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The Important Role of Singapore Resident Directors

The Important Role of Singapore Resident Directors

According to the Singapore Companies Act, all companies in Singapore must appoint a Resident Director who is either a citizen, permanent resident (PR), or a valid employment pass (EP) holder to act as the legal representative of the company.

The way new-age businesses operate has changed and is still evolving, so it is essential for you as an investor to appoint a suitable candidate to be the resident director for your company. They are individuals who live and work in Singapore, and they can be important when it comes to protecting you from various liabilities that might arise.

This guide will discuss some of these risks and how they can help!

What does a good resident director do?

The regulatory and compliance environment is ever-changing and complex, and the risk you face is getting higher. Staying compliant is not challenging if you have the proper support; it is essential to stay on top of the game and know the regulations and compliance impacts your investment. They have in-depth knowledge of the regulatory system in Singapore and can be a massive asset to you and your company. A qualified individual can help you and keep you aware of what is going on in Singapore, the latest tax laws, common law duties, changes to the Singapore Companies Act, and any other related legislation that has been passed that impacts your investment.

This will ensure that you don’t risk falling into investment pits and end up in a non-favorable position. So, what makes good resident directors. Good Resident Directors stay up-to-date with all the legal developments in Singapore. This way, they’ll better understand how these updates might affect their clients’ businesses or if there’s anything they could do proactively before something unfavorable happens.

Directors don’t always just deal with risk management; sometimes, good directors will advise how to enhance your service by guiding you on the right path while avoiding any issues. For example, trained Resident Directors may be able to guide corporate structuring to ensure tax efficiency and better management of the investments. Highlight the risks for your organization, and implement steps that can help reduce/remove those risks

Experienced directors must be resourceful to find out what works best for their investments depending on your business’s stage. Visionary Resident Directors must have access to resources like lawyers, advisors, consultant officers, or sub-matter specialists who can assist with your company’s needs depending on their area of expertise. This will save you tons of time and resources trying to find answers or solutions.

They must be proactive, responsible, and always stay in touch with you by providing regular details on the investment environment in Singapore or impacting regulations in the region that impacts your work so that you’re always up-to-date and aware of anything going on outside of your control. It might sound tedious, but it ensures you don’t get left behind when things change, which could cost time, money, and sometimes emotional stress.

Requirements for Singapore Directors

As shown below, the requirements to be a resident director are:


  • Singapore-based residential address

  • The age limit should be 18 years and above

  • A person who is less than 70 years old

  • No education qualifications are required.

  • Someone who is not a registered bankrupt

  • Not incompetent or unfit.

  • Not prohibited from applying by the law

  • Not in default of any requirement under the Act.

  • A citizen, permanent resident (PR), or a valid Employment Pass (EP) holder

Given that it isn’t challenging to be a director, it should be no surprise that many residents are offering to undertake the resident director’s role. However, they often don’t understand their role or the level of liability they place on themselves and the companies. Hence, selling their resident status does not answer your investment needs. This can result in costly penalties and poor company compliance ratings, among other adverse impacts that will affect the overall investor’s confidence in you.

The Importance of Choosing an Experienced Singapore Resident Director

“With a proper understanding of the responsibilities of a director, you are doing a good thing for your company’s future.” said at the Directors’ Proficiency Programme hosted by the Accounting and Corporate Regulatory Authority (“ACRA”), which oversees all registered businesses and public accountants in Singapore. It should be noted that the resident director does not need to be an ordinarily resident or Singapore citizen, or even a permanent resident. The person can also be an individual from any other country, as long as they can commit the time and resources necessary to perform their duties.

The Benefits of Hiring a Resident Director:

  • It helps you avoid costly penalties

  • Better company compliance ratings, among others

  • It makes it easy to comply with regulatory requirements in Singapore, such as filing annual audited financial statements by 18 March each year (reference ACRA Act) without risking fines up to $100,000 per offense. This enables your investment to deal more efficiently with authorities on tax matters related to issues – such as GST refunds which may arise during audit periods.

One fact is that the law does not significantly differentiate if a director is “active” or “sleeping.” This means that even though they are not involved in day-to-day operations, they must ensure that the company fulfills its obligations on time.

Examples of such statutory obligations include:

Filing annual audited financial statements by 18 March (reference ACRA Act). Paying business taxes such as GST and other fees on time. Singapore law has stringent penalties for late filing of these records; an offense can result in fines up to $100,000 per offense. All required business license(s) are duly renewed to allow the legal operation of the investment entity. Headache, isn’t it?

A company that does not comply with the common law for an annual routine matter such as its annual general meeting and approval of its audited accounts will find it hard to catch up the following year. The company’s auditor, its secretary, and the finance department all have to work together on this issue – wasting your company resources and having headaches doing multiple follow-ups. They also have to keep in mind a new deadline for the next year, or they will repeat last year’s offense.

What are the power and responsibilities of a resident director?

The company’s Constitution governs the powers of directors. This document contains specific clauses which can be modified to fit companies’ needs. Examples of these clauses include loans, mortgaging company assets, granting power of attorney to corporations for the benefit of that particular corporation, voting rights and classes of shares, etc.

Sometimes, an employer will give a worker special powers. When exercising those powers, it is best to get the employer’s permission in writing or at a meeting of its board of directors. The common laws would also make the terms and conditions for their resolution in writing to be passed and how to convene a meeting. For example, most merger and acquisition agreements require the majority of directors to sign resolution documents before it is deemed given and therefore valid.

The benefit of having a resident director is that they usually have a Singpass or employment pass (most likely, they would already have one If the person is a Singapore citizen or permanent resident). This Singpass would allow the director access to sign on behalf of all Singapore residents, which is essential for companies that constantly communicate with one another.

For example, when you file for a work pass, the company can choose to go by paper application or online through MOM’s e-service portal. Paper applications take around three to four weeks to process; the time for e-services is just two weeks. A great resident director would advise and go the extra mile and provide complementary cost-effective and time-efficient services for companies.

What is a nominee director?

Suppose you are looking to register a company in Singapore. In that case, the Singapore laws under the Companies Act require that you have at least one director who is a citizen or permanent residence of Singapore.

But what if you don’t have someone in Singapore to act as your company resident director? The solution is to hire someone to represent your company for a nominee director fee. This person is referred to as a nominee director (ND). The person appointed as Nominee director must be a permanent resident or citizen of Singapore with a permanent address. They are only assigned duties to ensure that the company complies with Singapore’s company regulatory requirements.

Why does Singapore require a local director?

The Companies Act of Singapore requires that a company have a local director. The local director is held responsible in case the company breaks any laws. A nominee or local director in Singapore undertakes due diligence to ensure that the company abides by the law. Singapore laws and rules clearly state the responsibilities of a nominee director, which are similar to the duties of a regular director.

Weighing the risk of hiring a nominee director.

Singapore’s company act states: “The business of a company shall be managed by, or under the direction or supervision of, the directors” and that ”These directors may exercise all the powers of a company except any power that or the common law of the company requires the company to exercise in general meeting.”

This implies that they are responsible for making critical decisions on behalf of the company unless the matter requires a special resolution through the company’s shareholders. Therefore, it is essential to appoint a reputable company that will appoint a nominee director to help run your investment. You can also negotiate with the company to limit the powers of the nominee director contractually through a service agreement. To further minimize the risk of hiring a nominee director in Singapore, you should appoint more than one executive director who is not a Singapore resident to run and manage the company’s affairs.

Risks undertaken by a nominee director

A nominee director in Singapore is responsible for ensuring that the company does not violate any laws set by the government or as stipulated under the Companies Act of Singapore. If a company breaks any set laws, they are answerable to the Singapore authorities. On behalf of the foreigner. Whereas a nominee director’s power may be limited, their liability is not. A severe violation of the laws by the company he represents can lead to prosecution at the court of law of Singapore. To avoid such occurrences, the nominee must sufficiently and effectively monitor the company’s activities to ensure that the company is operating within the stipulated company laws.

The duties of the Nominee Director.

A nominee director is a person the company appoints to act as its representative when it cannot be present in Singapore. The nomination must be made before or at the time of incorporation and can only take place once, which means that if you change your mind after appointing one nominee director, you need to go through this process again.

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You can read more about the benefits of the Nominee Director here..

Should I hire an independent resident director or go with a professional firm?

When resident directors are not known to the company, there can be a potential for breach of trust.

There are real events where resident directors conduct unlawful acts behind the scene, which blindsided the investment and jeopardized the company. A recent example of this was an instance where a resident director, employed by a foreign-owned Singapore company, has the qualifications and is appointed to be both the lawyer and the company secretary of the company used his position to take out multiple loans totaling hundreds of thousands without the knowledge of his client/employer-the beneficial owner.

Such rulings can occur if they decide to have free reign over the company’s resources. When engaging a nominee director from a commercial or professional corporate secretarial firm, their role would be much more defined. Such agreements typically state the restrictions on the powers of the nominee director, who has the ultimate authority to make decisions and with whom they should liaise to obtain instructions.

In a scenario such as if the nominee director resigns, the professional corporate secretarial firm or professional-managerial firm will be obliged to ensure that a replacement is appointed on time and the company will remain compliant with the law. Additionally, by engaging these directors from a professional corporate secretarial firm or professional-managerial firm, the company can be assured that they have undergone a thorough vetting process to satisfy their clients.

Roles and responsibilities of Singapore resident directors.

According to the laws, a resident director must perform their duties and responsibilities as bestowed by the company. The roles and responsibilities of these directors are as follows:

Attending company meetings.

As part of their responsibilities, a Company director must attend all company meetings. This includes meetings such as the Annual General Meetings of the Company. The director working alongside the secretary, in are responsible for giving directions, organizing, calling, and chairing the Annual general meeting, where financial statements, remuneration, and essential matters affecting the company are presented before the shareholders and directors.

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Avoid conflict of interest.

It is the responsibility of a company director to avoid conflict of interests within the company. A director’s interests should not be in line with the company’s. This means that directors should clearly state if they are interested in any of the company’s proposed transactions. This can be situations like where a subcontracted company belongs to a member of the director’s family or if a company is working alongside another company where the director has some shares.

Appointing Auditors.

Auditors play an essential role in checking the company’s books of account. Therefore, the director must appoint the company auditors within three months of incorporation to check on the company’s accounting books.

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Meeting the requirements of the Singapore Companies Act.

The rules and laws set by the government must be followed to the latter. As the company director, it is your responsibility to ensure that all the regulatory and compliance demands under the Companies Act are met. This include:

  • Conducting the Annual General Meeting (AGM).

  • Annual filing of the company’s return.

  • Keeping of statutory registers such as member’s register, director’s register, and register of charges.

  • Reporting any company changes to ACRA

  • Maintaining a local registered business address.

Normally, a company director works in hand with the company secretary to ensure that the directors meet all the statutory compliance requirements as per the law. This means that if the directors do not meet all the requirements, they are liable for all the penalties that may be imposed on the company in question.

Chairing of the statutory meeting.

It is the responsibility of the directors to chair all statutory meetings and provide reports regarding the same. Such reports are supposed to be distributed to all members and company shareholders through the company secretary.

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When can a company resident director resign?

Resignation at work is partly attributed to personal reasons or company policies. A resident company director can resign under these circumstances:

  • When they are in poor health.

  • When the director is disqualified.

  • When they underperform.

  • Conflict interests arise due to management changes.

  • Early retirement due to personal reasons.

  • When they have exceeded the age limit.

However, a director’s resignation can only be valid if:

  • The director follows the due resigning procedures stipulated in the company’s constitution and ACRA.

  • At least one resident director from Singapore is left in the company.

Once a director is done with all the resignation procedures, they are to submit a written resignation notice via a registered email address to the company’s registered address.

A complete guide for foreign business owners & entrepreneurs when setting up a company in Singapore

Do not be disheartened if you are a foreigner without the proper residence status; you can still incorporate your company in Singapore by appointing a nominee resident director during the incorporation of your legal investment entity. The nominee director service is readily available when you engage one of the many company officers to incorporate your Singapore company. Even by doing so, the company remains compliant in the eye of the government. There are a few roles/duties one can consider outsourcing while you focus on developing or refining the commercial business activities, and they are:

  1. Company Secretary

  2. Resident Director

  3. Accountant

  4. HR & Payroll

  5. Tax Agent

  6. Auditors (where applicable)

When setting up a Singapore company, you are better off working with certified experts as a filing agent under the corporate regulatory authority ACRA. The right service provider will act and support you, putting your interests at heart as their license and a section business operation depends on it. Professionals are well versed in the Singapore companies act and other corporate-related essentials to maintain a compliant status for your Singapore company. The list of services available from qualified professionals includes, but is not limited to, the following.

  1. Company secretary (c s )

  2. Nominee Resident Director

  3. Provision of a Registered Business Address

  4. Incorporation of a Company

  5. Setting up of a corporate bank account

  6. Accounting services (e.g., bookkeeping, preparation of financial statements)

  7. Tax filing (e.g., filing of estimated chargeable income & annual tax returns)

Many business owners have entrusted the initial years to a trusted professional service provider while focusing on developing the commercials for the investment.

What risk do I have when engaging a 3rd party for their nominee director services?

As mentioned above, a director of a Singapore company has almost every authority to act in the company’s name; that means the same when you engage professionals for their nominee director services. So how can you protect your interests while working with service providers?

Bank Signatory

When the company is set up successfully, you must apply for a corporate account with a local bank to ensure that the company can function and conduct transactions. It is also required to prove the status of your registered share capital by crediting the equivalent amount/value into the account when it is ready.

The bank will first require a board resolution to be signed by the resident director for the approval to set up the account but does not require the resident director to be part of it. The common law is to appoint yourself or your employee. This individual’s position can be the executive director in a Singapore company where they need not be physically in the country. There is no limit to the number of signatories or officers in Singapore you can appoint. So most companies appoint a second person when applying for a bank account. In this way, the nominee director does not have access nor rights to authorize any transaction using the corporate account.

Authorized signatory – contracts

Make it clear in writing, or some even took to the extent of indicating in the company’s constitution how the company should operate and who has the authority to sign off critical documents representing the Singapore company. This is also one of the alternatives some companies take to ensure they protect themselves and their investments. It is safe to engage professional service providers for their nominee company director service. Based on historical records, there are relatively low to zero adverse outcomes when this is done correctly.


Resident directors play an essential role as staff members in ensuring that all the company’s needs and goals are met at home or in foreign countries. Therefore, employing directors with the experience and skills required to perform their duties is critical. For foreigners looking to register companies in Singapore, choosing the right person to represent your company will determine the success or failure of your investment.

Our team of experts can deliver all corporate services on a world-class platform at very affordable prices — the best of all worlds.