Singapore seeks transparency on control and ownership

With effect from 31 March 2017, Singapore-incorporated companies, foreign companies registered in Singapore and limited liability partnerships (LLPs) are required to maintain a new register of controllers and Singapore-incorporated companies are required to maintain a new register of nominee directors.

These amendments to Singapore’s corporate regulatory regime seek to enhance the transparency of the control and ownership of business entities in Singapore, reducing opportunities for the misuse of corporate entities for illicit purposes. Additionally, the amendments ensure that Singapore’s business transparency is aligned with international standards established by inter-governmental organizations, such as the Financial Action Task Force (FATF) and the Global Forum on Transparency and Exchange of Information for Tax Purposes.

REGISTER OF CONTROLLERS

For a company, a controller refers to any individual or entity that owns a “significant interest” in or “significant control” of the company.

For a company with share capital, an individual or legal entity has significant interest in the company if that person:

1. Has an interest (directly or indirectly)in more than 25% of the shares in the company; or
2. Holds shares with more than 25% of the total voting power in the company.

For a company without share capital, an individual or legal entity has significant interest in the company if that person has, directly or indirectly, a right to share in more than 25% of the capital or profits of the company. An individual or legal entity has significant control in a company if that person:

1. Holds the right, directly or indirectly, to appoint or remove directors holding a majority of the voting rights at directors’ meetings of the company;
2. Holds, directly or indirectly, more than 25% of the rights to vote on matters that are to be decided upon by the vote of the members of the company; or
3. Has the right to exercise significant influence or control over the company.

Ronnie Tan is managing director of Central Chambers Law Corporation. Wong Ying-chung, an associate at the practice, also contributed to this article