Singapore is a global business hub for investors from all around the globe. For companies established in Singapore, it is mandatory to assign a director who is a resident citizen of the country under the Companies Act. Under any circumstances, if a company does not have a residential director, then they can hire a nominee director.
A director hired by a foreign company for a contractual fee is called a Nominee Director (ND). A Nominee Director should be a permanent resident of Singapore and must have a local permanent address. The Nominee Director does not play any role in supporting the company. He is hired only to meet the legal requirements of the Singaporean government.
Why Foreign Companies Need a Nominee Director?
A Nominee Director is mandatory in foreign companies in case there is no residential director available with the company. The government of Singapore requires a person whom they can question if the company breaks laws and regulations related to the business.
Without the designation of ND, a company may fraud its customers, avoid paying tax, violate laws, and later may even abandon the customers by running away. To resist such situations, the act imposed by the Singaporean government ensures that a foreign company has someone who can be responsible for the business affairs. The Companies Act and its common law impose the same obligations on the ND as that on a regular director.
For more information about hiring Nominee directors, see Nominee Directors services Singapore.
Risk Associated with Nominee Services
A foreign Company cannot establish its business without a residential or a nominee director. There are several risks associated with the designation of a nominee director. Though the power of ND is limited to some extent, they are liable to be prosecuted.
If a company breaches the law, the nominee is at the hook of Singapore’s judicial authorities. The foreign owner of the company can be absconded in such cases to the full extent with the director. The laws of Singapore are simple, but the government strictly ensures that rules and regulations laid by them are strictly followed by the people associated.
A leading Corporate Secretarial Service in Singapore offers Corporate secretarial service along with Nominee director services. They provide trusted employees and they ensure to pay attention to the details associated with the company. Their service reduces stress on the owner by appointing qualified candidates within six months of incorporation. They are known for their professional consulting agents and leading services and are further determined to provide the highest customer satisfaction.