Every Singapore-incorporated company must have at least one director who is “ordinarily resident in Singapore” under Section 145 of the Companies Act 1967. For foreign entrepreneurs, offshore fund managers, and overseas parent companies setting up a Singapore subsidiary, appointing a nominee director is often the first practical step in complying with this rule. In 2026, the nominee director market is professionalised — the Corporate Service Providers Act 2024 imposes new duties on providers, and directors themselves face increasing scrutiny under ACRA, MAS, and the Insolvency, Restructuring and Dissolution Act (IRDA).
This article explains what a nominee director actually is, why one is used, how much they cost, the personal liabilities they carry, and how to structure the arrangement so it survives regulatory review. Written for founders and CFOs of foreign-owned Singapore companies, and for professionals contemplating serving as a nominee.
What Is a Nominee Director?
A nominee director is a Singapore-resident individual appointed to the board of a Singapore company to satisfy the statutory resident director requirement, without being expected to exercise substantive management control. In legal terms, however, they are a full director — with all the same fiduciary duties, statutory obligations, and personal liabilities as any other director on that board. There is no separate class of “nominee” director in the Companies Act.
Nominee directors are commonly provided by professional service firms — corporate secretaries, law firms, and licensed corporate service providers (CSPs). The client pays an annual fee, and the nominee agrees not to interfere with day-to-day operations, subject to certain reserved matters.
Why a Nominee Director Is Needed
Section 145(1) of the Companies Act requires every Singapore private company to have at least one director who is ordinarily resident in Singapore. “Ordinarily resident” means:
- A Singapore citizen, or
- A Singapore Permanent Resident, or
- An EntrePass holder, or
- Certain long-term Employment Pass holders whose usual place of residence is Singapore.
Foreign founders who have not yet moved to Singapore, holding companies whose owners are overseas, or subsidiaries of foreign parents therefore need a resident director from day one. Failure to maintain one is an offence under Section 145(10) and can trigger ACRA compliance action.
The Corporate Service Providers Act 2024
The Corporate Service Providers Act 2024 (in force from 9 June 2025) fundamentally changed the nominee director market. All persons in the business of providing nominee directors must now be a registered Corporate Service Provider (CSP) with ACRA. The Act also:
- Requires CSPs to conduct customer due diligence (CDD) on beneficial owners of client companies before providing directors.
- Restricts individuals from providing nominee director services other than through a registered CSP.
- Imposes ongoing monitoring, record-keeping, and suspicious transaction reporting obligations on CSPs.
- Introduces higher penalties for CSPs and directors who breach the framework.
For clients, this means legitimate nominee director services are now more expensive but more defensible. Do not accept a nominee director from an unregistered provider — the risk of ACRA compliance action and criminal exposure is real. Read our related article on the CSP Act 2024.
What Duties Does a Nominee Director Owe?
Under Singapore law, a nominee director owes exactly the same duties as any other director:
- Fiduciary duties — to act honestly, in good faith, and in the best interests of the company (not the appointer or beneficial owner).
- Duty of care and skill — codified at Section 157 of the Companies Act.
- Duty to avoid conflicts of interest — Section 156 disclosure obligations.
- Duty not to make secret profits — recovery through account of profits or constructive trust if breached.
- Duty to exercise independent judgment — cannot mechanically follow the beneficial owner’s instructions.
Singapore courts have consistently held that a nominee director’s status as a nominee does not reduce their duties. In Golden Harvest Films v Wu (High Court 2011) and subsequent cases, the courts have imposed personal liability on nominee directors who blindly followed instructions from beneficial owners.
Personal Liabilities the Nominee Director Assumes
- Signing tax returns as director — personal liability under Section 66 of the Income Tax Act for false declarations.
- Signing statutory declarations at ACRA — perjury exposure if declarations are false.
- Liability under Sections 238 and 239 of the IRDA (insolvent trading, fraudulent trading).
- Wrongful trading exposure if the company continues trading while insolvent.
- Employment Act obligations if named as an “employer” — CPF, salary, MOM issues.
- Criminal exposure for any offence committed by the company where directors’ consent or connivance is proven.
Read our related article on insolvent trading and personal director liability.
The Nominee Director Agreement
A well-structured nominee arrangement is documented in a Nominee Director Agreement between the beneficial owner (the appointer) and the nominee. Typical clauses include:
| Clause | What it does |
|---|---|
| Scope of appointment | Nominee acts only as a statutory-compliance director; no operational role. |
| Reserved matters | Certain actions (issuing shares, changing constitution, borrowing above a cap, opening bank accounts, filing tax returns) require nominee’s active consent — protecting the nominee from being blindsided. |
| Beneficial owner’s warranties | Owner warrants source of funds, no criminal background, no politically exposed person concerns. |
| Indemnity | Beneficial owner indemnifies the nominee for all costs, losses, and liabilities not caused by nominee gross negligence. |
| Security deposit | Refundable deposit (typically SGD 1,000 – 5,000) to cover potential unpaid taxes and fines. |
| Reporting | Beneficial owner must provide quarterly financial updates and immediate notice of adverse events. |
| Termination | Nominee may resign with 30 days’ notice; beneficial owner must appoint a replacement within that window. |
Costs
| Item | Typical range |
|---|---|
| Annual nominee director fee | SGD 2,000 – 4,000 for a passive appointment |
| Enhanced due diligence surcharge (higher-risk clients) | SGD 500 – 2,000 |
| Security deposit (refundable) | SGD 1,000 – 5,000 |
| Setup fee | SGD 300 – 800 one-off |
| Change of nominee | SGD 500 – 1,500 |
Common Mistakes and How to Avoid Them
1. Treating the Nominee as a Rubber Stamp
Beneficial owners who assume the nominee will sign anything they are asked to sign are often disappointed. A professional nominee will refuse to sign tax returns, statutory declarations, or bank documents without underlying documentation. Build this into your planning.
2. Not Providing the Nominee With Financial Information
The nominee cannot exercise independent judgement without financial visibility. Provide the nominee with monthly management accounts, bank statements, and a copy of the annual audit (if applicable). Read our related article on directors’ duties in the twilight zone.
3. Using the Nominee for AML Concealment
Under the CSP Act 2024, the beneficial owner must be identified and recorded regardless of who appears on the ACRA register as director. Attempting to use a nominee to hide beneficial ownership is an offence. All beneficial owners of 25% or more must be entered in the Register of Registrable Controllers.
4. Missing Nominee Resignation Notices
When the nominee resigns, ACRA must be notified within 14 days. Companies that lose their sole resident director and do not replace them within a reasonable period face compliance action.
Alternatives to a Nominee Director
Foreign founders serious about Singapore may prefer to remove the need for a nominee altogether by:
- Applying for an EntrePass — puts you on a work pass and enables you to serve as your own resident director. See our EntrePass guide.
- Employing a Singapore citizen or PR as CEO/COO — dual purpose: substantive role and satisfies Section 145.
- Applying for ONE Pass or EP — for principals earning at least SGD 30,000 per month or with outstanding achievements.
Further Reading
- Corporate Service Providers Act 2024 compliance
- How to Add or Remove a Director in Singapore (2026)
- Shadow Directors and De Facto Directors in Singapore (2026)
- Disqualification of Directors in Singapore (2026)
- Directors’ Duties When a Company Is Insolvent
Official references:
— The Editorial Team, Raffles Corporate Services