The Singapore Companies Act introduced inward re-domiciliation to Singapore, which is meant to boost the local economy, and create a competitive business hub within Singapore. There are sets of requirements, as well as regulations that a foreign corporate entity must comply with, and registration is done via the Accounting and Corporate Regulatory Authority (ACRA).
What is Re-domiciliation?
Re-domiciliation to Singapore refers to the transfer of registration by a foreign corporate entity from their original jurisdiction to Singapore, effectively becoming a Singapore company. The company is legally considered a local company, and must comply with the rules and regulations in the Companies Act, like any other Singapore incorporated company.
Re-domiciliation is a way for foreign corporate bodies to incorporate as a Singapore company with minimal disruption to the company's day-to-day business operations, and branding. Re-domiciliation is an alternative to setting up a subsidiary office from its parent company, or a branch in Singapore without creating a new legal entity for the foreign company.
Is Your Business Eligible for Re-domiciliation to Singapore?
There is a set of requirements that must be fulfilled by any foreign corporate entity looking to register for re-domiciliation to Singapore. For one, the laws of the original jurisdiction of the foreign corporate entity must allow the outward transfer of registration to Singapore. These jurisdictions include Australia, New Zealand, and Delaware (USA).
Once the company is eligible to transfer, there are minimum requirements that must be met in order to proceed with the transfer of registration:
- The foreign corporate entity must meet at least two of the following size criteria:
- The foreign corporate entity's assets must be valued over SGD10 Million in total;
- The foreign corporate entity's yearly revenues must surpass SGD10 Million;
- The foreign corporate entity must have more than 50 full-time employees.
- The foreign corporate entity must meet all of the following solvency criteria:
- There is no basis that may determine the foreign corporate entity is unable to pay off its debts;
- The foreign corporate entity is able to pay off its debts as they are due within the first year after their application for a transfer of registration;
- If the foreign corporate entity intends to wind up (liquidate) within a year of requesting for a transfer of registration, the company must be able to pay its debts in full within the one-year time frame.
- Other criteria to fulfill include:
- The foreign corporate entity is able to transfer its incorporation from their original jurisdiction to Singapore (outward re-domiciliation);
- In connection to the transfer of registration, the foreign corporate body has met with the legal criteria of its place of incorporation;
- The application for the transfer of registration (re-domiciliation) is done in good faith;
- The application for the transfer of registration (re-domiciliation) is not intended to defraud existing creditors or shareholders in the foreign corporate entity;
- The foreign business entity's first financial year has ended at its place of incorporation as of the application date;
- Additional requirements, which include: the foreign corporate entity must not be in liquidation, be in the process of being wound up, or be under judicial management.
Reasons for Re-domiciliation
Why re-domicile to Singapore? There are multiple reasons why foreign corporate entities apply to re-domicile to Singapore. Re-domiciling to the Singapore jurisdiction provides various free trade agreements, stability, and lower taxes than other ASEAN nations. Other reasons why foreign entities may register for re-domiciliation include:
- Singapore Taxation Rates
Tax rates for Singapore companies are comparatively lower than tax rates of surrounding nations. Tax on corporate income is set at a flat rate of 17%, which may go lower depending on the nature of the business.
- Free Trade Agreements (FTA)
Singapore is one of Asia's leading business hubs with both regional and bilateral FTA. Only companies registered in Singapore may benefit from the various FTA, which is a major incentive for a foreign corporate entity register.
- Entry to Asia/ASEAN Market
Re-domiciliation to Singapore is one of the ways foreign companies can enter the Asian or ASEAN market without having to create a new legal entity. A foreign corporate entity transfers jurisdiction to Singapore, and effectively enters the Asian/ASEAN market without having to make major changes to their business structure.
How to Apply for Redomiciliation (Singapore): A Step-by-step Guide
Step 1: Check BizFile+
First, check BizFile+ for the list of company names currently registered to Singapore companies. Foreign corporate entities looking to re-domicile to Singapore must register under a unique company name that is not tied to another Singapore company.
Step 2: Fill Out the Form
To register for re-domiciliation to Singapore, the foreign company must fill out a hard copy of the Application for Transfer of Registration under Section 358(1) form, which will require the following details of the foreign entity:
- Name of company in its place of incorporation
- Date of company registration in its place of incorporation
- Place of incorporation
- Registered address of the company in its place of incorporation
- Date of last financial year-end of the company
- Proposed intended date of the first financial year end after re-domiciliation
- Proposed financial year period
- Registered address in Singapore
- Details of the company's directors and officers
- Share capital details
- Shareholder details
Once the form has been fully filled out, and is deemed truthful and correct, the company must submit the completed form as an attachment or PDF to BizFile+. Enter through their eServices portal, then head to General Lodgement. From there select Business Entity Related, then select the Type of Document to be submitted as Transfer of Registration.
Step 3: Submit the Required Documents
Besides the application form, foreign companies must submit supporting documents such as:
- A certified copy of the company's existing constitutional documents, in its place of incorporation;
- The constitution by which the foreign corporate entity proposes to be registered in Singapore, and it should not include details of subscribers and the number of shares taken by subscribers;
- A certified copy of the certificate of incorporation of the foreign corporate entity in its place of incorporation, or a similar document;
- Declaration of the secretary, director, or corporate services company that filed the application, if applicable;
Step 4: Pay the Application Fee
Re-domiciliation applications will incur a fee of SGD1,000, which is non-refundable. The application fee is payable to BizFile+.
Step 5: Wait for the Registrar's Approval
The final step is to wait for the registrar's approval, which may take up to 2 months from the date of application. The wait time includes the time required for another government agency to approve of the application, whenever applicable.
After a successful transfer of registration, the company may opt to become a private or public company limited by shares, depending on the limitations set by the Accounting and Corporate Regulatory Authority. The entity must comply with the Companies Act. Additionally:
- The company must register any existing charges within 30 days of re-domiciliation;
- The company must provide necessary documents detailing all persons registered as shareholders and stakeholders of existing shares within 60 days of re-domiciliation;
- The company must provide certified documents proving that the company has deregistered in its place of incorporation within 60 days of re-domiciliation to Singapore.
WealthBridge Corporate Services
Bureaucracy in Singapore is known to be efficient, but the processes and applications can be confusing to any foreign entity that is unfamiliar with the country's legal structure. WealthBridge offers corporate services for companies to ease these processes, and re-domicile their operations to Singapore.
Check out WealthBridge today, and see how we can help your company launch in one of Asia's biggest business markets!