Is Resident Director Mandatory for Registering a Business in Singapore?

Singapore is a highly conducive marketplace for starting a new business. Like other jurisdictions, it also specifies the criterion for doing so. The would-be entrepreneurs, especially those who are new to Singapore, struggle with the question, "Is resident director mandatory for registering a business in Singapore?"

 

Yes, the business owners must provide at least one resident director to start a Singapore private limited company. It is one of the unavoidable requirements specified by the Singaporean Company Registrar. Incidentally, a government agency called Accounting and Corporate Regulatory Authority (ACRA) acts in this capacity.

 

Who Can be a Resident Director in Singapore?

A Singaporean citizen, Permanent Resident, or the holder of an Employee pass or Entrepreneur pass (Entrepass) can be the resident director of a company. A sole shareholder of the company can become its sole director. If the business owner fails to locate such a person, they have the alternative of hiring a nominee director service.

The business owners have to be careful about who they appoint as the director. As per the ACRA rules and provisions of the Companies Act of Singapore, the appointee,

 

  • Should be over the age of 18

  • Should be physically and mentally fit

  • Should not be an undischarged bankrupt

  • Should not have a criminal record involving fraud or dishonesty

  • Should not be the one disqualified by a court

  • Should not be the one convicted for three or more years under the Companies Act within a period of five years

 

Finding a Resident Director for Your Company

If you are a Singapore citizen or a permanent resident, you can incorporate a company easily. You can also be its directors and comply with the ACRA regulations. It is the same for the employee and entrepreneur pass holders.

 

Employee Pass Holder as Resident Directors

The employee pass holders can be the director of companies their pass is issued for. However, if they want to undertake a secondary directorship position in another company, they need to apply for and be granted a Letter of Consent (LOC).

 

Employee Pass for Foreign Entrepreneurs

Finding a resident director is not easy for some of the foreign entrepreneurs. Some of them face problems.

The workaround for the foreign business owners is to hire a nominee director services provider and form a company. The company's secretary then can initiate the process for employee pass for them by sending an application to the Ministry of Manpower. Once the application gets approved, they can relocate to Singapore, and replace the nominee director and be the director of their own company.

Some of the business owners choose to stay in their native country and direct their Singapore company. Their decision has tax implications as such a company is not considered tax-resident of Singapore. In addition, they have to keep on hiring the nominee director.

 

EntrePass for Foreign Entrepreneurs

Alternatively, the business owners can also opt and apply for an Entrepreneur pass. The following are the conditions for obtaining such a work pass:

 

  • If they have registered or intend to register a private limited company (Pte Ltd) with ACRA

  • If the company is already registered, it should not be older than 6 months on the date their Entrepass application

  • If they have not yet registered it, waiting for the outcome of Entrepass application is the best option for them

 

They also need to meet any of the innovative criteria presented below:

 

  • Has funding from a government-recognized VC or business angel

  • Is an incubatee at a government-recognized incubator/accelerator

  • Hold at least 30% of shares in the proposed business

  • Has a well-established business network and promising entrepreneurial track record

  • Holds intellectual property

  • Has a research collaboration with an IHL or research institute in Singapore

  • Has extraordinary achievements in key areas of expertise

  • Has a good investment track record

 

After getting the approval for your entrepass, you can go on and hire a Singapore company incorporation agent to register your company. You can also relocate to Singapore and assume the command of your company by being its resident director.

It is a busy time when you are trying to register your company in Singapore. It is also a time when you should understand the finer points of being the resident director of a company. It is a tough job, as you are fully responsible for the management and future course of your company.