Saturday, 23 March, 2019
CURRENCY RATES
EUR/USD1.14
EUR/RUR72.59
GBP/EUR1.15
1London20:25
2Zurich21:25
3Tel Aviv22:25
4Moscow23:25
Page specific SEO text here
Informative Articles

« All articles

 

2015.09.15 - Singapore: Amended legislation - The Companies (Amendment) Act 2014

 

Beginning from 1 July 2015, the Companies (Amendment) Act 2014 adopted by the Parliament of Singapore on 8 October 2014 and amending the main law - Singapore Companies Act (Chapter 50) is implemented.

This new rule is introduced with aim to ease the administrative requirements for registration and further operation of companies in Singapore. The legislative amendments under this Act will take effect in two phases: Phase 1 – on 1 July 2015, and Phase 2 – at the beginning of 2016.

Changes in the requirements for companies audits. In accordance with previous rules, the financial statements were exempted from the certification by an auditor if the company was an exempted private company (EPC), i.e. – an entity that meets both of the following conditions:

  1. the company’s shareholders are only individuals, and their number does not exceed 20,
  2. the turnover of the company for the financial period does not exceed SGD 5 million.

After the Companies (Amendment) Act 2014 takes effect, the audit requirements for the financial statements are no longer based on the “exempt private company” criterion, but on the “small company” criterion instead. A company will be treated as small, and accordingly - exempt from the requirement for certification of its financial statements by an auditor, if it is a private company within a particular financial period and meets at least two of the following three criteria for immediate two consecutive financial years:

  • - the company’s turnover does not exceed SGD 10,000,000;
  • - the company’s total assets as at the reporting date do not exceed SGD 10,000,000;
  • - the number of the company’s employees is less than 50.

In accordance with new legislation, there is no longer requirement that all shareholders are physical persons, to qualify the company for audit exemption.

If a company is part of a group and consolidated statements of the entire group are prepared, there is identical exemption from audit if the general criteria for the whole group do not exceed the above thresholds for immediate two consecutive financial years.

The above conditions apply to reports for financial periods beginning on and after 1 July 2015.

Important to note that such easier audit requirements do not exempt Singapore companies from the standard requirements for preparing and filing their financial statements.

Issue of shares. According to the newly implemented Section 68 of Singapore Companies Act, a company is entitled to issue shares without receiving any specific amount of remuneration for the shares issued.

Phase 2. Below are some of the proposed amendments to take effect under Phase 2, i.e. - in 2016:

  1. The Articles of Incorporation and Memorandum of Incorporation that are currently in place for Singapore companies, will be merged into a single document - Constitution.
  2. The Companies Register will be granted the right to debar a particular director or secretary of the company, if they have committed infringements (for example, provided late filing of the statutory documents with the Register, with a delay of more than 3 months).

A debarred director/secretary will not be able to be appointed to another position; however he/she will be able to continue in their current positions. The debarred status may be lifted, provided the director/secretary has corrected all of the relevant shortages.

This provision is aimed at restricting the activities of directors/secretaries who treat their obligations with insufficient responsibility, and at preventing them of holding the positions in other companies.

International Overseas Services comments:
Undoubtedly, cutting administrative costs for audit considerably increases competitiveness of Singapore companies in the international practice. Along with the other benefits of Singapore (i.e. -the favourable tax treatment, reliability and high reputation of the jurisdiction, state programs aimed at developing of international business), the adoption of the Companies Amendment Act 2014 confirms the status of Singapore as a significant jurisdiction for international tax planning.

Info Lines:
Moscow:+7-495-7219072
Kiev:+38-044-3617950
Almaty:+7-727-3495170
Tel Aviv:+972-37-382009
Mediterranean:+357-22-232258
Baltic:+370-62-308029
 
skype:IOS-Consult