What is defined as local Singapore Director?
A Director in Singapore is a person who takes up Directorship positions in a Singapore Company, regardless of whether he or she is employed by the company or being assigned any job titles.
Being appointed as a Director, you are the fiduciary of the company that appoints you. A fiduciary is expected to act in the interests of another person and hence as a company’s director, you have the duty to act in the way you truly believe is in the best interest and benefit of the company.
In Singapore, whether private (aka private limited, or Pte Ltd) or listed companies, all companies are required to have at least (one) local director, whose normal place of residence is in Singapore. This director could either be a Singapore citizen, a Singapore permanent resident or an Entrepreneur Pass (EntrePass) or Employment Pass (EP) holder under the same company he is employed.
No of Directors required per company and the role of Nominee Director
Whilst a Singapore Company has to appoint a minimum of local director to begin with, the maximum number of director is usually stated in the company’s Constitution. In case your company elects to have one director only, then you would need to appoint a different individual to be the company’s secretary, as Singapore companies require at least two company officers
A Nominee Director is an individual who has been appointed to act in the capacity of the director for a company and represent the interests of the group or person appointing him. An excellent example of a nominee director is a case where you as a shareholder, or a group of shareholders, appoint a person to act on your behalf to sit on the company’s board.
In some cases, a foreign director and shareholder of a Singapore company may elect to appoint a local Nominee Director to incorporate his entity, arrange account opening matters, or attend to board meetings.
Do note however that a Nominee Director has the same fiduciary duties as that of a regular director as mentioned in the Company’s Act, including but not limited to duties to act honestly and in good faith, to avoid conflict of interest, to exercise care, skill and diligence and to not misuse powers and information.
Fiduciary Duties of a Director
Whether you are an “active”, “in-active”, “shadow”, or a “sleeping” director, you are an agent of the company appointing you. This means you act for the company and in turn, the company is bound by your acts. It is important that you fulfill the key duties owed by Directors to a company as stipulated in the common law and the Companies Act. The following summarizes four key duties: