In Singapore, the Companies Act (Chapter 50) stipulates that all incorporated entities, particularly companies, must have at least one local director. This requirement has led to the emergence of the "nominee director" concept, which has proven beneficial for many foreign investors seeking to establish a permanent establishment and conduct business in Singapore.

However, individuals who agree to appoint a nominee director (ND) may often lack awareness or understanding of the following key points:

1. The nominee director is considered a "director" under the Companies Act and carries all the obligations and responsibilities associated with being a director.

2. The nominee director still owes statutory duties to the company and its members as outlined in the Companies Act.

3. The nominee director may be personally liable for certain liabilities arising from the company or its business activities.

4. The inclusion of an indemnity clause in the nominee director agreement does not absolve the director of their duties and obligations.

5. Even if an individual compromises their control by allowing others to influence their decisions, once officially appointed as a nominee director, they will be considered a director under the law.

Therefore, it is essential to familiarize oneself with these considerations before accepting a nominee director appointment, as it entails legal obligations and potential liabilities.