To further boost Singapore’s competitiveness as a business hub, an inward re-domiciliation regime will take effect from 11 October 2017, enabling foreign corporate entities to transfer their registration to Singapore.
Executive Summary;
The inward re-domiciliation framework was introduced under recent amendments to the Companies Act, enabling foreign corporate entities to transfer their registration to Singapore.
A foreign corporate entity that re-domiciles to Singapore will become a Singapore company and will be required to comply with the Companies Act like any of other Singapore incorporated company. Thus foreign companies are able to have a presence in Singapore without the need of having to set up a subsidiary, reducing operational disruption to the company.
The move is expected to boost Singapore’s competiveness as a business hub, by facilitating the transfer or the setting up of business in the city-state for foreigners.
Please refer to this webpage for more information on the Re-Domicile Procedure and FAQ’s;
Why re-domicile?
- Leverage on existing corporate branding and identity;
- More conducive business environment;
- Singapore has a stable political, business and legal infrastructure;
- Singapore has an English speaking and highly skilled workforce;
- Singapore has a competitive tax regime;
- Singapore is a hub for Asian businesses, providing proximity to nearby markets and suppliers;
- Singapore provides better access to capital markets and finances;
- Singapore possesses a strong Intellectual property regime.
Requirements;
The minimum requirements for transfer of registration are:
a) Size criteria – The foreign corporate entity must meet any 2 of the below
i. the value of the foreign corporate entity’s total assets exceeds S$10 million
ii. the annual revenue of the foreign corporate entity exceeds S$10 million
iii. the foreign corporate entity has more than 50 employees
b) Solvency criteria:
i. there is no ground on which the foreign corporate entity could be found to be unable to pay its debts;
ii. the foreign corporate entity is able to pay its debts as they fall due during the period of 12 months after the date of the application for transfer of registration;
iii. the foreign corporate entity is able to pay its debts in full within the period of 12 months after the date of winding up (if it intends to wind up within 12 months after applying for transfer of registration);
iv. the value of the foreign corporate entity’s assets is not less than the value of its liabilities (including contingent liabilities)
c) The foreign corporate entity is authorised to transfer its incorporation under the law of its place of incorporation;
d) The foreign corporate entity has complied with the requirements of the law of its place of incorporation in relation to the transfer of its incorporation;
e) The application for transfer of registration is —
i. not intended to defraud existing creditors of the foreign corporate entity; and
ii. made in good faith; and
f) There are other minimum requirements such as the foreign corporate entity is not undergoing judicial management, not in liquidation or being wound up etc.
Application for Transfer of Registration form under Section 358(1) of the Companies Act;
Important Considerations;
- The criteria for qualification is still evolving and would only become clear when the regime is fully implemented;
- The process for re-domiciliation will take approximately two months to complete;
- A foreign entity must verify if the original jurisdiction allows for such –re-domiciliation.
- A foreign entity must clearly evaluate the tax and legal implications of the re-domiciliation.
- Singapore allows only inward re-domiciliation so it is a one-way road without an option to reverse the decision.
- Presently, Australia, Canada, New Zealand and British Virgin Islands are some of the jurisdictions where a re-domiciliation regime is in existence.
Contact Us
If you need assistance, or would like to find out more about the inward re-domiciliation regime in Singapore, please contact undersigned who would be happy to assist.
