Viewpoints from Kaizen

With effect from 31 March 2017, companies, foreign companies and LLPs (unless exempted) will be required to maintain beneficial ownership information in the form of a register of registrable controllers, and to make the information available to public agencies upon request. Setting up Newly incorporated companies and newly registered LLPs are required to keep register of registrable controllers within 30 days from date of incorporation. Existing companies and LLPs are required to keep register of controllers within 60 days from date of commencement of the regime (31 Mar 2017). Companies which are not required to keep registers of controllers at the date of commencement (31 Mar 2017) but is subsequently required to do so, are required to keep the registers within 60 days.   Maintaining Companies are required to enter information into their registers of registrable controllers within the prescribed timeline after the information has been received. The prescribed timeline […]

1. General There is no restriction on foreign ownership and there is no exchange control. 2. Business Entities Persons who are interested to carry on business in Singapore must register an entity, and the entities may be any of the following:- A sole-proprietorship and partnership A Limited liability partnership A company incorporated in Singapore A branch of foreign companies  Representative Office (1) Sole-proprietor and partnership All sole-proprietor or partnerships are registered under the Business Registration Act, Cap 32. A sole proprietorship only require 1 member whereas a partnership can take 2-20 members. The advantages of such businesses are that they are easy to form, maintain and dissolve. No annual return is required to be submitted to the Accounting and Corporate Regulatory Authority (ACRA) and the accounts are not subjected to audit. However, registrations have to be renewed annually. However, the disadvantage is that a sole proprietor is personally liable for […]

Withholding tax is a tax on payments made to non-residents including employees, business partners and overseas agents. Here is a quick overview of withholding tax and how it affects your business. A non-resident is liable to pay income tax on Singapore-sourced income. Under the law, a person has a legal obligation to withhold a percentage of the payment, when he makes payments of a specified nature under the Singapore Income Tax Act, to a non-resident. When you make payments of a specified nature to a non-resident, you must withhold a certain percentage of that payment as “withholding tax”. What Types Of Payments Are Subject To Withholding Tax?   Types of payment include: payment of commission fees to overseas agents payment of director’s fees to non-resident directors payment of professional fees to offshore accountants   Section 45, 45A, 45B & 45D Interest Royalties Management fees and service fees Rental from use […]

General Characteristics of a Branch Office If a foreign corporation does not want to incorporate a company in Singapore, it must first be registered as a branch in order to carry on business under the corporate title of the foreign corporation. Legally a branch of a foreign company is only an extension of its Head Office and not a subsidiary company which is owned by the foreign parent company. The shareholders, structure of company and its activities are directed by foreign company’s Memorandum and Articles of Association (MAA). There is no separate MAA for the branch office. A branch is not a separate legal entity in that its debts and liabilities are part and parcel of the debts and liabilities of the head office of the foreign corporation and its activities are limited to those stipulated in the constitution of the head office. A claimant can approach the Singapore courts […]

Introduction In 2003, the Companies Act (the Act) was amended allowing exempt private companies to be exempted from audit. Exempt private companies whose accounting year commencing from 15 May 2003 and with an annual revenue of $2.5 million (S$5 million from 1 June 2004) or below, no audit need to be carried out as the company is eligible for audit exemption.   Exempted Private Company A company is deemed to be an exempt private company if: The shareholders do not exceed 20 All the shareholders are natural person and not corporations   Unaudited Financial Statements Companies are still required to maintain proper accounting records, prepare and present financial statements in compliance with the Act and the Singapore Financial Reporting Standards (FRS). In short you are required to prepare directors’ report, balance sheet, profit and loss account, statement of changes in equity, cash flow statement and notes to financial statements. Everything […]

General Characteristics A partnership is a legal relationship between two or more persons who carry on a business with the objective of making profit and sharing it between them. As a partnership is not an entity in law, it cannot sue or be sued in its own name and it cannot own property. Partners are personally liable for all debts and obligations and personal assets are at risks. A minimum of two owners to a maximum of 20 owners can be either natural persons, companies or natural persons and companies. While registration with ACRA must be renewed annually there is no need to audit accounts or file annual returns with ACRA.   Registration First, an application for approval and reservation of Partnership name has to be filed with the Registrar. Upon approval a partnership is required to be registered online via BizFile with ACRA through a professional business registration firm […]

Introduction A foreign company can register a representative office with the International Enterprise Singapore (“IE Singapore”, formerly the Singapore Trade Development Board) if its activities in Singapore are mainly confined to auxiliary or support services such as liaison services, dissemination of market information or promotional activities to the head office, related and/or associated companies. A representative office is not recognized as a legal entity under the Companies Act of Singapore. It is not permitted to carry on any trade or business in Singapore nor to sign any contracts or to open any letters of credit directly or indirectly on behalf of its head office. Restrictions on Applications Under IE Singapore’s guidelines, only companies in the manufacturing, trading, trade logistics and services sector can register representative offices in Singapore. Other business sectors like banking, finance and insurance, education, travel agency, consultancy and management services, legal, real estate and property development do […]

1. Introduction Section 344 of the Singapore Companies Act, Cap. 50 (the “Act”) empowers the Registrar of Companies to strike a company off the Register if the Registrar has reasonable cause to believe that a company is not carrying on business and the company is able to satisfy the criteria for striking off. Companies which have ceased trading can apply for striking off provided they are able to meet the criteria for striking off. 2. Striking off Criteria (1) The company must have ceased trading or not commenced business from the date of incorporation. (2) The company must not have any outstanding tax liabilities with IRAS. ACRA does not require the company to produce a tax clearance letter from IRAS. Please refer to IRAS website at www.iras.gov.sg for a checklist on things to do before applying for striking-off. (3) The company must not be indebted to any other government agency. […]

1. A subsidiary company or a branch office There are two ways in which a foreign company may carry on business in Singapore. The first is by registering a branch office and the second is by incorporating a limited liability company in Singapore. We set out below, for the general interest of our potential clients, the relevant issues to be considered in deciding whether to register a branch office or to incorporate a subsidiary of the Company in Singapore. (a) Incorporation/Registration requirements Only one subscriber share needs to be issued on incorporation of a company in Singapore. Bearer shares are not permitted. Subscriber shares are commonly issued at par value at S$1.00 each. As such, the issued share capital of a Singapore private company may be only S$1.00. There is no minimum issued share capital requirement except for the initial one subscription share. There must be at least one subscriber […]

Unless otherwise indicated, the Singapore company mentioned anywhere in this article refers to a private company limited by shares incorporated in accordance with the Singapore Companies Act. Summary Share transfer refers to the act where a person sells or gives his shares in a company to another person. If a person sells all his shareholding, he will not be the shareholder any longer and the buyer will become the shareholder of that company after the transfer. Shareholders of a Singapore company are free to transfer shares with other shareholders subject to any restrictions by the company constitution. Furthermore, company directors will have the right to refuse the transfer of shares from one shareholder to another. The reason for refusal must be for the wellbeing of the company. The share transfer generally involves directors’ resolution, the transferor (seller) and transferee (buyer), execution of the ACRA transfer of shares form. It also […]