Who can be a nominee director of a company?
Singapore Companies Act requires at least one local resident director for a Private Limited company.
If your company is 100% of foreign owners, you must appoint a nominee director to fulfill this mandatory requirement of the Companies Act
The nominee director can be
- A Singapore citizen,
- Permanent resident,
- EntrePass holder
- Employment Pass holder or
- Dependent Pass holder.
and has a Singapore residential address.
Why a company has at least one resident director?
Your Company’s directors and company secretary have legal responsibilities and accountable
- to conduct Annual General Meetings and to file Annual Return to Accounting Compliance Regulatory Authority of Singapore, (ACRA) and
- to submit its corporate taxation returns to Inland Revenue Authority of Singapore (IRAS).
“Government insists that the nominee director who is a resident director be held accountable to all statutory requirements. Failure to comply with the statutory compliance is an offense that results in fines, penalty and prosecution.”
What conditions do our local nominee director service involved?
You can engage our Nominee Director Service under the following conditions
- You must appoint at least one foreign individual shareholder to be the active executive director’s responsibility to run the business.
- The nominee director is to meet the statutory compliance of a resident director. It is a non- executive position with no financial, operational or management responsibilities of the company.
- You must satisfy our “Client Risk Assessment Review” requirements.
- You must execute our Nominee Director’s Indemnity Agreement.
- You must use our company secretarial services,and corporate annual taxation filing service.
- You must use our payroll service when you provide employments to hire local employees.
- You must provide monthly Company’s bank statement to our nominee director’s email address for review by our accountant.
- Your annual accounts records must be subjected to auditing
- You can maintain Singapore Bank Account in the Company.
- The opening of one foreign bank account overseas is subject to Board Resolutions approved by all directors.
How to compensate the nominee director from fines and penalties?
In case of foreign shareholders relocating their business, and disappear from Singapore without any overseas contact details.
- The company’s business stops immediately, as the nominee director is a non-executive position.
- The nominee director is now held accountable to pay for company fines, penalty and prosecution charges as levied by the Authority for non-compliance.
- A refundable security deposit of $ 2,000 is required for the nominee directorship agreement.
- You can ask our nominee director to resign at any time by appointing a new person who can satisfy the local director requirements.
What are the different risk levels as nominee director?
You will be charge different nominee director fee and security deposit to compensate with different risk levels of your business. If you company falls under very high risk we will not be able to act as your nominee director.
- Start-up a small company with turnover less than S$1 million.
Our risk level is manageable and our nominee director fee is $1,800 a year or $150 per month for 12 months. This is a yearly contract.
- Company intends to register for GST (Goods and Service Tax Status) voluntarily or Income of the company is expected to exceed $ 1 million a year.
GST-registered businesses are required to pay the GST one month after the end of the accounting quarterly GST F5 return. If the tax is not paid or is paid late, penalties will be charged. Directors including nominee director are responsible for this liability, if the company default its obligation to pay IRAS GST amounts. Here the risk level is higher than normal to meet statutory
- Company intends to hire local employees and / or has external debts.
If the company failed to pay on time or not paying the employees’ Central Provident Fund accounts, the company will face fines, penalties and prosecution from the CPF Board. Directors including nominee director are responsible to settle all due amounts in full to CPF Employees accounts and any non-payment of salaries to its employees.
If the company external debts other than from related companies are significant, then the risk level as director is high.
Our nominee fee is subject to negotiation when the risk level is higher than normal.