Singapore is an attractive country for investments. As a foreign investor, you are required to have at least one local director who is a permanent resident or citizen of Singapore.
Why Do I Need To Appoint a Nominee Director?
Fee Guideline for Nominee Director Services
|Nominee Director Services||$1,500 to $2,400 Per Annum (+ $2000 Security Deposit)|
Who is a Nominee Director?
As a shareholder, a stakeholder or even a creditor to an organization, you may nominate someone to represent your interests on a company’s board. The nominee director can also play as the head of your company in Singapore. This happens when you are unreachable and not a resident of Singapore. The person you will have appointed is called a nominee director and must be a resident of Singapore.
The nominee director you appoint needs to possess qualities such as competency, trust and a good reputation. Your stake at the company and the company are influenced by making such a selection. A good choice yields positive results and a negative yields negative results for the company and your stake.
As a non-resident stakeholder in Singapore, you are required to appoint a nominee director. The appointment is conforming to the provisions of the Singapore Companies Act on private limited companies in Singapore. These companies are required to appoint a minimum of one director(s) who is a Singapore resident.
Qualifications of a Resident of Singapore
You will be recognized as a Singapore resident if:
- You own a local residential address.
- You are a citizen or permanent resident of Singapore.
- You are a holder of Employment Pass, Dependent’s Pass or an Entre Pass.
- You have proven that you intend to reside in Singapore for a long while.
Qualifications of a Nominee Director
The Singapore Companies Act recognizes a nominee director under certain conditions. These conditions are:
- The individual must be a Singapore Citizen.
- The individual must be a Permanent Resident of Singapore.
- You must hold an Employment Pass or an Entre Pass and indication of a Singapore residential address.
Advantages of Having a Competent Nominee Director
- A competent nominee director is well informed on compliance requirements of the Singapore Companies act.
- A competent nominee director is proactive on filing returns on a timely manner.
- The director will obtain the required signatures for crucial documents. Furthermore, this director will obtain these signatures on time.
- The nominee director proactively notifies you of the on goings of the company.
What If I Don’t Know Someone to Act as My Nominee Director?
It is not a limitation if you cannot find someone to act as your nominee director in Singapore. There are firms that provide services of a nominee director who will act in your best interests.
As a firm in this field, Timcole offers competent nominee director services to help you reap fully the advantages that come with an adept nominee director.
Timcole is one of the leading company incorporation and accounting firm based in Singapore. Our wide range of professional services serve as a one-stop solution for your business, offering you the most affordable price for services conducted with the highest level of excellency.
Frequently Asked Questions (FAQs)
Is my nominee director going to have signatory or management authority?
The Nominee Director is excluded from your business operations. The Director lacks signatory authority in bank transactions, business, legal decisions, contracting or business decisions you make.
Who assumes legal liability for noncompliance with Statutory requirements?
Your company must adhere to The Singapore Companies Act. If you fail to comply, the company directors assume liability. They risk getting fined or facing prosecution.
Can I enlist nominee director services in Singapore?
What is the role of a nominee director?
The Singapore Companies Act mandates that your company must have a local director. The nominee director plays a major role of gratifying these statutory requirements. The nominee director in Singapore lacks jurisdiction over your business transactions, business operations or management.
Is there a difference between the service fee and the security deposit? What is the difference between the service fee and the security deposit?
These two fees have a difference. The security deposit is a refundable payment you make at the start of our business relationship. Once this relationship with our nominee director has been terminated, we refund the security deposit.
The service fee is the amount we charge for our nominee director services.
Security deposits give assurance to the nominee director as he fulfills arduous responsibility. Moreover, it builds trust and longer and more productive business relationships.
You are not charged any further security deposit as the relationship matures. However, the security deposit is higher if your company is registered for Goods and Service Tax (GST). GST registered Companies expose the Nominee Directors to a higher risk.
Statutes in Singapore expect companies registered for GST payment to make these payments a month after the accounting period indicated in the returns. The Singapore authorities impose penalties on companies that make late payments or fail to pay the GST. Failure to make these payments risks even prosecution.
How long do nominee director appointments last?
There is no specific period in Singapore in which a specific nominee director is supposed to serve you. The Singapore statutes grant you the authority to appoint and dismiss a nominee director at your will.
Once you terminate the nominee director services of a company, the company notifies the authorities and reimburse the security deposit.
Can the nominee director get me the power for attorney?
If you wish to delegate legal responsibility of your company to another person to act on its behalf, you will need to get a legal document called the power of attorney. The power of attorney contains the terms under which the other party gets responsibility of your company. This document gives the attorney the authority to act without having to consult the directors. In some cases, the company will preserve some responsibilities for the directors.
You will need to present a reason for issuing this document if you enlist nominee director services.
Crosschecking is required before you issue the power of attorney. The nominee director conducts this crosschecking. You will need to avail the following about the attorney you wish to appoint:
- A copy of the attorney’s passport
- Proof of a residential address in Singapore
- A copy of the national identity card
- Attorney’s email and telephone contact
- A reference letter from the attorney’s personal bank. Alternatively, you may present the attorney’s personal bank statement dating back two months.
- A reference letter from the attorney’s current employer
- A written indication of your purpose for issuing the power of attorney
- A written explanation of why the power of attorney is needed from the nominee director and not an executive director
The nominee director can reject an attorney if they fail to meet the qualifications. The nominee director can only issue a special power of attorney if the law has requested it.
Can the nominee be involved in license application?
No. License application is part of a business operation and nominee directors are exempted from a company’s operations. An executive director is required to help the company make these applications and sign on them. Executive directors are appointed under the provisions of Accounting Corporate & Regulatory Authority (ACRA).
Can a nominee director take part in opening bank accounts?
The nominee director can only provide assistance when opening a corporate bank account. However, a nominee director cannot sign on any of the company’s bank documents.
Is the Nominee Director involved in registration of any local facilities?
No. Nominee directors are not allowed to sign on any declarations. Mobile phone packages and gateway payments for example are registered under your name as the owner of the company.