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How to protect yourself from nominee director in 5 steps

By  law, any Singaporean company is required to have at least one local director (resident of Singapore) in staff. In connection with this,  foreigners when registering a company in  Singapore registering a company in Singapore, in  in most cases, they are forced to use the services of a nominee director.

Having to rely on an  unknown person from a faraway country scares a lot of people and it's understandable. Let's see how these fears are justified and what you need to do to protect yourself from possible misconduct on the part of the  local (nominee) director.

First, let's start with the fact that Singapore is a serious country with law-abiding citizens and a very low crime rate. Secondly, all actions on  companies are carried out exclusively on personal identifier of the resident and company (SingPass and CorPass) and their can be tracked instantly. Thirdly, you don't have to  give the right to sign on the bank account to your local director*. As for fines for unauthorized actions, they are severely punished by the Law with a prison term of up to 2 years and/or fines from 5,000 to 50,000 dollars SGD. 

According to  our many years of experience, in the absolute majority of cases it is not  to protect the client from the  nominal director, but  nominal director from the  client, because according to the Law on  In companies in  Singapore, the duties of a nominee director are the same as  the duties of an actual director and some not respectable companies take advantage of this.

If this didn't convince you, we have prepared a small guide specially for you on how to protect yourself from illegal actions of the local director in 5 steps:

  • Sign an agreement with the   director on the   rights and   obligations of a nominee director (Nominee Director Agreement), which   clearly defines the rights and   obligations of the parties, including the provision on   that # nbsp;he does not  has the right to manage and  dispose of the company.
  • Not give the nominee director the right to sign on the company's bank account*. 
  • Work only with  verified directors whom you know personally and for whom you can vouch
  • Work only through  reliable corporate providers who can guarantee your full legal protection.
  • Carry out a full background check on your prospective director, from which you can find out if   an important point that directly affects  your chances of  opening a bank account)

* — for verified directors, we recommend making limited access to the bank account (for example, in view mode or within within a certain small amount).# nbsp;

For what it needs:

  • Significantly increases your chances of  opening a bank account. 
  • If you need any help in resolving issues with the bank,
  • such as issuing/reissuing bank tokens, requesting bank statements
  • for  preparation of financial statements, resolving issues on  pending transactions,

making changes to data on the  company, such as for example, changing the address or change/adding directors and shareholders (and such needs arise with  enviable regularity), then  if your nominee director is not signer of the bank account, he will not be able to help you and you will have to either fly yourself or send the original documents by express mail, which# nbsp;involves for you large additional time and financial costs.