When Singapore’s Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025) commenced on 6 May 2026, it did not merely tinker at the margins of corporate governance. For nominee directors in particular, the changes are material, immediate, and carry real personal liability consequences. If you are currently serving as a nominee director — or your company relies on one — this article sets out the five things you must understand now.

Our earlier article on CALA 2025: What Every Singapore Director Must Know covered the broad landscape of changes. This piece focuses specifically on the implications for nominee directors, where the legal exposure has changed most significantly.

1. The Maximum Fine for Breaching Director Duties Has Quadrupled to S$20,000

Under the amended Companies Act, the maximum fine for breaching core director duties — including the duty to act honestly under Section 157(1) and the duty to use reasonable diligence — has increased fourfold from S$5,000 to S$20,000. The maximum imprisonment term of 12 months remains unchanged, meaning a nominee who commits a serious breach now faces both a significantly higher financial penalty and a custodial risk.

For nominee directors, this matters enormously. A nominee who simply lends their name to a board without genuinely overseeing the company’s affairs — failing to attend board meetings, rubber-stamping resolutions without scrutiny, or ignoring signs of financial misconduct — is not protected by the fact that they are a “nominee.” The Companies Act imposes its duties on all directors, regardless of title. CALA 2025 has simply made the price of ignoring those duties four times more expensive.

The message is clear: passive board participation is no longer a viable posture. If you hold a directorship, you must exercise it.

2. Money Laundering Convictions Now Trigger Automatic Director Disqualification

CALA 2025 introduced a new category of automatic disqualification: conviction for a money laundering offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) now automatically disqualifies a person from holding a directorship in any Singapore company.

Previously, disqualification on this basis required a court order. The change to automatic disqualification reflects Singapore’s heightened focus on financial crime governance following ACRA’s broader anti-money laundering reforms.

For nominee directors, the practical implication is this: a nominee who is later convicted of a money laundering offence — even one unrelated to the specific company they serve — will be automatically and immediately disqualified. Any company whose only locally resident director is such a nominee will instantly find itself in breach of Section 145 of the Companies Act, which requires at least one director ordinarily resident in Singapore at all times.

This underscores the importance of vetting your nominee carefully, and of ensuring that your nominee arrangement is structured through a reputable, ACRA-registered Corporate Service Provider with proper fit-and-proper screening procedures in place.

3. Informal Nominee Arrangements Are Now Illegal — and the Penalties Are Severe

This is perhaps the most operationally significant change for companies that have historically appointed friends, business associates, or family members as nominee directors without going through a formal service provider.

Under the Corporate Service Providers Act 2024 (which took effect on 9 June 2025, ahead of CALA 2025), nominee director services provided “by way of business” must now be arranged exclusively through an ACRA-registered Corporate Service Provider (CSP). The phrase “by way of business” is interpreted broadly: any arrangement where one party regularly provides nominee director services — even informally — falls within scope.

The penalties for non-compliance are severe:

  • A person who acts as a nominee director without going through a registered CSP faces fines of up to S$10,000.
  • A person who provides nominee director services without being registered as a CSP faces fines of up to S$50,000 and/or imprisonment of up to 2 years.

If you currently have a nominee director arrangement that does not involve a registered CSP, you should treat this as a compliance gap requiring immediate attention. Our guide to nominee director services in Singapore explains how properly structured arrangements work and what you should look for in a CSP.

4. Audit Reports Must Now Name the Lead Public Accountant — Nominees Need to Understand the Governance Implications

CALA 2025 introduced a requirement that every audit report of a Singapore company must now identify by name the individual public accountant primarily responsible for the audit engagement. Previously, audit reports bore the name of the audit firm only.

This change, modelled on practices in the United States, United Kingdom, and Australia, is intended to promote personal accountability for audit quality. Its governance implications for nominee directors are indirect but real.

Nominee directors who sit on boards — and particularly those on audit committees — must now recognise that the named auditor is a specific individual whose professional reputation is on the line. This creates a stronger incentive on the auditor’s part to surface governance concerns, related-party transactions, and accounting irregularities. A nominee who has been ignoring these matters and relying on generic, impersonal audit reports will find that this defence becomes harder to sustain.

In practical terms, nominees on boards of companies subject to statutory audit should take a more active interest in the audit process — meeting with the named auditor, reviewing the audit committee’s terms of reference, and ensuring that the company’s AGM procedures properly address auditor-related matters.

5. A Deed of Indemnity Does Not Override Your Statutory Duties — Ever

Almost every nominee director arrangement includes a Deed of Indemnity, under which the beneficial owner (or the foreign principal who controls the company) indemnifies the nominee against personal liability arising from actions taken in accordance with the principal’s instructions.

This is a legitimate and sensible commercial arrangement. But there is a critical legal point that many nominees do not fully appreciate: a Deed of Indemnity does not and cannot override your statutory duties as a director under Singapore law.

Section 172 of the Companies Act renders void any provision in a company’s constitution, or any contract, that purports to exempt a director from liability for breach of duty, negligence, or fraud. A private indemnity from a beneficial owner operates between the two parties contractually, but it does not affect the regulator’s ability to prosecute you, nor does it prevent ACRA or the public prosecutor from pursuing you for a statutory breach.

Under CALA 2025, with the maximum fine now at S$20,000 and automatic disqualification on the table for money laundering, nominees must ask hard questions before accepting any appointment:

  • Do I have sufficient visibility into this company’s operations to satisfy my duty of care?
  • Is the beneficial owner providing me with adequate board information, minutes, and financial updates?
  • Is my indemnity backed by a solvent counterparty who can actually pay if something goes wrong?
  • Is this arrangement structured through a registered CSP that has conducted proper AML screening?

For a fuller picture of what the register of nominee directors requires, see our article on the Register of Nominee Directors in Singapore.

What Nominees Should Do Right Now

If you are currently serving as a nominee director, or if your company relies on one, the following action checklist is prudent given the CALA 2025 changes:

  1. Audit the nominee arrangement — confirm it is structured through an ACRA-registered CSP. If it is not, rectify this immediately to avoid the penalties described above.
  2. Update your Deed of Indemnity — ensure it reflects current CALA 2025 penalty levels and that the indemnifying party’s financial position is adequate to back it.
  3. Review information flow — as a nominee, you are entitled to receive all board papers, financial statements, and material correspondence. If you have not been receiving these, request them formally and document your requests.
  4. Check your D&O insurance — if you have Directors & Officers liability insurance, confirm that the coverage limit has been reviewed in light of the new S$20,000 maximum fine and the broader exposure under CALA 2025.
  5. Know your disqualification risk — if you hold multiple directorships as a nominee, ensure that you are compliant across all of them and that none of your co-directors is under investigation or has a pending money laundering matter.

Conclusion

CALA 2025 has raised the stakes for every director in Singapore — but for nominee directors in particular, the changes require an immediate and practical response. Higher fines, automatic disqualification for money laundering, mandatory CSP requirements, and named audit accountability together create an environment in which passive board participation carries genuine legal and financial risk.

If you are looking to appoint a nominee director for your Singapore company through a properly registered Corporate Service Provider, or if you need advice on restructuring an existing nominee arrangement in light of CALA 2025, the team at Raffles Corporate Services can help. As an ACRA-registered filing agent and corporate service provider, we ensure that all nominee arrangements are compliant, properly documented, and appropriately risk-managed.

— The Editorial Team, Raffles Corporate Services