potential challenges of appointing a nominee director in Singapore

  • The nominee director is in charge of making sure the business complies with applicable local laws and rules. The nominee director may be subject to legal and regulatory consequences, such as fines, penalties, or even jail if the company breaks any laws or rules.
  • Any financial losses incurred by the firm as a result of the nominated director’s carelessness or breach of duty may be held personally accountable.
  • If the nominee director fails to disclose a conflict of interest, such as a personal or financial interest in a decision made by the firm, they may be exposed to legal and reputational challenges.
  • When there are differences over managerial choices or matters of corporate governance, the relationship between the nominee director and the foreign business may occasionally become difficult.