Every Singapore-incorporated company must have at least one director who is ordinarily resident in Singapore — that is the bedrock rule under Section 145(1) of the Companies Act 1967. For foreign-owned companies and new entrants to the Singapore market who do not yet have a local director, the most common workaround is to appoint a nominee director.
The market for nominee director services in Singapore is mature, but it is also one of the most misunderstood areas in corporate governance. Some clients assume the nominee director is a passive figurehead. They are not. Some directors agree to serve “as a favour” without realising the legal consequences. Some service providers offer nominee director services without proper due diligence, and have been caught in money laundering and fraud cases.
This 2026 guide explains what a nominee director is, what the law requires, the risks on both sides, and how to engage a nominee director service properly under the post-2024 regulatory framework.
What Is a Nominee Director?
A nominee director is a Singapore resident director who is appointed to satisfy the Section 145(1) residency requirement but who does not have meaningful operational control over the company. The nominee is usually engaged by a corporate service provider (CSP) on behalf of the foreign-owned beneficial owner.
The Companies Act does not formally distinguish between a nominee director and any other director. In law, a nominee director has exactly the same fiduciary duties, statutory duties, and personal liabilities as any director. The “nominee” label is a commercial description, not a legal status.
Why Is a Nominee Director Needed?
Section 145(1) requires every Singapore company to have at least one director who is:
- A Singapore citizen;
- A Singapore permanent resident; or
- An EntrePass / Employment Pass holder with a local residential address.
Foreign-owned companies that do not yet have a local director (because the founders are still overseas, or because they have not yet been issued a Singapore work pass) cannot incorporate or continue to operate without filling this seat. A nominee director bridges the gap. For more on which work passes qualify, see our guide on EP vs ONE Pass vs PEP.
Statutory Duties of a Nominee Director
A nominee director has exactly the same duties as any director under the Companies Act and Singapore common law. The key duties:
1. Duty to act bona fide in the company’s interests (Section 157(1))
The director must act honestly and use reasonable diligence in the discharge of the duties of his office. This is a duty owed to the company itself, not to the beneficial owner or the CSP that arranged the appointment.
2. Duty of care, skill and diligence
The director must inform themselves about the company’s affairs and bring a reasonable level of skill to the role. Signing documents without reading them is no defence.
3. Duty to avoid conflicts of interest (Section 156)
Any direct or indirect interest in a transaction must be declared. A nominee director who is also a director of multiple unrelated companies must be alert to conflicts.
4. Duty not to misuse information or position
Confidentiality is essential. The nominee cannot use information obtained as director for personal gain or for the benefit of an unrelated party.
5. Statutory filing duties
The director is jointly responsible for filing the annual return, ECI, Form C-S/C, and other statutory submissions. See our Directors’ Duties guide for a fuller picture.
The CSP Act 2024: A Major Shift
The Corporate Service Providers Act 2024, which came into operation on 9 June 2025, significantly tightened the regulation of nominee director services. Under the CSP Act:
- Any person providing nominee director services as part of a business must be registered with ACRA as a Registered Qualified Individual (RQI);
- The CSP firm employing the nominee must hold a CSP registration;
- The CSP must perform robust customer due diligence (CDD) on the client, including beneficial ownership verification;
- The nominee director is personally responsible for ensuring the company is not used for money laundering, terrorism financing or other unlawful purposes;
- The CSP must maintain records that ACRA and the Suspicious Transaction Reporting Office can inspect.
This regime replaces the older “fit and proper” requirements with a structured registration system. For the full overview, see our deep-dive on the Corporate Service Providers Act 2024.
Risks for the Nominee Director
- Personal liability for company debts in specific circumstances — particularly under Section 339 IRDA (fraudulent or wrongful trading) and Section 340 (responsibility for offences by the company);
- Criminal liability under MAS, IRAS and MOM legislation if the company breaches money laundering, tax, employment or licensing laws;
- Director disqualification under Sections 154 and 155 of the Companies Act, which can prevent the nominee from acting as a director of any Singapore company for up to five years;
- Reputational damage — a nominee on the board of a company that becomes the subject of a fraud or regulatory action is publicly named in court records;
- Civil claims by liquidators — if the company is wound up, the liquidator may pursue the nominee personally for breach of duty.
A nominee director arrangement that did not involve active engagement and proper governance has been treated harshly by Singapore courts in recent years. The “I was only a nominee” defence does not work.
Risks for the Beneficial Owner
Engaging a nominee director also carries risks for the foreign beneficial owner:
- The nominee has full legal authority — they can technically execute contracts, open bank accounts, dismiss other directors, and call shareholder meetings. Without proper documentation, the beneficial owner has limited recourse;
- The nominee can be compelled to act — if a court orders the nominee to do something, the beneficial owner’s wishes are irrelevant;
- Bank accounts may be frozen — if MAS or the police investigate the nominee, the company’s accounts can be frozen pending resolution;
- The CSP can terminate — if the beneficial owner fails to pay fees or cooperate with CDD updates, the CSP can withdraw the nominee, leaving the company in breach of Section 145(1).
How to Structure the Nominee Director Relationship Properly
1. Nominee Director Agreement
A written agreement between the nominee, the CSP, the beneficial owner and the company is essential. It should cover:
- The scope of the nominee’s role (passive seat-holder vs operational);
- Fees and indemnities;
- Power of attorney arrangements;
- Information rights of the beneficial owner;
- Termination triggers and notice periods;
- What the nominee will and will not sign without instructions.
2. Deed of Indemnity
The beneficial owner provides a personal or corporate indemnity to the nominee for losses arising from the appointment. This is standard practice and should be backed by a cash security deposit held by the CSP.
3. Signed but Undated Resignation
The nominee provides a signed but undated resignation letter, held in escrow by the CSP. This allows the beneficial owner to replace the nominee swiftly once a local director becomes available (e.g., when an EP is approved).
4. Bank Authority
The bank mandate should restrict the nominee’s ability to authorise transactions. Most banks accept dual signatory arrangements where the nominee plus a beneficial-owner-appointed signatory must both sign.
5. Ongoing Compliance Engagement
The nominee must remain informed about the company’s affairs — quarterly management accounts, board minutes, material contracts. This is not optional under the CSP Act.
Typical Fees
Annual nominee director fees in Singapore range from S$1,800 to S$3,500 depending on the risk profile of the company, the level of operational involvement required, and the security deposit posted. For high-risk industries (crypto, gaming, money services), fees can be substantially higher and may include a refundable security deposit of S$5,000 — S$50,000.
Alternatives to a Nominee Director
If the nominee director route does not suit your situation, alternatives include:
- Appoint a co-founder or trusted partner who is Singapore-resident;
- Obtain an EntrePass for the founder — once issued, the founder satisfies the residency requirement;
- Wait until the EP is approved before incorporating;
- Use a Singapore subsidiary structure where the Singapore parent provides the local director;
- Engage a senior Singapore-based employee who can take the directorship as part of their role.
For foreign founders evaluating their entry options, see our guides on EntrePass and setting up a foreign subsidiary.
When to End the Nominee Director Arrangement
Most companies move away from a nominee director within 6-18 months of incorporation, once a Singapore-resident director is available. The transition involves:
- Appointing the new director via board resolution and Form 45 filing with ACRA;
- Activating the nominee’s signed resignation;
- Updating the bank mandate;
- Returning the security deposit (after a tail period for tax and statutory residual claims);
- Updating the Register of Directors and the constitution if needed.
Conclusion
A nominee director is a practical and legitimate solution for foreign-owned Singapore companies in their early days, but it is not a paper-shuffling exercise. The CSP Act 2024 has formalised what was already best practice: real due diligence, real engagement, real compliance. Both nominees and beneficial owners need to enter the relationship with eyes open.
Raffles Corporate Services is a registered CSP and provides nominee director services backed by proper agreements, indemnities, and ongoing engagement. We also help clients transition off nominee arrangements once their own local director is in place.
— The Editorial Team, Raffles Corporate Services