As every company requires a local resident director, if there are foreigners who are looking to incorporate a company in Singapore, they will need a local resident to fill the position of the local resident director. A local resident director is someone who is ordinarily residing in Singapore. This DOES NOT mean that this person needs to be a Singaporean or a Singapore PR. It means that this person needs to be residing in Singapore. This person can be a foreigner with a valid work pass. While the foreigner who is looking to set up a company may eventually apply for a valid work pass to qualify him to fill the position as the local resident director, this position needs to be filled immediately when the company is incorporated. Hence, the company may elect to appoint a nominee director to fill the position instead.
The nominee director also has responsibilities. In the event that the rest of the directors or the foreign stakeholder is not contactable, the nominee director will have to bear the cost of running or winding down the company. There is also the possibility that there may be proceedings against the company and the company needs to fork out legal costs. The security deposit is to safeguard the interests of the nominee director and is there for the nominee director to draw upon in the event that these costs crop up.
Upon cancellation of the nominee director service, the security deposit will be returned to the company within 14 days. The cancellation usually comes about when the foreigner has obtained a relevant work pass to fill the position as the local resident director or the company has wound up (i.e. ceased to exist).
The editorial team at singaporesecretaryservices.com
The editorial team at Singapore Secretary Services
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