What a Foreigner Should Consider When appointing A Nominee Director For A Singapore Company

What a Foreigner Should Consider When appointing A Nominee Director For A Singapore Company

Choosing a nominee director seems like an easy task, especially if you have a trustworthy company handling the hiring for you. Now, here’s the catch, despite all the securities there are still considerations to ponder on before you pick someone to be your nominee director.

  1. Age – your nominee director, must be of 18 years old the least.
  2. Nationality – a Singaporean citizen, a permanent residence holder or an employment pass holder is the requirement for a nominee.

He or she must not have any of the following qualities:

  • Convicted of fraud and dishonesty
  • Has been disqualified by a court
  • Committed an offense under the Companies Act that demands a three or more
  • Have not complied with High Court orders regarding the Companies Act within a five year period.
  • He or she is wound up for national security and interest

 

Other considerations in choosing:

  1. Maturity  – the first thing that a nominee director needs are maturity, not just in the aspect of age, but also in the way of thinking. A nominee director despite not being an active director still needs to be mature enough to take his or her job seriously.
  2. A Sense of Responsibility – a nominee director, may not be directly involved in a company’s operations, but there are still statutory duties required of him or her. These assignments include convening the annual meetings, signatory obligations, and the filing of annual reports. If the nominee director takes these tasks for granted, then you might encounter problems.
  3. A Sense of Loyalty & Confidentiality – one of the main reasons why you hire a nominee director is for anonymity. Your nominee director should be loyal to you, your interests creditors should come and investigate, he or she must protect your assets and keep the confidentiality of your agreement.
  4. Management Skills – there are times when a nominee director also needs to take managing responsibilities, after all your nominee director’s name will be the one printed in the public records, not yours.
  5. Credentials – doing a background check on a nominee director is usually one of the services in Singapore’s job, but it doesn’t hurt to know if the person you hired has bad records or criminal history.
  6. Personality – this is included because though a nominee director is just your representative, how he or she acts in public will affect your company’s reputation.

Things to Secure After Hiring a Nominee Director

Before you start your business with the nominee director hired by any company offering nominee director services you need to secure the following documents:

  1. A Power of Attorney – this document will ensure that you can control your company despite your name not being in the public registry. With this in hand you can make decisions, sign contracts, make bank accounts and such without being dependent on your nominee director to always be there to sign and approve things. It’s your company after all, and you want all decision-making capabilities to be with you not anyone else.
  2. Declaration of Trust – a document stating that your nominee director is only acting and will only act upon your instruction. This secures that your interests will be protected and avoid unnecessary disputes from arising.
  3. An undated resignation letter – this is just a precautionary measure in any event that your nominee acts against your instructions. This must have his or her signature to make it legal, your nominee director services in Singapore will usually secure this for you.

A nominee director is an aid to your business ventures and even if there seem to be precautionary measures taken to secure your best interest. What is important is that you, your services company and your nominee director have a formal and proper orientation as to what should be done and what shouldn’t be done. And having a trustworthy and responsible nominee all rests in the hands of the corporate secretarial services you hire.

If you are looking for a corporate secretarial services, we’ll be glad to help you. We at LEXiCO offer secretarial, nominee director and nominee shareholder services. Give us a call or ask us a question.