Re-domiciliation to Singapore for Foreign Corporate Entities

In response to the growing demand of foreign entities wishing to relocate their regional or worldwide headquarters to the city-state – in a bid to enjoy the advantages of company incorporation in Singapore – the Government has introduced an inward re-domiciliation regime, which took effect on October 11, 2017, with amendments to the Companies Act.

Earlier the options available to foreign corporate entities were registering a subsidiary, branch office or representative office. But now, these companies can apply to transfer their registration to Singapore (inward re-domiciliation).

What is re-domiciliation

Re-domiciliation is a process whereby a foreign corporate entity transfers its registration from its original jurisdiction to a new jurisdiction.

The procedure is for the most part akin to the registration procedure of a subsidiary but the key advantage of re-domiciliation is that the entity can conserve its corporate history and branding after it morphs into a Singapore entity.

Importantly, a foreign corporate entity that re-domiciles to Singapore will become a Singapore company and is required to comply with the Companies Act, just like any other Singapore-incorporated company.

Also, re-domiciliation to Singapore does not create a new legal entity. It does not affect the obligations, liabilities, properties or rights of the foreign corporate entity. Legal proceedings by or against the foreign corporate entity are not affected as well.

The key considerations when a foreign corporate entity decides to transfer its registration to Singapore, are tax and legal implications of the re-domiciliation.

As Singapore allows only inward re-domiciliation – which means this is a one-way road without an option to reverse the decision if the arrangement does not serve the original intent of the company – it is always a good idea to ensure that the shareholders of the company are fully aware and in agreement of company re-domiciliation.

Eligibility for re-domiciliation to Singapore

Do note that to be eligible for transfer of registration, foreign entities must be able to adapt their legal structure to the ‘companies limited by shares structure’, according to the provisions of the Singapore Companies Act. In addition, they must meet certain prescribed requirements and their application will be subject to the Registrar’s approval.

Also, while a foreign corporate entity can use its name that is used overseas, it must reserve its proposed name, and rules on name reservations would apply.

Singapore will only allow the transfer of registration if the foreign corporate entity is authorised to transfer its incorporation under the law of its place of incorporation. Moreover, it’s important that the entity has complied with the requirements of the law of its place of incorporation in relation to the transfer of its incorporation.

The Singapore Government will also note that the application for transfer of registration must not be intended to defraud existing creditors of the foreign corporate entity; and must be made in good faith.

There are other minimum requirements such as the foreign corporate entity not being under judicial management, not in liquidation or being wound up etc.

There are also detailed size and solvency criteria required for transfer of registration:

Size criteria

The foreign corporate entity must meet any two of the below:

• the value of the foreign corporate entity’s total assets exceeds S$10 million;
• the annual revenue of the foreign corporate entity exceeds S$10 million;
• the foreign corporate entity has more than 50 employees;

Notably, when the applicant is a parent company, the size criteria will be assessed on a consolidated basis (even if the subsidiaries are not applying to transfer their registration to Singapore).

Whereas if the applicant is a subsidiary, the size criteria applies on a single entity basis. Alternatively, a subsidiary meets the size criteria if the parent (Singapore-incorporated or registered in Singapore through a transfer of registration) meets the size criteria.

Parent and subsidiary may apply for transfer of registration at the same time. The subsidiary’s application will be assessed after the parent’s application is assessed.

Solvency criteria

• there is no ground on which the foreign corporate entity could be found to be unable to pay its debts;
• the foreign corporate entity is able to pay its debts as they fall due during the period of 12 months after the date of the application for transfer of registration;
• the foreign corporate entity is able to pay its debts in full within the period of 12 months after the date of winding up (if it intends to wind up within 12 months after applying for transfer of registration);
• the value of the foreign corporate entity’s assets is not less than the value of its liabilities (including contingent liabilities)

Fee and processing time for re-domiciliation to Singapore

To apply for transfer of registration to Singapore, a foreign corporate entity must complete the hard copy “Application for Transfer of Registration under Section 358(1)” form and email the completed application form with all the necessary documentation to ACRA_BFD_Application@acra.gov.sg.

The application fee is a non-refundable fee of $1,000, and it may take up to two months from the date of submission of all required documentation, to process the application for transfer of registration.

This includes the time required for referral to another government agency for approval or review. e.g. if the intention of the company is to carry out activities involving the setting up of a private school, the application will be referred to the Ministry of Education.

Sometimes, a foreign corporate entity cannot submit evidence that it has been de-registered in its place of incorporation within the prescribed time. In such cases, companies may submit an application to the Registrar for an extension of time by submitting the “Application for Extension of Time under Section 359(7)” form. The Registrar will consider all relevant circumstances before deciding whether to grant approval for an extension of time. There is a non-refundable application fee of $200.

All payments for applications either for transfer of registration, or for extension of time to submit document evidencing that the foreign corporate entity has been de-registered in its place of incorporation, can be made by cheque or Cashier’s Order issued by local banks in Singapore and made payable to “Accounting and Corporate Regulatory Authority” (ACRA).

Information and documents required for re-domiciliation to Singapore

While filling out the form for transfer of registration, the following information is required to be submitted:

• name of the foreign corporate entity in its place of incorporation and the date of registration in its place of incorporation
• place of incorporation of foreign corporate entity
• foreign corporate entity’s registered office address in its place of incorporation
• date of foreign corporate entity’s last financial year end
• foreign corporate entity’s registered office address in Singapore
• particulars of proposed company officers/ directors/ shareholders
• share capital details
• details of shareholders

Additionally, the following supporting documents need to be submitted along with the application:

• a certified copy of the charter, statute, constitution or memorandum or articles or other instrument constituting or defining its constitution (if any), in its place of incorporation;
• the constitution by which the foreign corporate entity proposes to be registered in Singapore;
• a certified copy of the certificate of incorporation of the foreign corporate entity in its place of incorporation; or a document of similar effect to the certificate of incorporation of the foreign corporate entity in its place of incorporation
• if the application is filed by a corporate service provider, a declaration titled “Declaration (Corporate Service Provider))” (in the application form) by the corporate service provider
• if application is filed by proposed director/secretary, a declaration titled “Declaration (Secretary)” (in the application form) by each proposed secretary of the company (if applicable)
• if application is filed by proposed director/secretary, a declaration titled “Declaration (Director)” (in the application form) by each proposed director of the company
• declaration titled “Declaration (Lodger)” (in the application form) by the lodger
• declaration in writing signed by all the directors or equivalent persons of the foreign corporate entity that the foreign corporate entity is a body corporate and meets the minimum requirements mentioned in regulation 7(1)(a) and (e) to (l) of the Companies (Transfer of Registration) Regulations 2017
• another declaration in writing signed by all the directors or equivalent persons of the foreign corporate entity that they have formed the opinion that the foreign corporate entity meets the minimum requirements mentioned in the Companies (Transfer of Registration) Regulations 2017; or that the foreign corporate entity satisfies regulation 7(5) in that it intends to make, upon registration as a company under the Companies Act

Post Transfer of Registration – What you need to know

The applicant will receive an email from ACRA on the outcome of the application. Upon approval of the application, the entity will be registered as a company limited by shares in Singapore.
Once the foreign corporate entity is registered as a company in Singapore, a document evidencing de registration of the foreign corporate entity in its place of incorporation must be submitted within 60 days after the date of registration.

Companies should also register their pre-existing charges with ACRA within 30 days after the date of registration. Companies should deliver new share/debenture certificates to their holders within 60 days after the date of registration.

Also note that share warrants issued before the date of registration are void. Additionally, if the foreign corporate entity was registered as a foreign company under the Companies Act before re-domiciliation, the foreign company registration will cease.

With this move, Singapore has joined Australia, Canada, New Zealand and the British Virgin Islands, as one of the few jurisdictions allowing re-domiciliation. It further boosts the city-state’s geographical and strategic location as Asia’s business hub, giving foreign entities greater flexibility in organizing their business structure with an eye on the Asian market. We however, do advise that companies evaluate the strategic and operational benefits before changing their domicile.