Yes, a nominee director in Singapore is allowed but, again, only within the legal ambit and with all guidelines and requirements to be complied with.
Singapore requires every company to have at least one resident director, either by birth or naturalized as a citizen of Singapore or with a permanent residence within the country. In addition, the person may hold EntrePass, Employment Pass, or Dependant’s Pass. Specifically, in such cases where foreign investors need to establish a company in Singapore but do not have a local resident as their Director, it is possible to appoint a Nominee Director for fulfilling the requirements.
However, while a nominee director satisfies the requirement of resident directorship, the nominee does not normally get involved in the management of the company on a day-to-day basis other than to act as a figurehead for compliance purposes. It must also be remembered that notwithstanding limited involvement, a nominee director nevertheless remains subject to legal duties and responsibilities under the Singapore Companies Act. This encompasses ensuring that the business has operated within the legal ambit and has adhered to statutory obligations, including but not limited to, filing annual returns and maintaining adequate accounting books.
Given the fact that such nominee services can be abused, for example, by using a nominee director in order to disguise who really owns or controls an organization, in general such nominee directors are required to sign an indemnity agreement with those shareholders or owners of the underlying company, evidencing the limited nature of their role.
Companies hiring the nominee director service should make sure that providing the services is done by service providers who are in good reputation in the company and adheres to all legal requirements and regulations such as anti-money laundering regulations and know-your-customer (KYC) requirements. These essentially cushion the business against any form of legal threat from misfeasance of the directors.
Conclusion
Nominee directors are legal in Singapore, but the required compliance with regulations and responsible use of services will be helpful in every way to avoid any kind of legal or operational problems. One IBC, with its vast expertise in corporate services, provides reliable guidance on nominee directorships, helping businesses navigate regulatory requirements effectively and maintain full compliance, ensuring smooth and lawful operations.