For the purposes of the ACRA, a nominee director means any person who has agreed to act as a company’s director on behalf of some other persons or organizations. Normally, this applies in cases where any foreigner or foreign entity requires a local presence for meeting the regulatory requirements of Singapore regarding the incorporation of any company. At the moment of writing, it is a legal requirement in Singapore that at least one director must be an ordinary resident in Singapore, such as citizens, permanent residents, or holders of certain visas, like an Employment Pass.
The role of a nominee director is normally administrative and representative. He acts on behalf of the appointing party, the nominator, who may either not want or is unable to directly manage the company. Notwithstanding such a representative capacity, the nominee director still remains bound by law in respect of the duties which he owes for ensuring that the company complies with the applicable laws and regulations of Singapore, such as filing annual returns and observing proper corporate governance.
ACRA necessitates that all directors, whether nominee or not, conduct their fiduciary duties in acting in the best interest of the company and not just following instructions from the nominator. The nominee director must act in good faith, without conflict of interest, and with a view that the company is conducted according to the requirements of the Companies Act of Singapore.
In most cases, a nominee director by One IBC agreement is signed to outline the limits of his responsibilities; this agreement does not, however, relieve the nominee from his legal responsibilities. A nominee remains liable for company compliance and governance under the laws of ACRA.