If you don’t have a resident director for your Singapore company, you’ll need a Nominee. We explain how it works and what his role is.
Do I need a Nominee Director?
Your Singapore company can have as many directors as you want, but at least one needs to be local. You can be one yourself if you are Singaporean, or a Permanent Resident, or an Employment Pass holder from your own company. You can also ask a friend to play the role. Otherwise, use the Nominee Director service. For example, there can be two directors: you and the nominee.
What is the Nominee Director’s role?
Most importantly, the Nominee’s role is to comply with the law that requires a resident on board. He has no authority to run the company. His powers are limited by his contract — a Deed of Indemnity.
However, a Nominee is still a director and as such, he or she has to act in the interests of the company and in compliance with the law.
What is the Deed of Indemnity?
It’s a contract between the Nominee and the company that requires his service. On the one hand, it protects you by ensuring he can’t make any decisions that affect the company or sign any documents without shareholders’ approval. On the other hand, it protects the Nominee by specifying he can’t be held accountable for the decisions of the actual board.
What is the procedure for hiring a Nominee?
After you’ve hired a Nominee, it needs to be recorded in the Register of Nominee Directors of your company. It contains details on the nominator (that's you) and it’s the Nominee’s responsibility to make sure that this data is kept correctly. Normally the agency providing the service deals with it.
How much does a Nominee Director service cost?
The price for a year of service provided by the local agencies ranges between S$1,800 - S$5,000. Many agencies also require you to place a refundable security deposit of S$2,000 on top of that.
What is a Security Deposit?
It works as an insurance for the nominee. The reason is he or she is taking a risk, too. The deposit is a guarantee that his or her role will remain technical. Once the Nominee’s contract expires, you get the deposit back.
Can I replace the Nominee Director?
Sure. For that, you need to get an Employment Pass from your own company. That takes about 6 months to receive, so you’ll still need a Nominee Director while you’re waiting. Getting the Employment Pass will cost you about S$800 - S$1,200, plus you need to have a monthly salary of at least S$6,000.
This article was written by experts at Osome – online Incorporation, Secretary, and Accounting in Singapore. We help entrepreneurs to start and run business, including Nominee Director service. We respond fast 24/7 in a secure chat. Learn more and get a free consultation on osome.com