If you're a first-time entrepreneur looking to register a company in Singapore, one question often comes up early:

"Why do I need a local director just to register my company?"

The answer lies in a key role within Singapore’s corporate framework: the nominee director.

They do not own shares and are not involved in the company’s day-to-day operations, yet their appointment is mandatory. So who exactly are nominee directors, and why are they so important? This article explains what you need to know.

1. Why is a Nominee Director Required in Singapore?

Under Singapore law, every locally incorporated company must have at least one director who is ordinarily resident in Singapore, as required under Section 145(1) of the Companies Act 1967.

An “ordinarily resident” individual can be:

•  A Singapore Citizen
• A Singapore Permanent Resident (PR)
• A foreigner holding an EntrePass or Employment Pass (EP)

This requirement ensures that every company has at least one person who understands Singapore’s legal and compliance environment and can be held accountable if issues arise.

As a result:

•  Wholly foreign-owned companies must appoint a local director
• New foreign entrepreneurs often rely on professional corporate service providers for nominee director arrangements
• Demand for nominee director services remains consistently high across industries
• Without a qualified local director, company incorporation is not possible.

2. What is a Nominee Director, and What Responsibilities Do They Have?

A nominee director is appointed solely to satisfy the statutory requirement for a locally resident director. They typically do not participate in the company’s management or operations.

However, the word “nominee” can be misleading. Under Singapore law, all directors have the same legal duties, whether or not they are involved in the business.

If a company is found to be in breach of the law, a nominee director may still be held liable. Common legal responsibilities include:

• Ensuring the company complies with the Companies Act and its Constitution
• Attending board meetings and participating in resolutions
• Reviewing and approving financial statements
• Avoiding conflicts of interest and exercising due care in all matters
• Being subject to civil or criminal penalties if the company engages in fraud, money laundering, or other offences

In short, a nominee director is not just a name on a document. The legal liability they carry is real and significant.

3. Who Typically Uses Nominee Director Services?

Nominee director services are most commonly used by:

• Foreign entrepreneurs who do not yet have a local partner in Singapore
• Wholly foreign-owned subsidiaries that want to keep control within the parent company
• Small and mid-sized enterprises (SMEs) that are testing the Singapore market before committing to relocation or long-term investment

4. Legal Requirements for Using a Nominee Director

Using a nominee director is legal when done transparently and in accordance with regulatory guidelines. As of 9 June 2025, the introduction of the Corporate Service Providers Act has raised the bar for compliance.

Key requirements include:

• Nominee directors must be appointed through an ACRA-registered Corporate Service Provider (CSP)
• CSPs must conduct fit and proper checks to ensure the nominee has a clean background and is suitable for the role
• Companies must maintain and update the Register of Nominee Directors (ROND) both internally and with ACRA
• Breaches of these requirements may constitute criminal offences.

If convicted, individuals may face a fine of up to S$10,000, and CSPs may face fines of up to S$100,000.

5. A Nominee Director Is Not a Formality

In the past, some viewed nominee directors as a mere formality. That is no longer the case.

With increasing global attention on anti-money laundering and counter-terrorism financing, nominee directors are now subject to greater regulatory scrutiny. Authorities view them as accountable officeholders, not passive placeholders.

If you are registering a company in Singapore:

• You must either meet the local director requirement yourself
• Or engage a responsible and licensed corporate service provider
• And clearly understand the respective obligations between you and your nominee director

Singapore’s reputation as a premier destination for business is built on strong corporate governance. Appointing the right nominee director is part of protecting both your company and your future.

Need help with nominee director arrangements or setting up a company in Singapore?

Contact us for practical guidance, professional service, and peace of mind.

Disclaimer

This article is written by New Ark Consulting and is for reference only. It may contain information that is proprietary to the Company and may not be published, distributed, reproduced, or redistributed, in whole or in part, without the prior consent of the Company. The article itself is not an offer or invitation to set up a family office, trade any investment product, establish a trust or establish a specific corporate structure or establish any legal relationship. Nor does it in itself constitute advice or a recommendation regarding wealth planning structures or corporate advice. It is for general information only and does not take into account specific investment objectives, investment experience, financial situation and the specific needs of any particular person. You should approach any potential investment or proposed wealth structure with caution. You should independently evaluate and consider the suitability of such products or structures, taking into account your specific objectives, investment experience, financial situation and/or specific needs (including your own wealth management needs and circumstances). Please obtain independent financial, legal and/or tax advice from professional advisors as required before proceeding with any investment, purchasing any investment product or building your wealth. Investments in financial instruments or other products carry significant risks, including the possibility of loss of the principal invested. Past performance does not guarantee or represent future results. Neither New Ark Consulting nor any of its officers shall be liable for any damages (whether direct, indirect or consequential) arising out of or in connection with the use of this article. 
  
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