One of the first surprises for a foreign entrepreneur setting up a Singapore company is this: you cannot run the company entirely from overseas on paper. The Companies Act 1967 requires every locally incorporated company to have at least one director who is ordinarily resident in Singapore. This is the “resident director” or “local director” requirement under Section 145, and it is a live condition — not a one-off box you tick at incorporation.
This guide explains who counts as an ordinarily resident director, what happens if the requirement is not met, and the realistic options available to foreign founders who do not yet have anyone local on the board.
What Section 145 actually requires
Section 145 of the Companies Act 1967 provides that every company must have at least one director who is ordinarily resident in Singapore. A few points follow from this:
- The company must have at all times at least one such director. This is a continuing obligation, not just a condition for incorporation.
- A director must be a natural person (not a company) and must be at least 18 years old.
- There is no upper limit on the number of directors, and the other directors can be foreigners resident anywhere — but at least one seat must be filled by an ordinarily resident individual.
The requirement exists so that there is always an accountable individual physically connected to Singapore whom ACRA, IRAS and the courts can hold responsible for the company’s compliance.
Who counts as “ordinarily resident in Singapore”?
A person is generally treated as ordinarily resident in Singapore if their usual place of residence is in Singapore. In practice, ACRA accepts the following categories of person as able to satisfy the resident director requirement:
- Singapore Citizens;
- Singapore Permanent Residents; and
- holders of an EntrePass.
A holder of an Employment Pass (EP) may act as a director of the company that sponsors their EP, but only with a Letter of Consent from the Ministry of Manpower, and an EP is generally tied to a specific employer — so it is not a reliable way to satisfy the ongoing Section 145 requirement for a start-up that has no other local presence. As a rule of thumb, plan around a citizen, PR, or EntrePass holder.
What happens if the company has no resident director?
Failing to maintain a resident director is a breach of the Companies Act. The consequences can include:
- Prosecution and fines for the company and its officers for the breach;
- ACRA treating the company as non-compliant, which can flow into difficulties renewing bank facilities and dealing with counterparties who check standing;
- In persistent cases, the company being flagged for enforcement or eventual striking off.
The requirement most often becomes urgent when the sole resident director resigns, passes away, loses PR status, or leaves Singapore permanently. If that happens and no replacement is appointed, the company falls out of compliance immediately — which is why succession planning for the local director seat matters.
Options for foreign founders
If you are incorporating from overseas and do not yet have a local co-founder, there are three realistic routes.
1. Relocate and obtain an EntrePass or become a PR
If you intend to move to Singapore to run the business, an EntrePass allows an eligible foreign entrepreneur to both live here and serve as the resident director. Over time, PR status provides the most durable solution. This is the cleanest option where the founder genuinely intends to be based here.
2. Appoint a local co-founder or trusted individual
If you have a Singapore citizen or PR business partner, family member, or trusted associate willing to take on the office, they can serve as the resident director. Remember that whoever takes the seat assumes the full statutory duties of a director under Section 157 — this is a real legal responsibility, not a formality.
3. Engage a nominee director service
Where no suitable individual is available, corporate service providers offer a nominee director to satisfy Section 145 while the beneficial owners retain executive control. A nominee director is typically non-executive and does not get involved in running the business, but — and this is critical — the nominee still owes and bears the statutory duties of a director. Reputable providers therefore require a security deposit, indemnities, and full visibility of the company’s activities, and will decline to act for businesses they cannot verify.
Resident director vs sole director: an important overlap
Many young companies are set up with a single director who is also the sole shareholder. If that one director is the only person satisfying Section 145, the company is entirely dependent on that individual remaining ordinarily resident and in office. A sole director also cannot act as the company secretary — those roles must be held by different people. Our guide on the rules and risks of a sole director company explains why building in a second director or a clear succession plan is prudent.
Practical checklist
- Confirm before incorporation who will hold the resident director seat, and that they are a citizen, PR, or EntrePass holder.
- Make sure that person understands they are taking on real legal duties.
- Keep the director’s residential status under review — a PR who lets their status lapse can quietly break the company’s compliance.
- If you use a nominee, keep the arrangement properly documented and keep the nominee informed of company activities.
- Have a plan for what happens if the sole resident director resigns or becomes unavailable.
Frequently asked questions
Can a foreigner be the majority shareholder but not a director?
Yes. There is no restriction on foreign shareholding — a foreigner can own 100% of a Singapore company. The Section 145 requirement is about the directorship, not the shareholding. You just need at least one ordinarily resident director on the board.
Does an Employment Pass holder count as a resident director?
Only in a limited way. An EP holder can be a director of their sponsoring employer with a Letter of Consent from MOM, but because the EP is tied to that employer, it is not a robust standalone solution for satisfying Section 145. Citizens, PRs and EntrePass holders are the reliable categories.
Is a nominee director legal in Singapore?
Yes, nominee directors are entirely legal and widely used. What is not permitted is using a nominee to disguise beneficial ownership from ACRA or to facilitate wrongdoing. The company must still maintain accurate registers of controllers and disclose its real owners.
How quickly can a resident director be appointed?
An appointment can usually be effected and lodged with ACRA within a day or two once due diligence is complete. The bottleneck is normally the verification and documentation, not the filing.
The bottom line
Section 145 is a foundational compliance requirement for every Singapore company: at least one director who is ordinarily resident here, at all times. For local founders it is rarely an issue; for foreign founders it is one of the first things to solve, and the right answer depends on whether you plan to relocate, have a trusted local partner, or need a professional nominee to bridge the gap.
If you are incorporating from overseas and need help meeting the resident director requirement — whether through a nominee arrangement or a broader corporate secretarial package — our team can structure it properly and keep you compliant.
— The Editorial Team, Raffles Corporate Services