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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 really important for you as a business owner to appoint a suitable candidate to be the resident director for your company. Resident directors 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 resident directors can help with them!

Business Man

What does a good resident director do?

The regulatory and compliance environment are ever-changing and getting complex, the risk you face is getting higher. Staying compliant is not challenging if you have the right support in place, it is important to stay on top of the game and know the regulations and what compliance matter impacts your business.

A resident director who has in-depth knowledge of the regulatory system in Singapore will be a massive asset to you and your business. A qualified individual can help you and keep you aware of what is going on in Singapore, the latest tax laws, changes to the Singapore Companies Act, and any other related legislation that has been passed that impacts your business.

This will ensure that you steer clear of all potential pitfalls and ending up in a non-favorable position.

So what actually makes a good resident director.

A good Resident Director stays up-to-date with all the legal developments happening 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 negative happens.

Resident Directors don’t always just deal with risk management; sometimes a good resident director will advise how to enhance your business by guiding you on the right path yet avoiding any issues from arising.

Trained Resident Director

For example, a trained Resident Director may be able to provide guidance on corporate structuring to ensure tax efficiency as well as to better manage the investments your business is involved in. Highlight what the risks are for your organization, and implement steps that can help reduce/remove those risks.

An experienced Resident Director must be resourceful in order to find out what works best for your business depending on the stage your business is progressing into. A resourceful Resident Director must have access to resources like lawyers, advisors, consultants, 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 a solution, the Resident Director will take care of matters for you.

A Resident Director must be proactive, responsible and always stay in touch with you by providing regular updates on the business environment in Singapore or impacting regulations in the region that impacts your business 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 Resident Directors

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



  • Singapore-based residential address​
  • For persons over 18 years of age.​
  • A person who is less than 70 years old.​
  • No education qualifications are required​.
  • Someone who is not a registered bankrupt.​
  • Not an incompetent or unfit director of insolvent companies​.
  • Not prohibited from acting as a director​
  • 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 difficult to be a resident director, it should come as no surprise that there are many local residents offering to undertake the resident director’s role.

However, the directors often don’t understand their role or the level of liability they place on themselves and the companies. Hence in a way selling their resident status but totally do not add any value to you or your business.

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. In short, if you decide to hire a cheap resident director for your company it might end up being a big problem.

The Importance of Choosing an Experienced Singapore Resident Director

“With a proper understanding of the responsibilities of directors, you are doing a good thing for your company’s future.” said the local resident director 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 local resident director does not have to be a Singapore citizen or even a permanent resident. The person can also be an individual from any other country, as long as he/she can commit the time and resources necessary for this role.

The Benefits of Hiring a Resident Director:

  • Helps you avoid costly penalties
  • Better company compliance ratings among others
  • 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 business to deal more easily with authorities on tax matters related to issues – such as GST refunds which may arise during audit periods.

A big note to take is that the law does not significantly differentiate if a director is “active” or “sleeping”. This means that even though the resident director is not involved in day-to-day operations, she or he must make sure that the company fulfills its obligations on time.

Examples of such statutory obligations include :

  • – Filing annual audited financial statements by 18 March each year (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 legal operating of the business entity.

Headache isn’t it?

A company that is not in compliance with the 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 next 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.

How can I find a good resident director?

Given that the company secretary and resident director have to work closely on various matters, it would be wise to ask for referrals about experienced resident directors with whom your company’s secretary or auditor has worked with.

This means that the auditor or company secretary can get in touch with the resident director easily and help obtain their signature on documents, such as directors’ resolutions in writing, agreements, certified extracts, and any other official documents, which are needed for opening bank accounts or changing authorized signatories.

The company secretary or auditor needs to be able to contact the resident director as and when required. This is important so that they can sign and execute important documents, like financial reports, board resolutions promptly.

On the other hand, though there is no minimum cap on directorships that any resident director can hold, responsiveness is compromised due to the number of directorships. A resident director with a good relationship with your company secretary or auditor can be helpful.

What are the power and responsibilities of a resident director?

The powers of a director are governed by the company’s Constitution. This document contains specific clauses which can be modified to fit companies’ needs. Examples of these clauses include loans, mortgaging company assets, or granting power of attorney to corporations for the benefit of that particular corporation, voting rights and classes of shares, and so on.

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 the company’s board of directors. The Constitution would also make the terms and conditions for a directors’ 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 a resolution before it is deemed passed and therefore valid.

Resident Director

The benefit of having a resident director is that the director usually has a Singpass (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 important for companies that are constantly communicating 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 be one who not only advises but goes the extra mile and provides complimentary services which are both cost-effective and time-efficient for companies.

The role of the Nominee Director.

A nominee director is a person who is appointed by the company 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, then you need to go through this process again.

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 a resident director is not known to the company, there can be a potential for breach of trust.

There are real events whereby a resident director conducts unlawful acts behind the scene which totally blindsided the business and put the company in jeopardy. 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 of the business.

Such rulings can occur if the director decides to have free reign over the company’s resources.

When engaging a resident 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 he or she should liaise to obtain instructions.

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 director is appointed on time and the company will remain compliant under the Companies Act.

Additionally, by engaging a nominee director from a professional corporate secretarial firm or professional-managerial firm, the company can be assured that the nominee director has undergone a thorough vetting process.

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