Option 1: Private Limited Company + Employment Pass

This first option would mean that the foreign corporation incorporates a wholly-owned subsidiary company that is limited by shares and its employee would hold an Employment Pass, which is discussed in the next section of this article.

Option 2: Private Limited Company + EntrePass

This second option would mean that the foreign corporation incorporates a wholly-owned subsidiary that is limited by shares and the employee holds an Entre-Pass, which is discussed in detail in the next section of this article.

For both Options 1 and 2, it should be noted that a local resident director is still required for the incorporation process; hence, a nominee director may be engaged for the purpose of fulfilling this statutory requirement whilst the employee’s Employment Pass or EntrePass is in the process of being approved.

Option 3: Engaging a Resident Nominee Director

For foreign investors who wish to run their business from an overseas location without relocating any employees, one option is to engage a local resident director. This person may either be one of your local contacts whom you have established a relationship of mutual trust and understanding with, or a nominee director can be appointed. Typically, any corporate secretarial service provider would be able to provide you with contacts for a nominee director.

One essential thing to note is that the duties and responsibilities of a resident director are relatively onerous and the director will be held responsible if the company does fail in its statutory obligations, such as the late filing of its annual returns, or even the employees’ failure to make payment of taxes to the Inland Revenue Authority of Singapore (“IRAS”). Hence, many locals are often unwilling to undertake the role, due to the perception that being a resident director is not worth the trouble. Most local residents and nominee directors may require an advance deposit to safeguard against the risks that they may face, particularly if they are not directly involved in the day to day operations of the company.

A resident director should also fulfil the following requirements as stipulated under the Companies Act:

A natural person of sound mind over 18 years of age (i.e. corporations cannot be a director)

Is not an undischarged bankrupt by a Singapore Court or a foreign court

Is not an unfit director of an insolvent company

Is not a director of a company which was wound up on grounds of national security or interest

Has not been convicted of any offence involving fraud or dishonesty

Has not been convicted in Singapore of any offence in connection with the formation or management of a corporation

Has not been adjudged guilty of three or more offences within the last five years in relation to the requirements of the Companies Act

Is not subject to a disqualification order under section 34, 35, 36 of the Limited Liability Partnerships Act

It is essential to maintaining a good relationship with the resident director. It would be dangerous for the company if the resident director refuses to sign documentation, such as the company financial statements or the directors resolution in writing (“DIRW’), as these documents are vital for corporate transactions, such as opening a bank account, entering into agreements and etc. If the resident director chooses to resign, the company will have to appoint a new resident director before the previous one resigns to remain compliant under the Singapore Companies Act..