In Singapore, dormant companies are defined according to the regulations imposed by the Company Law as businesses which have not completed any activities from which incomes have been generated during a specific financial period. However, the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority (IRAS), companies in Singapore are considered dormant under different circumstances. No matter the authority defining a Singapore dormant company, certain accounting requirements must be respected by their owners.
Below, our company formation specialists in Singapore explain what the annual filing requirements for dormant companies are. We remind foreign investors that our agents can also help them open a company in Singapore.
Dormant companies according to ACRA and IRS in Singapore
According to the IRAS, a dormant company is defined as a business which has not generated any income during a specific period of time (a financial year most of the times), however, it may have incurred expenses.
According to ACRA, a Singapore company must have no accounting transactions in order to be considered dormant, however, certain exceptions apply. Among these are:
- the appointment of a company secretary is not considered an accounting transaction according to ACRA;
- the appointment of an auditor is not an accounting transaction either under ACRA’s regulations;
- the maintenance of a legal address of a Singapore company is not considered an accounting transaction;
- the maintenance and bookkeeping of registries and books of the company are not considered accounting transactions;
- the payment of fees and/or penalties applied by ACRA are not considered accounting transactions;
- transactions related to the taking of shares by a new shareholder or subscriber under certain conditions are not considered accounting transactions.
You can rely on accounting services offered by our consultants, including if you own a dormant company in Singapore. We can help you file the annual returns for a dormant company in Singapore.
If you need help in company registration in Singapore, our advisors are at your disposal.
What are the annual filing requirements for Singapore dormant companies?
According to the Company Law, dormant companies must respect the annual filing requirements imposed by the IRAS and by ACRA. It must be noted that these requirements depend on the type of structure of the dormant company.
In order to file its annual returns, a dormant company in Singapore must hold the shareholders’ annual general meeting during which the stockholders must approve the financial documents presented by the management board.
Then, the companies must file their annual income tax return, with the exception of dormant companies which have been granted a waiver.
Singapore dormant companies which must file annual tax returns with the IRAS must prepare Form C-S or Form C.
Our Singapore company formation representatives can offer more information on how to file the annual returns of a dormant company. It is also important to note that these companies can file their returns in electronic format.
Income tax return waivers for dormant companies in Singapore
ACRA provides for waivers for income tax return filings for dormant companies in Singapore under the following conditions:
- – the company has filed Form C-S or Form C, its financial statements and tax computations until the date it has stopped operating;
- – the company does not own any investments or, if it does, it does not earn any income from these investments;
- – the Singapore company has de-registered from GST (if it was registered for GST in the first place);
- – the company does not intend to retake its commercial activities during the following two years.
A Singapore dormant company is exempt from preparing financial statements if it passes the substantial assets test, meaning its assets must have a value of no more than 500,000 SGD or if the company is dormant since it was registered or starting with the end of the previous financial year.
In the case of companies listed on the Singapore Stock Exchange, these must file annual tax returns with the IRAS and ACRA, however, they will be exempt from the audit requirements.
All dormant companies in Singapore must comply with a few more requirements, among which they must prepare their annual tax returns in accordance with the Singapore Financial Reporting Standards. They are also required to hold the annual general meetings and file the returns in the appropriate periods of time.
Our company formation in Singapore can offer more information on the annual filing requirements for dormant companies. If you want to open a company in Singapore and need assistance, please contact us.