In order to ensure that the regulatory regime of Singapore continues to be robust, relevant and in line with international norms, on the 30th of March 2017, the Companies (Amendment) Act 2017 of Singapore was gazetted. Among the number of amendments to the Companies Act, the provisions for the inward re-domiliation regime are arguably the most important in further boosting Singapore’s character as a business hub.
Simply said, based on its provisions taking effect as from the 11th of October 2017, Foreign Corporate Entities (FCE) are able to transfer their registration to Singapore where they will be able to incorporate while being subject to several conditions and requirements.This is ideal for any FCE that wishes to relocate their regional and worldwide headquarters to Singapore while retaining their corporate history and branding. Importantly, however, upon registration under the Accounting and Corporate Regulatory Authority (ACRA), the re-domiciled company will become a Singapore company that needs to comply with the Companies Act, like all the other Singaporean companies.
In the end, no new legal entity is created nor prejudice or effect is welcomed on the identity of the body corporate constituted by the foreign entity or its continuity as a body corporate. Also, the process discussed below does not affect the obligations, liabilities, property rights or proceedings of the foreign corporate entity; nor any legal proceedings by or against the FCE.
Generally speaking, the provisions of the inward re-domiciliation regime sets out the procedure of registration for transfer of an FCE to Singapore, which is similar to the setting up of a subsidiary in Singapore, under Companies Act. The initial step is to apply to reserve the name of the company, and comply with the registration requirements which include the submission of certain specified documents. Specifically, the applicant must have the following:
In addition to that, a very important aspect of the process includes the obligation of the FCE to submit evidence that it has been deregistered in its place of incorporation, within the prescribed time (60 days). Importantly, where the FCE needs more time to perform the above, it may apply to the Registrar for an extension of the timeline, in which case all the relevant circumstances will be considered and shape the decision on the matter.
Finally, in order to complete the registration process, the FCE must take the following steps:
Importantly, it must be mentioned that the Registrar has the power to refuse or revoke the registration of an FCE, where one of the above-mentioned requirements and/or process steps is not followed or met. The aggrieved person, however, may lodge an appeal to the MOF, within 30 days of the date of the decision.
The minimum requirements that the companies considering re-domiciliation must meet, can be grouped under size criteria and solvency criteria, together with other general requirements. Briefly, according to the provisions,
In addition to the above, the following general requirements should be considered:
By definition, the process of re-domiciliation includes the transferring of a company’s registration from its home jurisdiction, to another jurisdiction, usually one with a more conducive business environment, giving leverage on the existing branding and identity of the corporation re-domiciliating. Usually, the chosen jurisdiction offers a promising, more conductive tax or regulatory environment, with available financial or fiscal incentives, improved access to financial and capital markets or simply be closer to their shareholders or operational base. Also, the company going down the road of re-domiciliation is very likely to look at the opportunity to maximise its operational disruptions, without losing its corporate identity, history, and branding.
Considering all the above, there is no doubt that the new inward re-domiciliation regime in Singapore, together with the stable political, business and legal infrastructure currently in place, and the English-speaking and highly skilled workforce; will make the Singaporean jurisdiction extremely very attractive for companies considering re-domiciliation. In reality, however, any FCE considering to re-domiciliate in Singapore, must have a defined goal to do so, because once it becomes a Singaporean company, it is not allowed for outward re-domiciliation to another jurisdiction. Finally, all the legal process and requirements, as well as tax and stamp duty implications, that is set within the inward re-domiciliation regime, should be given considerable attention by the FCE.