Introduction of an inward Re-domiciliation Regime in Singapore

Press Release (ePRNews.com) - CENTRAL, Hong Kong - Jun 07, 2017 - One feature of companies incorporated in most offshore jurisdictions is the possibility of continuation or re-domiciliation of the company. This means, that a company can migrate from one jurisdiction to another and is deemed to be the same company in the new jurisdiction of choice. A continuation or re-domiciliation of a company does not require an asset-buyout and is therefore often a favoured procedure, where possible, avoiding the realisation of capital gains and reserves of the company.

Singapore introduced a new inward re-domiciliation regime in March 2017 as part of the Companies (Amendment) Act 2017, expected to come into effect within this year.

The legislation sets out the procedure for domiciliation of a foreign entity in Singapore through the transfer of its registration to the registrar of Singapore. The procedure is for the most part akin to the registration procedure of a subsidiary. However, the effect of the successful re-domiciliation in Singapore is that company conserves its history and can possibly defer further any tax reserves that may have been accumulated over the years. It is however to be noted, that the re-domiciliation is only possible for companies from jurisdictions that allow companies to be re-domiciled.

Why re-domicile a company to Singapore?

With increasing scrutiny of offshore jurisdictions and reputational implications, it may seem as a good option to “onshore” a company in Singapore instead. Singapore is a stable and well-reputed jurisdiction. The city-state in Asia offers an attractive low-tax regime and ample business opportunities in Singapore as well as a business hub in the region. However, the re-domiciliation regime is not open to just any company. It is expected that the eligibility for overseas companies is conditioned to minimum criteria, likely adopted from the small company definition in the Companies Act. In that case, in order to fulfil the minimum size requirement, a foreign entity must satisfy any two of the following criteria in the two financial years immediately preceding its application: –

·       The revenue of the company for each financial year exceeded SGD10 million;

·       The value of the company’s total assets at the end of each financial year exceeded SGD10 million; and

·       The company had at the end of each financial year more than 50 employees.

Effects of a successful re-domiciliation

Re-domiciliation does not affect the continuity of the company as a legal entity or its assets. It does not result in the creation of new entity but merely leads to the continuation of the company in Singapore. It does not effectively impair any claims, obligations, liabilities, rights, judgments or proceedings in favour or against the company or its members or officers or agents.

Post re-domiciliation, a foreign company will become a Singapore company and must comply with the Companies Act like any other Singapore company.

Singapore allows only inward re-domiciliation so it is a one-way road without an option to reverse the decision if the arrangement does not serve the original intent of the company.

For more information visit our website http://www.encorepro.com or contact us directly at info@encorepro.com

Source : Encore Professional Services Limited
SHARE :  
Business Info :

CATEGORIES : Accounting

Login

Or using ePRNews Account

Don't have an account ? Sign Up

Register New Account

Already have an account ? Login

Reset Password

Already have an account ? Login

DISCLAIMER

If you have any concerns regarding this press release, please contact the Author / Media Contact / Business of this press release. ePRNews is not resposible for the accuracy of the news posted and do not endorse, support any product/ services/ business mentioned and hereby disclaims any content contained in this press release.