Singapore's Inward Re-domiciliation Regime: A Guide for Foreign Corporations

Singapore's Inward Re-domiciliation Regime: A Guide for Foreign Corporations | Bestar

Singapore's Inward Re-domiciliation Regime: A Guide for Foreign Corporations

The Singapore Companies (Amendment) Act 2017 introduced the Inward Re-domiciliation Regime, allowing foreign corporations to transfer their registration to Singapore. This provides an attractive option for businesses looking to relocate their regional or worldwide headquarters to Singapore while retaining their corporate history and brand identity. The regime has been in effect since October 11, 2017.

Upon re-domiciliation, a foreign entity becomes a Singapore company and must comply with the local Companies Act. This process does not create a new legal entity or affect existing obligations, liabilities, or rights.

Key Requirements for Re-domiciling to Singapore

To be eligible for re-domiciliation, a foreign corporate entity must meet specific criteria, including:

• Size: Must meet at least two of the following:

  
  

  • Total assets exceed S$10 million.

  • Annual revenue exceeds S$10 million.

  • More than 50 employees.

    
    

• Solvency: The entity must be able to pay its debts and liabilities, both at the time of application and for at least 12 months afterward.

  
  

• Legal & Compliance:

  
  

  • Authorized to transfer incorporation under the law of its home country.

  • Complied with all home country requirements for the transfer.

    
    

• Good Faith: The application must be made in good faith and not to defraud creditors.

  
  

• Financial History: The foreign entity's first financial year at its place of incorporation must have passed.

  
  

• Operational Status: The company must not be under judicial management, liquidation, or being wound up.

Frequently Asked Questions (FAQ)

What is re-domiciliation?

Re-domiciliation is the process of a company transferring its corporate domicile from one country to another, while maintaining its legal continuity.

What types of entities can apply?

Foreign bodies corporate that can adapt to the Singapore companies limited by shares structure. All applications are subject to the Registrar's approval.

Can a foreign company keep its name?

Yes, but the company must first reserve its proposed name in Singapore, which is subject to standard name reservation rules.

What is the application fee and processing time?

The non-refundable application fee is S$1,000. The processing time can take up to two months, depending on whether referrals to other government agencies are required (e.g., Ministry of Education for private schools).

How do the size criteria apply to parents and subsidiaries?

• Parent Company: The size criteria are assessed on a consolidated basis to include subsidiaries.

• Subsidiary Company: The criteria apply on a single-entity basis. Alternatively, a subsidiary can meet the criteria if its Singapore-incorporated parent company meets them.

Effects of Re-domiciliation

After transferring registration, the company becomes a Singapore-incorporated entity and must comply with all Singapore laws. The process does not affect the company's identity, continuity, or legal proceedings.

Financial Reporting

Companies must prepare their first financial statements under the Singapore Companies Act. The first financial year-end (FYE) starts the day after the last FYE in its original jurisdiction. The first annual general meeting (AGM) must be held within four months (for listed companies) or six months (for non-listed companies) of the new FYE.

How Bestar can help

Singapore's Inward Re-domiciliation Regime: A Guide for Foreign Corporations

Re-domiciling a foreign corporate entity to Singapore is a complex process that involves legal, financial, and administrative requirements in both the home country and Singapore. Engaging a professional service provider—such as Bestar—can significantly streamline this process and ensure compliance.

Here is a breakdown of how Bestar can help with the inward re-domiciliation regime in Singapore:

1. Expert Guidance and Strategic Planning

• Eligibility Assessment: Bestar can conduct a thorough review of a company's financial and legal standing to determine if it meets the size and solvency criteria for re-domiciliation.

  
  

• Legal Feasibility: We can advise on whether the company's home jurisdiction allows for outward re-domiciliation, which is a fundamental prerequisite for the process. We can also navigate the specific legal requirements and documentation needed in the original country.

  
  

• Tax and Financial Implications: Bestar can provide a clear picture of the tax and stamp duty implications in both the original country and Singapore. This includes understanding Singapore's corporate tax regime and its extensive network of Double Tax Agreements (DTAs), which can offer significant tax advantages.

  
  

• Strategic Advisory: Bestar can help a company evaluate whether re-domiciliation is the right strategic move, or if alternative structures like a subsidiary, branch, or representative office would be more suitable for their business goals.

2. Document Preparation and Application Filing

• Liaison with Authorities: Bestar acts as a single point of contact, managing all communications with the Accounting and Corporate Regulatory Authority (ACRA) and other relevant government agencies.

  
  

• Document Preparation: We will assist in gathering and preparing all the necessary documents, including:

  
  

  • Certified copies of the company's constitution or charter from its original jurisdiction.

  • Drafting the new company constitution for registration in Singapore.

  • Preparing and filing the "Application for Transfer of Registration" form.

    
    

• Name Reservation: We can handle the process of reserving the proposed company name in Singapore, ensuring it meets all local naming rules and is available.

  
  

• Pre- and Post-Registration Compliance: Bestar ensures that all pre-existing charges are registered with ACRA within the stipulated timeframe and that the company is de-registered in its home country within 60 days of its Singapore registration.

3. Post-Re-domiciliation Compliance and Ongoing Support

Once a company has successfully re-domiciled to Singapore, it must comply with a new set of local regulations. This is where ongoing professional support becomes crucial.

• Appointment of a Company Secretary: The Singapore Companies Act mandates that every company must appoint a qualified company secretary who is a natural person residing in Singapore. Bestar can fulfill this role, ensuring the company meets its legal and administrative obligations.

  
  

• Corporate Secretarial Services: This includes:

  
  

  • Maintaining statutory registers and minute books.

  • Filing annual returns and financial statements with ACRA.

  • Handling changes to the company's officers, shareholders, or share capital.

  • Preparing for and documenting annual general meetings (AGMs).

    
    

• Accounting and Tax Services: Bestar can provide ongoing services for bookkeeping, preparing financial statements in compliance with Singapore's financial reporting standards, and filing corporate income tax returns with the Inland Revenue Authority of Singapore (IRAS).

  
  

In essence, Bestar serves as a one-stop-shop, offering expert advice, managing the entire re-domiciliation process from start to finish, and ensuring the company remains compliant with all Singapore laws and regulations. This allows business owners to focus on their core operations, knowing that the complex administrative and legal tasks are in the hands of experts.