When Sir James Dyson, the British billionaire inventor, announced he was moving the headquarters of his vacuum cleaner to electric car technology company to Singapore in January, he became the highest profile foreign company to take advantage of Singapore’s new inward re-domiciliation regime.
Dyson’s stated motivation to switch legal residence to Singapore was for “commercial reasons” and “future-proofing” the business, although other factors, such as Singapore’s free trade agreement (FTA) with the EU, may also have played a part.
Singapore’s inward re-domiciliation regime was introduced by the Companies (Amendment) Act 2017 and took effect from 11 October 2017. It was intended to boost Singapore’s competitiveness as a business hub, by facilitating the transfer or the setting-up of business in the city-state for foreigners.
To qualify for the new regime, a foreign company must either have revenue of more than S$10 million annually or total assets greater than S$10 million at the end of each financial year. It must also have more than 50 employees at the end of each financial year.
A foreign corporate entity that re-domiciles to Singapore will become a Singapore company and will be required to comply with the Companies Act like any other Singapore-incorporated company.
Re-domiciliation enables a company to preserve its corporate history and branding, while taking advantage of Singapore’s political stability, stable legal structure and highly skilled workforce.
It also offers greater flexibility at a time when many corporate groups are being reorganised to comply with new global initiatives on tax transparency and Base Erosion and Profit Shifting (BEPS), which have seen over 100 countries and jurisdictions collaborating to implement measures to tackle tax avoidance strategies by multinational companies.
Redomiciliation to Singapore will be attractive to companies that need to consolidate activities within a single jurisdiction where they can easily demonstrate real economic substance and also take advantage of Singapore’s network of double tax treaties and free trade agreements.
It will also be attractive for companies seeking a foothold for expansion into South East Asia or that wish to take advantage of Singapore’s capital markets as well as the range of financial and fiscal incentives offered by Singapore.
Sovereign Management Services is able to assist with the redomiciliation process. We have in-house expertise that can support clients with redomiciliation and take care of all the applicable compliance requirements in Singapore, including the provision of a resident director, company secretary, registered office, and fulfilling the accounting and tax compliance requirements of the company.
For further information, please contact us on +65 6222 3209 or by email to sg@SovereignGroup.com