The Singapore Companies Act underwent a major revision with the introduction of an inward re-domiciliation regime in Singapore. This regime allows foreign corporate entities to transfer their registration to Singapore, which is intended to increase Singapore’s competitiveness as a global commercial hub. The regime took effect on 11 October 2017. The inward re-domiciliation regime facilitates the relocation of a foreign corporate entity’s regional or worldwide headquarters to Singapore.

The Companies (Amendment) Act 2017 introduced this regime, which essentially allows a foreign corporate entity to transfer its registration to Singapore without having to wind up its operations in its home jurisdiction. The process of re-domiciling to Singapore involves transferring the registration of a foreign corporate entity from its original jurisdiction to Singapore

ELIGIBLE FOR RE-DOMICILIATION TO SINGAPORE

According to the provisions of the Singapore Companies Act, foreign businesses must be able to modify their legal structure to the “companies limited by shares structure” to be eligible for transfer of registration.

Only foreign corporate entities that are permitted to transfer their incorporation under the laws of their place of incorporation are permitted to transfer their registration. With respect to the transfer of its incorporation, it is also crucial that the entity has met with the legal requirements of its place of formation. The application for a transfer of registration must be made in good faith and without the intent to deceive the foreign business entity’s current creditors.

In addition, the foreign corporate entity must not be in liquidation, be in the process of being wound up or be under judicial management.

For the transfer of registration, specific size and solvency requirements must be satisfied.

• the total assets of the foreign corporate entity are worth more than $10 million.
• the annual income of the foreign corporate entity is more than $10 million.
• And there are more than 50 workers working for the foreign corporate entity.

BENEFITS OF RE-DOMICILIATION IN SINGAPORE

When a corporation decides to relocate its legal registration from its original jurisdiction to another country, it can achieve this through the process of re-domiciliation. Importantly, during this transition, the corporation retains its existing corporate branding and historical identity.

BENEFITING FROM A MORE FAVOURABLE BUSINESS ENVIRONMENT

In some instances, businesses opt to re-domicile away from their original jurisdiction, with Singapore serving as an attractive alternative due to its more favourable tax and regulatory environment. Singapore offers numerous financial and tax incentives, improved access to robust financial and capital markets, and the advantage of being closer to shareholders or operating bases.

STRATEGIC GEOGRAPHICAL LOCATION

Singapore boasts a strategic geographical location at the heart of Southeast Asia, granting businesses access to the rapidly expanding markets in this region. Furthermore, Singapore’s robust transportation infrastructure, including one of the world’s busiest ports, enhances its appeal as a prime location for businesses seeking optimal connectivity and growth opportunities.

DOCUMENTS REQUIRED

Submission of notice of intent to transfer: The initial step involves filing a Notice of Intention to Transfer with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore. This notice must encompass particulars about the company’s current jurisdiction and the proposed date for the re-domiciliation.

Board and shareholder resolutions: Approval for the re-domiciliation to Singapore must be obtained through resolutions passed by the company’s board of directors and shareholders. The board resolution should elucidate the reasons behind the transfer and specify the intended transfer date. The shareholder resolution should delineate the number of favourable votes for the transfer and any opposing votes.

Review and potentially amend the constitution: The company’s constitution, a legal document outlining its operational rules and regulations, may need adjustments if it does not align with Singapore’s legal requisites. Amendments might be necessary before proceeding with the re-domiciliation.

Certificate of good standing: To affirm its good standing, adherence to relevant laws, and authorization to conduct business, the company must procure a Certificate of Good Standing from the appropriate authorities in its current jurisdiction.

Submission of financial statements: Furnishing financial statements compliant with either the International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) for the preceding three years is mandatory.

Auditor’s report: An auditor’s report, covering the financial statements for the preceding three years, must be provided.

Statement of solvency: A statement of solvency is required, confirming the company’s ability to meet its financial obligations for a period of 12 months following the re-domiciliation.

Director’s consent: Every prospective director of the re-domiciled company must furnish written consent to serve as a director in Singapore.

Registered office address: A registered office address in Singapore, designated for official correspondence, must be provided.