Understanding Nominee Directors in Singapore: Roles, Requirements, and Best Practices

Introduction:

In Singapore, every private limited company is required to appoint at least one resident director. For foreign entrepreneurs or companies looking to establish a presence in Singapore, this creates the need for a nominee director. But what exactly does a nominee director do, and how can their role be structured to protect the interests of all parties involved?

This blog explores the role, legal requirements, best practices, and how ProLead can support you in navigating nominee directorships in Singapore.

Who is a nominee director?

A nominee director is an individual appointed to fulfill the statutory requirement of having at least one locally resident director in Singapore. This person is officially registered with the Accounting and Corporate Regulatory Authority (ACRA) but typically does not participate in the day-to-day management of the company.

Nominee directors act on behalf of a third party—usually the foreign shareholder or company—and their appointment is often governed by a private agreement that outlines their limited role and responsibilities.

Statutory requirements?

Under Section 145 of the Companies Act 1967, every company incorporated in Singapore is mandated to have at least one director who is ordinarily resident in Singapore.

This legal obligation ensures that there is always a locally accountable individual who can be held responsible for the company’s statutory compliance. As a result of this requirement, many foreign-owned companies appoint a resident individual as a nominee director to satisfy this condition while retaining control of business operations with the foreign stakeholders.

When a company need nominee director?

A nominee director becomes necessary in situations where:

• All directors or shareholders are based overseas

• The foreign parent company or entrepreneur is not a resident of Singapore

• There is a temporary need for a local director while awaiting work pass approvals

This allows foreign business owners to comply with local laws while retaining operational control of their company.

Best Practice:

To protect both the nominator (the party appointing the nominee) and the nominee director, it is essential to:

• Clearly define the duties, powers, and limitations of the nominee director in a Nominee Director Agreement

• Include indemnity clauses to protect the nominee from personal liabilities arising from actions of the company, as long as they are not due to the nominee’s misconduct

This agreement helps avoid misunderstandings and provides legal safeguards for both parties.

How can Prolead help you?

At ProLead, we provide comprehensive nominee director services in compliance with Singapore's legal framework. Our services include:

• Provision of qualified local resident nominee directors

• Drafting of customized Nominee Director Agreements

• Ensuring statutory compliance with ACRA requirements

• Advisory on company incorporation and governance

• Advisory on corporate structuring

Our approach ensures that your business remains compliant without compromising control or security.

Additional Compliance help from Prolead:

ProLead also offers registered office address services, allowing businesses to use ProLead’s office address as their official registered address in Singapore. This enables entrepreneurs, especially those based overseas, to kickstart their operations remotely from their hometown, without needing to worry about fulfilling Singapore’s legal address requirements in the early stages of setup.

Conclusion:

A nominee director is crucial in meeting Singapore’s statutory requirements, especially for foreign-owned businesses. However, without proper agreements and understanding, both the nominee and the nominator can face serious risks. Following best practices and partnering with a trusted firm like ProLead can ensure a smooth, compliant, and secure business setup in Singapore.

Looking to appoint a nominee director or incorporate your company in Singapore?

Contact ProLead today—your trusted partner for corporate compliance ,business registration services and much more.