Globally, Singapore is one of the most favourable countries to set up a profitable business. Establishing your company in this location comes with many key benefits, such as a stable political system, tax incentives, futuristic banking technology, open-minded foreign policy, etc. Furthermore, the company registration process in Singapore is perfectly automated and business owners can take less than two days to complete the entire process.
However, Singapore Companies Act stipulates that if your company is 100% foreign owners, you will need the help of a nominee director to help you run the business. The nominee director must have a Singapore residential address and can be:
- A Singapore citizen, or
- A permanent resident.
The nominee director may be your relative, a local individual you have established a relationship of mutual trust with, or you can appoint a totally new face. As soon as you’ve hired one, you can become a director yourself or appoint another executive from abroad.
Why Hire A Nominee Director?
Your Company’s directors, along with the corporate secretary are legally responsible for:
- Overseeing Annual General Meetings (AGMs);
- Filing Annual Returns to Accounting Compliance Regulatory Authority (ACRA);
- Submitting corporate taxation returns to Inland Revenue Authority of Singapore (IRAS).
The Singapore Government maintains that the nominee director is the one to be held accountable to all statutory requirements. Failure to comply with the statutory compliance is an offence that results in fines, penalty and prosecution.
ACRA states, “A director must make decisions objectively, act in the best interest of the company, avoid conflicts of interest, and be honest and diligent in carrying out his duties.”
Qualifications of a Nominee Director
- A Singapore citizen;
- Minimum age of 18 years and no maximum age-limit;
- Physically and mentally fit to perform the director’s duties.
Disqualifications of a Nominee Director
- An undischarged bankrupt
- Convicted criminal offences for fraud or corruption
- A disqualification order by the court
- Convicted for 3+ years for offenses under the Companies Act within a 5-year period
- Has 3+ High Court noncompliance orders under the Companies Act within a 5-year period
- The company disqualifies him for national security or interest reasons
Step-by-Step Process of Incorporating a Singapore Company with a Nominee director
Step 1: Meet the Minimum Requirements of Setting up a Company
Directors: A minimum of one resident director with an EntrePass, Employment Pass, or Dependent Pass is compulsory.
Registered Address: The address must be a physical local address. (P.O. Box is prohibited.)
Paid-up Capital: Minimum of SGD$1 paid-up capital for registration.
Shareholders: 100% local or foreign shareholding is allowed. The shareholder can be an individual or a corporate entity. A director and shareholder can be the same or a different person.
Company Secretary: The Companies Act necessitates one Company secretary who must be a natural person and a Singapore resident.
Audit Requirements: Unless exempted under the Companies Act, you must appoint an auditor within 3 months from the date of incorporation.
Step 2: Know the Roles of a Nominee Director before Signing an Agreement
You must acknowledge that Nominee Director is a non-executive director of your firm and part of the board of directors. They can shadow various roles that require the attention of a bank, investor, lender, etc. While a nominee director has no shareholding requirement, you can allow them to obtain shares if your company policies impose a share qualification.
You should also note that the nominee director does not take care of issues related to the management or operations of your company. Typically, you must appoint other company directors to help you carry out those roles.
Others duties of a Singapore Company Director
- Adopt ethical and socially responsible practices
- Engage with society
- Ensure corporate governance
- Practice corporate social responsibility
Step 3: Fill the Online Incorporation Form
ACRA has an online portal where you can fill out and submit company registration applications and ongoing compliance forms. Fill up the incorporation form here: https://www.bizfile.gov.sg/
You will need the following documents for the incorporation:
- For Singapore resident directors and shareholders
- Copy of Singapore Identity Card; or
- Copy of passport only if the individual is not a Singapore citizen;
- For non-resident directors and shareholders
- Copy of passport; and
- Copy of proof of residential address, e.g. a recent utility bill, residential phone bill, tax bill, or cable TV bill
- For each corporate shareholder:
- Foreign Corporate Company Certificate; and
- Special Director Resolution to become a subsidiary shareholder of the newly incorporated company.
Step 4: Open a Bank Account for your Newly Incorporated Company
After incorporation, your company must open a corporate bank account in Singapore.
You will need the following documents:
- Duly filled Account Opening Forms for a Company
- Board of Directors Resolution to open the bank account, including appointed signatories
- Certified True Copy of Company’s Business Profile from Company Registrar
- Certified True Copy of Company’s Memorandum and Articles of Association (M&AA)
- Certified True Copies of Passport or Singapore Identity Card and Proof of Residential Address for Directors, Signatories, and Beneficiaries.
Step 5: Start Operating Your Business
After fulfilling all the above mentioned steps, you can start your business immediately. However, if you are still abroad and you cannot relocate to Singapore immediately, we can appoint for you a nominee director to help in the initial stages, especially if you are yet to recruit staff in Singapore.
How Can We Help?
If you want to hire a nominee director, contact a competent incorporation company in Singapore like Tianlong Services since we have the potential to bring more profit to your business. At the onset, we will appoint a suitable member of our team to become the nominee local director for your company if you don’t have one. This service is offered for statutory compliance only. For the provision of our nominee local director service, we will also collect a refundable security deposit.
A nominee director is banned from interfering with your decisions and has little or no say during internal meetings. The real directors run the company while the nominee is only there to comply with the law. If you are dissatisfied, which is a rare occurrence, feel free to ask our nominee director to resign at any time.