Harry Elias Partnership LLP Partner S Suressh was featured in an article by The Business Times titled “Nominee directors may seek higher fees under new laws, pinching corporate service providers’ margins”.
Commenting on the new regime, Suressh said it will largely affect the practice of corporate service providers whose business model includes the sourcing of individuals to act as resident directors for certain types of customers. This is specific to foreign clients with no connection to Singapore, as well as those who wish to conceal their involvement in the company. “The need for (nominee directors) to be fit and proper is going to shrink the pool of suitable Singapore individuals, and these individuals will be able to charge a premium.”
Suressh highlighted that there have been cases of individuals being recruited to act as nominee directors for as little as S$400 to S$500 a year. However, such individuals who are willing to accept “a relative pittance” will become “increasingly hard to find”.
On capping the number of nominee directorships one could hold, Suressh said a maximum number is, by its nature, “arbitrary”. “The issue is not the number of directorships held by an individual, but whether that individual can and is discharging his responsibilities as a director,” Suressh added.
Read in full here.