Appointing directors is one of the key legal steps when incorporating a company in Singapore. Directors are responsible for managing the company’s affairs, ensuring statutory compliance, and acting in the best interests of the company and its shareholders.
Under the Companies Act (Cap. 50), every company incorporated in Singapore must appoint at least one director who meets specific residency and eligibility criteria. Understanding these rules — and the compliance implications of using a nominee director — is essential for both local and foreign-owned businesses.
Who Can Be a Director
A director is an individual who manages, supervises, or makes decisions for the company. To qualify as a company director in Singapore, the individual must:
- Be at least 18 years old.
- Be a natural person (not a corporate entity).
- Have full legal capacity to contract.
- Not be an undischarged bankrupt or disqualified under the Companies Act or other legislation.
ACRA requires companies to keep an up-to-date register of directors, containing each director’s full name, identification number, nationality, residential address, and date of appointment.
Resident Director Requirement
Every company must have at least one director who is ordinarily resident in Singapore. This means that the person must live in Singapore permanently or on a long-term basis and be easily contactable.
The following individuals typically qualify as ordinarily resident:
- Singapore Citizens
- Singapore Permanent Residents (PRs)
- Holders of valid Employment Pass, EntrePass, or ONE Pass who have a local address and are permitted to act as directors under their visa conditions
Foreign entrepreneurs who do not personally reside in Singapore are therefore required to appoint a local resident director before incorporation.
Foreign Directors and Multiple Directorships
Companies are free to appoint both local and foreign directors, provided that at least one local-resident director is maintained at all times.
There is currently no statutory limit on how many companies a person may serve as director. However, under Singapore’s evolving corporate governance framework, directors are expected to be “fit and proper,” capable of discharging their duties with integrity, competence, and adequate time commitment.
Appointment and Cessation of Directors
- The appointment or cessation of a director must be filed with ACRA via BizFile+ within 14 days of the change.
- Each appointment requires a board resolution and the director’s consent to act.
- When a director resigns, is removed, or becomes disqualified, the company must update ACRA and its internal registers promptly.
Failing to keep the directors’ information current may result in penalties or enforcement actions against the company and its officers.
Nominee Directors and Local Representation
For companies with only foreign shareholders and management, it is common to engage a nominee director to satisfy the local-resident director requirement. A nominee director acts as the company’s formal local representative but does not participate in day-to-day operations unless specifically authorised.
However, the use of nominee directors is now subject to stricter regulation under Singapore’s Corporate Service Providers (CSP) framework, which took effect in June 2024.
Key rules include:
- Only Registered CSPs May Arrange Nominee Directors
Under the new Corporate Service Providers Act, only licensed or registered CSPs may offer nominee director services. - Fit-and-Proper Assessment
Before appointing a nominee director, CSPs must conduct due diligence to ensure the individual is suitable — including checks on integrity, financial soundness, and compliance history. - Register of Nominee Directors (ROND)
Companies are required to maintain and update a Register of Nominee Directors, recording both the nominee and their nominator’s details. Any change must be lodged with ACRA within 7 days. - Enhanced Transparency Requirements
ACRA may request disclosure of the nominee’s nominator to improve transparency and prevent misuse of corporate structures for unlawful purposes. - Penalties for Non-Compliance
Individuals or entities that provide nominee director services without being a registered CSP may face fines of up to S$10,000. CSPs that breach their obligations may also face heavier sanctions or deregistration.
While the nominee director model remains a practical solution for foreign-owned companies, businesses should ensure their arrangements are made only through registered and reputable CSPs to stay compliant with the new law.
Directors’ Duties and Responsibilities
Directors in Singapore owe both statutory and fiduciary duties to the company. These include:
- Acting honestly and in good faith in the best interests of the company
- Exercising due care, skill, and diligence in decision-making
- Ensuring compliance with the Companies Act, ACRA, and IRAS requirements
- Preventing misuse of company funds and conflicts of interest
- Ensuring timely filing of annual returns, financial statements, and tax submissions
A director who breaches these duties may face personal liability, disqualification, or criminal penalties.
Practical Considerations for Foreign-Owned Companies
Foreign investors incorporating a company in Singapore often face the practical issue of not having a local director. The most common and compliant solution is to appoint a nominee director through a licensed CSP that also handles corporate secretarial and compliance support.
When engaging a nominee director:
- The nominee’s role should be clearly limited to statutory compliance and representation.
- The company should provide an indemnity agreement protecting the nominee from liabilities arising from management decisions.
- Annual Know-Your-Client (KYC) checks and periodic reviews are now standard practice for CSPs under ACRA’s new compliance regime.
Summary
Every Singapore company must have at least one local-resident director who meets ACRA’s statutory requirements. Additional directors — whether local or foreign — may be appointed freely, provided the company remains compliant.
For foreign-owned entities, engaging a nominee director through a registered Corporate Service Provider is both lawful and practical, but must now adhere to tighter governance and disclosure rules.
Properly appointing and managing directors is not just a formality — it’s the foundation of responsible corporate governance. By understanding ACRA’s rules and maintaining transparency, companies can operate confidently and remain in good standing with Singapore’s regulators.