Enhancement of Singapore as a regional hub.
In a public consultation exercise that ran from 26 October to 16 November 2016, the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (ACRA) sought public feedback on the proposed introduction of an inward re-domiciliation regime in Singapore (the Proposed Regime). The Proposed Regime will allow a foreign-incorporated entity (Foreign Entity) to transfer its registration from its original jurisdiction to Singapore, while preserving its identity and history. Currently, re-domiciliation regimes may be found in jurisdictions such as Australia, Canada, and New Zealand.
A company may want to seek re-domiciliation for a variety of reasons, the most common being that the new host jurisdiction offers a preferable tax or regulatory environment. Alternatively, a company may wish to obtain financial or fiscal benefits and improved access to financial and capital markets associated with the new host jurisdiction.
Notably, the Foreign Entity must be able to adapt its original legal structure to constitute a company limited by shares under Singapore laws if it wishes to obtain re-domiciliation to Singapore.
The foremost requirement is that the Foreign Entity must be of a certain minimum size. The proposed approach is to use the criteria for “small company” and “small group” in the Thirteenth Schedule of the Singapore Companies Act (Cap. 50). At the company level, the criterion is that a company is a small company if it is a private company throughout the relevant financial year and satisfies any two of the following criteria:
The other proposed requirements for transfer of registration to effect re-domiciliation are, among other things, the following:
The Registrar has the discretion to register or not register the Foreign Entity or to impose other conditions.
A Foreign Entity that successfully re-domiciles to Singapore will become a Singapore company and must comply with the requirements of the Singapore Companies Act.
Re-domiciliation will not
After the transfer of registration, the re-domiciled Foreign Entity must
Through these updates to the Singapore regulatory framework for corporations, MOF and ACRA thus seek to ensure that Singapore’s corporate regulatory regime remains internationally competitive and robust by offering foreign companies the opportunity to seek re-domiciliation to Singapore in appropriate cases.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Kim Seng Lo