Last March, the Singapore Government amended the Singapore Companies Act 2017 which introduced an inward re-domicile (or relocation) regime in an effort to boost Singapore’s attractiveness as a business hub.
One of the key changes to the act was the introduction of a new framework that allows foreign companies and entities to transfer their registration from their original jurisdiction to Singapore, rather than setting up a new subsidiary company as per the previous legislation. Once re-domiciled, the foreign company will become a Singapore company registered under ACRA and as such will be required to report to and comply with requirements under the Singapore Companies Act.
There are many benefits for foreign holding companies to transfer their registration & not have to set up a new subsidiary, namely:
In order for a foreign entity to successfully apply for re-domiciliation, it must be a corporate entity that can adapt its legal structure to companies limited by shares under the Singapore Companies Act.
In order to qualify, the foreign company must meet any 2 of the following criteria:
The foreign company has to reserve its proposed name (which can be the name used in its original jurisdiction) but rules on name reservations will apply.
To apply for transfer of registration, a foreign company must submit an application together with all the necessary supporting documentation, specifically:
Once the application has been approved, the foreign company will be registered as a company limited by shares in Singapore.
There are a number of factors that need to be considered by foreign companies looking to re-domicile:
The company may not be able to be transferred to Singapore if the holding company’s jurisdiction of original registration does not have a re-domiciliation regime in place, or does not allow for outward re-domiciliation to another jurisdiction (for example, Hong Kong and the UK).
Jurisdictions which allow for outward re-domiciliation include:
Singapore does not currently allow for outward re-domiciliation so there would be no option to reverse the move if the company no longer wishes to be based in Singapore. Consequently, the foreign company should thoroughly consider the legal implications of re-domiciliation and its reasons for breaking into the Asian market.
It can take 2 months or longer from the date of first submission of all required documentation, to complete the registration of transferal. This includes any time that may be required for ACRA to refer the application to other agencies for review or approval (for example, any companies not regulated by governmental bodies other than ACRA).
Eltoma Corporate Services have Singapore based taxation and legal experts who can oversee the entire process of re-domiciliation and take care of all the requirements and implications that surround the new framework. Eltoma Singapore can lay the groundwork for a successful re-domiciliation application, for more information, contact us.