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Incorporating a company in Singapore is an attractive choice for foreigners for various reasons such as its business-friendly environment and eye-catching taxation policies.
However, there are certain requirements that they must meet before they can set up their Singapore company. One of the key conditions stipulated is the need for a minimum of 1 local resident company director.
In this case, applicants may seek a nominee director service to fulfil this condition if they do not have any local Singaporean or PR candidate to take on this role.
In this blog, we explain more about a nominee director and how you can get one.
What is a Nominee Director?
A nominee director refers to an individual who is appointed to act as a director of a company on behalf of someone else.
In this arrangement, the nominee director’s role is primarily administrative and legal in nature, without having any significant decision-making authority or involvement in the day-to-day operations of the company.
The nominee director must be either a Singapore Citizen or a Singapore Permanent Resident (PR).
Related Read: 2023 Foreigner’s Guide to Registering a Singapore Company
What is the Purpose of a Nominee Director?
If you incorporate a company in Singapore, you must, amongst other conditions, have at least 1 locally resident director. This is where a nominee director service comes in to allow these companies to meet the incorporation requirements.
Since a nominee director also has a variety of tasks and responsibilities, it is important that they are reliable and trustworthy.
Some of these responsibilities include:
- Maintaining the company’s statutory books accurately
- Performing regulatory filing on time
- Maintaining accounting records and annual accounts precisely
What is the Difference Between a Nominee Director and a Normal Director?
As mentioned, a nominee director is someone who has no executive authority to make decisions in the company, while a regular director has the ability to do so.
This is despite both of them having similar administrative responsibilities.
Why is it Mandatory for Companies in Singapore to Have a Local Director?
In the case of a company breaking any law, the Singapore government can hold the locally resident director responsible. This can help to prevent foreign business owners from fleeing Singapore and running from any legal issues.
Since the Singapore Companies Act imposes the same statutory obligations and responsibilities on a nominee director as normal directors, the nominee director must ensure that they comply with all local laws.
What Are Some Advantages of Engaging a Nominee Director?
There are several benefits associated with engaging a nominee director for your Singapore company incorporation. We walk you through some of the main advantages:
Compliance with Local Requirements
One of the primary benefits of appointing a Singapore nominee director is to comply with local regulations. Singapore law mandates that every company must have at least one local resident director.
You can meet this requirement by utilising a nominee director service even if you don’t have a resident director readily available.
Navigating Legal and Regulatory Landscape
Singapore has a robust legal framework and stringent regulatory requirements. A nominee director who is well-versed in local laws, policies, and compliance procedures can guide your business through the intricacies of Singapore’s legal landscape.
This ensures that your company operates within the boundaries set by regulatory authorities, reducing the risk of non-compliance.
Continuity and Flexibility
A nominee director can provide continuity to your business operations. If there are changes in the management or ownership structure of your company, the nominee director can remain in their position, ensuring stability while you make necessary transitions.
Additionally, a nominee director can be easily replaced or removed, offering flexibility as your business needs evolve.
Local Expertise and Networking
A Singapore nominee director often possesses extensive knowledge of the local business environment and has established networks within the country. They can leverage their experience and connections to provide valuable insights, guidance, and potential business opportunities for your company.
Enhanced Credibility
Having a nominee director who is familiar with the Singapore business landscape can enhance your company’s credibility.
It demonstrates your commitment to comply with local regulations and signals to stakeholders, including clients, partners, and investors, that you have local expertise and a solid market understanding.
SCI Can Help You Get the Nominee Director You Need
At SCI, we have a professional team who has helped business owners obtain the nominee directors they need. Be assured that we will perform the necessary checks to ensure that your nominee director is a reliable and trustworthy individual who can help your business grow.
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SCI is here to assist you with appointing a reliable nominee director in Singapore.
