The Corporate and Accounting Laws (Amendment) Act 2025 (CALA 2025) commenced on 6 May 2026, and for nominee directors in Singapore, the changes are anything but incremental. Fines have quadrupled. Informal arrangements are now illegal. And a new automatic disqualification trigger means that a criminal conviction in a completely separate area of law can end your directorship overnight.

If you are a nominee director — or if you are a beneficial owner who relies on a nominee to satisfy Singapore’s resident director requirement under the Companies Act 1967 — this article sets out five things you must understand and act on now that CALA 2025 is in force.

Background: What Is CALA 2025 and When Did It Take Effect?

CALA 2025 is a wide-ranging omnibus amendment that updated the Companies Act 1967, the Accountants Act 2004, and several related pieces of legislation. The Accounting and Corporate Regulatory Authority (ACRA) confirmed that the key provisions came into force on 6 May 2026. The changes reflect Singapore’s commitment to strengthening corporate governance, aligning with international anti-money laundering (AML) standards, and raising accountability standards for those who hold directorships — whether in name or in substance.

For nominee directors specifically, three clusters of CALA 2025 changes are directly material: penalty enhancements, the mandatory Corporate Service Provider (CSP) requirement, and the new disqualification triggers. A fourth change — the named-auditor requirement — has indirect governance implications for nominees sitting on boards. We address all four below, along with a practical checklist.

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

Prior to CALA 2025, the maximum fine for breaching core director duties under the Companies Act was S$5,000. That figure was widely regarded as insufficient deterrence — a nominal cost of doing business for those willing to abuse the nominee role. CALA 2025 has quadrupled it to S$20,000.

The duties that attract this penalty include the duty to act in the best interests of the company (Section 157(1)), the duty to avoid conflicts of interest, the duty to maintain proper accounting records, and the obligations around statutory filings. These are not abstract corporate governance principles — they are enforceable obligations that apply to every director, and nominee directors are not exempt.

What This Means for Nominees in Practice

The increased fine is a direct signal from the legislature that nominee directorships are under closer scrutiny. If a company fails to file its annual return, misses its tax obligations, or engages in a transaction that creates a conflict of interest, the nominee director on record bears exposure — regardless of what the private nominee agreement says about indemnification from the beneficial owner.

It is worth repeating a principle that Singapore courts have consistently upheld: a private deed of indemnity between a nominee director and the beneficial owner cannot override the nominee’s statutory duties. If ACRA or the courts find a breach, the fine lands on the director — not on the arrangement that put them there.

Thing 2: Nominee Director Appointments Must Now Be Made Through a Registered CSP — Informal Arrangements Are Illegal

This is perhaps the most operationally significant change for many companies. Under CALA 2025 and the Corporate Service Providers Act (which took effect on 9 June 2025), any person who provides nominee director services “by way of business” must be a registered CSP under ACRA’s regulatory framework.

This means that the common practice of asking a friend, a business associate, or even a professional from outside the regulated sector to act as nominee director — without formalising the arrangement through an ACRA-registered CSP — is now illegal. The penalties are severe:

  • An individual who arranges nominee director appointments outside of a registered CSP may face fines of up to S$10,000.
  • Registered CSPs that fail to ensure their nominee directors are “fit and proper” may face fines of up to S$100,000.
  • Providing nominee director services without CSP registration can attract imprisonment of up to two years in the most serious cases.

Who Counts as Providing Services “By Way of Business”?

The “by way of business” qualifier is important. A genuine executive director who also holds shares is not a nominee director for these purposes. The target of the legislation is the commercial nominee — someone appointed specifically to satisfy the residency requirement, typically as a service provided to a foreign beneficial owner.

If your company uses nominee director services from an incorporated corporate secretarial firm or a professional services provider, you should verify that the provider is registered with ACRA as a CSP. This is now a compliance obligation, not merely best practice. You can check the ACRA register of CSPs to confirm registration status.

Thing 3: Money Laundering Convictions Now Trigger Automatic Director Disqualification

Before CALA 2025, the grounds for automatic director disqualification were largely confined to insolvency-related events and certain criminal convictions under the Companies Act itself. CALA 2025 has expanded the disqualification triggers significantly.

Most notably, a conviction for money laundering under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) now triggers automatic disqualification from all directorships in Singapore. This is a direct response to Singapore’s enhanced AML/CFT obligations under the Financial Action Task Force (FATF) standards, and it reflects the government’s concern that the nominee director structure has historically been used as a vehicle for obscuring beneficial ownership in money laundering schemes.

Implications for Nominee Directors

For individual nominees — particularly those who hold directorships across multiple companies as part of a professional portfolio — this change is material. A conviction in one area of financial crime can strip you of all your directorships simultaneously. Given that nominee directors often serve on boards of companies they know little about, the risk of inadvertent exposure to AML-related issues (especially if the beneficial owner is engaged in suspicious activity) is non-trivial.

This reinforces the importance of conducting proper due diligence on the beneficial owner before accepting a nominee appointment. An ACRA-registered CSP is required to perform this due diligence under its AML/CFT obligations — which is one of the key reasons why the mandatory CSP channel exists.

Thing 4: Auditors Must Now Name the Responsible Public Accountant — Governance Implications for Nominees

CALA 2025 also amended the Accountants Act to require that audit reports name the specific public accountant who is primarily responsible for the engagement. Previously, audit reports were issued in the name of the audit firm as an entity. The change is intended to enhance individual accountability within audit firms.

For nominee directors who sit on boards of companies with weak internal controls or opaque structures, a named auditor creates a greater likelihood that governance failures will be formally documented in the audit report. Named professionals are more likely to escalate concerns and issue qualified opinions. Nominees should understand that audit qualifications will now carry the weight of an individual professional’s opinion — raising the governance stakes considerably.

Thing 5: A Deed of Indemnity Does Not Protect You Completely — Review Your Arrangement Now

Many nominee directors in Singapore operate under a Deed of Indemnity — a private agreement in which the beneficial owner agrees to hold the nominee harmless against any liability arising from the directorship. This is a reasonable commercial arrangement, but it has critical limits that CALA 2025 has made even more important to understand.

A Deed of Indemnity is a contractual document. It binds the parties to it. It does not bind ACRA, the courts, or any third party. If ACRA imposes a fine on a nominee director for a statutory breach, that fine is owed by the director — not the beneficial owner. The nominee may then seek to recover from the beneficial owner under the Deed, but the beneficial owner may be located outside Singapore and beyond reach of enforcement, may be insolvent, or a court may find the Deed itself unenforceable if its purpose was to facilitate a breach of statutory duty.

With fines now at S$20,000 and criminal exposure for non-compliant arrangements, nominee directors should review their existing agreements, ensure all arrangements run through an ACRA-registered CSP, and update indemnity documentation accordingly.

Post-CALA 2025 Compliance Checklist for Nominee Directors

  1. Confirm CSP registration. Verify that the provider arranging the nominee appointment is registered with ACRA as a Corporate Service Provider. Restructure any informal arrangement immediately.
  2. Review the nominee agreement. Ensure the Deed of Indemnity reflects the post-CALA 2025 penalty levels and includes enforceable obligations. Legal review is advisable.
  3. Conduct due diligence on the beneficial owner. Understand who the beneficial owner is and what their business involves. Accepting a nomination without due diligence increases AML exposure.
  4. Ensure statutory compliance is current. Check that the company’s annual returns are filed, accounts are up to date, and all IRAS obligations are met.
  5. Review D&O insurance coverage. With the maximum fine now at S$20,000, your directors’ and officers’ insurance should adequately cover fines and defence costs.
  6. Update the Register of Nominee Directors. Section 173C of the Companies Act requires companies to maintain this register. Ensure it accurately reflects the beneficial owner’s particulars.

Conclusion: Get Your Nominee Arrangement CALA-Compliant Today

CALA 2025 has materially raised the stakes for nominee directors and the companies that use them. Higher fines, criminal exposure for non-compliant arrangements, expanded disqualification triggers, and heightened audit accountability all point in the same direction: nominee directorship in Singapore is now a serious regulated activity that demands professional management.

Raffles Corporate Services is an ACRA-registered Corporate Service Provider offering fully compliant nominee director services — including AML due diligence on beneficial owners, structured indemnity documentation, and ongoing compliance monitoring. If your current nominee arrangement needs to be regularised, or if you need a resident director in Singapore, contact us for a consultation.

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To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

— The Editorial Team, Raffles Corporate Services