Introduction

Every Singapore private limited company must have at least one director who is ordinarily resident in Singapore. For foreign entrepreneurs and investors who do not live in Singapore, this requirement creates an immediate practical challenge. The solution most commonly used is the appointment of a nominee director — a Singapore resident who sits on the board of directors in name, allowing the company to meet the residency requirement while the beneficial owner retains operational control.

However, nominee directorships in Singapore are not without legal complexity. A significant regulatory change took effect on 9 June 2025: nominee director appointments “by way of business” must now be arranged exclusively through an ACRA-registered Corporate Service Provider (CSP). Understanding what this means, and how to structure a nominee directorship safely, is essential for any foreign business owner operating in Singapore.

The Legal Requirement: Why a Nominee Director Is Needed

Section 145(1) of the Companies Act 1967 requires that every company incorporated in Singapore must have at least one director who is ordinarily resident in Singapore. “Ordinarily resident” means the individual is a Singapore Citizen, Singapore Permanent Resident, or the holder of a valid Employment Pass, EntrePass, or Dependant’s Pass.

If all directors of a company are based overseas, the company will not be compliant with Section 145. ACRA will not incorporate the company, and an existing company that loses its locally resident director must remedy the situation within the required period or face enforcement action.

What Is a Nominee Director?

A nominee director is a Singapore resident who agrees to be named as a director of your company, fulfilling the residency requirement under the Companies Act, while the actual management and operational control of the company remains with the beneficial owner or the “real” directors based overseas.

The nominee director’s role is primarily formal: they are listed in ACRA’s register of directors and satisfy the residency requirement. In practice, well-structured nominee directorship arrangements include a suite of legal documents that define and limit the nominee’s actual involvement, while protecting both parties.

The 2025 Regulatory Change: CSP-Only Nominee Appointments

Effective 9 June 2025, the Companies Act was amended to require that nominee director appointments “by way of business” — that is, arrangements where someone is paid to act as a nominee director — must be arranged through an ACRA-registered Corporate Service Provider (CSP). It is no longer permissible to:

  • Hire a friend, personal contact, or freelancer as a paid nominee director directly
  • Source a nominee director through informal channels or unregistered intermediaries
  • Use an overseas company to provide nominee director services without an ACRA registration

Non-compliance with this requirement can result in fines of up to S$50,000 and imprisonment of up to 2 years for the persons involved. Both the nominee provider and the company engaging the nominee can face liability.

CSPs providing nominee director services must verify the identity of clients, conduct due diligence, and file the necessary reports with ACRA. This change aligns Singapore’s nominee directorship regime with international anti-money-laundering (AML) and know-your-customer (KYC) standards.

Legal Duties of a Nominee Director

One of the most important — and most misunderstood — aspects of nominee directorships is that a nominee director is not relieved of their legal duties simply because they do not participate in day-to-day management.

Under the Companies Act, every director — including nominees — owes the following duties to the company:

  • Fiduciary duty: To act in the best interests of the company and its shareholders
  • Duty of care and diligence: To apply the care, skill, and diligence that a reasonable person in their position would exercise
  • Duty to avoid conflicts of interest: Not to place personal interests ahead of the company’s
  • Duty not to act for improper purposes: Not to exercise powers for purposes other than those for which they were granted
  • Statutory obligations: Compliance with ACRA filing deadlines, signing of Annual Returns, and other statutory requirements

A private agreement between the nominee and the beneficial owner (such as an indemnity deed) cannot override these statutory duties. If the company engages in unlawful activity or fails to file its statutory returns, the nominee director can be held personally liable.

Essential Legal Documents for a Nominee Directorship

1. Service Agreement

A formal service agreement between the CSP (or individual nominee) and the company sets out the scope of the nominee’s role, the fee payable, and the obligations of both parties. It defines what the nominee director will and will not do, and establishes reporting obligations.

2. Deed of Indemnity

The deed of indemnity requires the beneficial owner to indemnify the nominee director for any losses, liabilities, costs, or damages incurred as a result of the nominee’s directorship — provided those losses are not caused by the nominee’s own fraud, negligence, or wilful default. This deed provides important financial protection for the nominee but does not protect against third-party claims.

3. Undated Resignation Letter

The beneficial owner holds a pre-signed, undated resignation letter from the nominee. This allows the beneficial owner to trigger the nominee’s resignation immediately if needed — for example, if the nominee breaches the terms of the arrangement or if the beneficial owner wishes to replace the nominee.

4. Directors’ and Officers’ (D&O) Insurance

Most professional nominees engaged through reputable CSPs carry D&O insurance covering legal defence costs and settlements arising from claims made against directors. This is an important layer of protection. Beneficial owners should confirm that their CSP’s nominee directors are adequately insured.

Risks for the Nominee Director

Reputable nominees who work through established CSPs carefully vet the companies they agree to serve. The key risks a nominee director faces include:

  • Personal liability for the company’s failure to file annual returns or meet statutory deadlines
  • Association with companies engaged in fraudulent, illegal, or non-compliant activities
  • Reputational damage from being named in ACRA enforcement actions
  • Financial exposure if the deed of indemnity is not honoured by the beneficial owner

Risks for the Beneficial Owner

For the company and its beneficial owner, the risks of a poorly structured nominee directorship include:

  • A nominee who resigns suddenly, leaving the company without a locally resident director and creating immediate compliance failure
  • Using an unregistered nominee provider after the June 2025 regulatory change, exposing both the nominee and the company to criminal liability
  • A nominee who acts outside their agreed role and creates binding legal obligations for the company

Nominee Director Fees in Singapore (2026)

Nominee director services through registered CSPs typically cost between S$1,200 and S$3,600 per year depending on the complexity of the company, the level of due diligence required, and whether the nominee attends meetings or signs documents regularly.

Alternatives to a Nominee Director

If you intend to relocate to Singapore, you may be able to obtain an Employment Pass or EntrePass which, once granted, would allow you to serve as the locally resident director yourself. For background on work passes, see our Singapore Work Pass Guide and our article on Criteria for Employment Pass.

Another alternative is to invite an existing Singapore-based business partner or investor to serve as a director. In either case, the appointment must be properly documented with a First Board Resolution.

How the Company Secretary Relates to the Nominee Director

A nominee director is distinct from the company secretary. The company secretary handles ACRA filings, Annual Returns, board meeting minutes, and statutory registers. See Key Responsibilities of a Company Secretary in Singapore and ACRA Filing Requirements for more detail.

Conclusion

A nominee director is a legitimate and widely used solution for foreign entrepreneurs incorporating in Singapore. But following the June 2025 regulatory changes, only arrangements made through ACRA-registered CSPs are legally compliant. Getting the structure right — with proper legal documentation, adequate indemnities, and a reputable CSP — is essential to protect both the nominee and the beneficial owner.

At Raffles Corporate Services, we are an ACRA-registered CSP providing nominee director services as part of our comprehensive Singapore company incorporation and corporate secretarial packages. Contact us to discuss your nominee directorship needs and ensure your company is fully compliant from day one.

— The Editorial Team, Raffles Corporate Services