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New Audit Exemptions for Small Companies in Singapore

Written by: Bridgewest

New-audit-exemptions-for-small-companies-in-SingaporeAfter amending its Companies Law last year, Singapore has started to implement the new measures beginning with the second half of this year. One of the first amendments refers to audit exemptions for small companies in Singapore. The main reason the new term “small companies” was introduced is the creation of a more friendly business environment for foreign investors coming to Singapore. Our Singapore lawyers can provide you with complete information about the new Commercial Code.

Small companies to replace exempt private companies in Singapore

One of the first modifications in the new Companies Act refers to the replacement of the term “exempt private company” with “small company” with the purposes of audit exemptions. The new law applies to both newly incorporated companies and previously registered companies in Singapore.

Small companies differ from exempt private companies in order to allow a larger number of entities to qualify for audit exemptions in Singapore. Small companies must fulfill all the requirements below:

  • -          the entity is a private company throughout the whole financial year,
  • -          the annual revenue does not exceed 10 million SGD, or the value of the company’s total assets at the end of the financial year does not exceed 10 million SGD,  or it has no more than 50 employees.

Only under these requirements companies will no longer be required to submit audited accounts with the Singapore Accounting and Corporate Regulatory Authority.

Small groups under the new Singapore Commercial Law

The new Commercial Code also provides for audit exemptions for Singapore small companies members of a group. These companies will be exempt from audit requirements if the group itself qualifies as a small group. In order to be eligible as a small group two of the following criteria must be met:

  • -          the consolidated revenue of the group does not exceed 10 million SGD for 2 consecutive financial years,
  • -          the value of the consolidated total assets of the group does not exceed 10 million SGD at the end of the financial year,
  • -          the total number of employees of the entire Singapore group is maximum 50.

By adopting these new measures, Singapore’s audit-exemption regime is aligned with some of the largest jurisdictions in the world and also meet all international accounting standards. The new measures are meant to reduce the administrative costs imposed on companies.

If you want to open a small company and need assistance you can contact our law firm in Singapore.