Companies in Singapore Must Now Maintain Register of Nominee Shareholders and Nominators
Singaporean and foreign companies are now obligated to maintain a non-public register of nominee shareholders and their nominators. Further, companies in Singapore that are unable to identify a registerable controller who has significant control over the company are obligated to identify such individuals.
Businesses will have until December 5, 2022, to meet these requirements.
The changes were brought under the Corporate Registers (Miscellaneous Amendments) Act, which aims to make it difficult for illicit actors to engage in actions that abuse the financial system, such as fraud and money laundering.
Singaporean and foreign companies registered in Singapore are now obligated to maintain a register of nominee shareholders and their nominators. Further, Singapore companies, foreign companies, or Singapore limited liability partnerships (LLPs) who have no registrable controller or are unable to identify the controller are required to identify individual(s) with executive control as their registrable controller.
Businesses will have until December 5, 2022, to meet the mentioned requirements.
The changes were set out under the Corporate Registers (Miscellaneous Amendments) Act, which was approved in January 2022. The Act amended the Corporate Registers (Miscellaneous Amendments) Act. Through these changes, Singapore aims to reaffirm its commitment to combat money laundering and other threats that threatens the integrity of the country’s financial sector.
Mandatory requirement to keep a register of nominee shareholders and their nominators
Local and foreign companies must maintain a non-public register of their nominee shareholders and their nominators at their registered office.
Before, businesses were not required to ascertain whether a shareholder was holding the shares on behalf of another person (nominator). Under the changes, nominee shareholders must inform the company of their nominee status within 60 days after October 4, 2022. Those appointed as nominee shareholders after October 4, 2022, must notify the company within 30 days of becoming a nominee shareholder.The company or foreign company must update its non-public register within seven days after receiving information from a nominee shareholder or a nominator in their company. This new requirement aims to minimize the risk of companies in Singapore being controlled by illicit actors.
A nominee shareholder is defined as:
- A person or limited company that is registered as a holder of the shares in a company on behalf of another person or company; and
- Receives dividends in respect of the shares that they hold as a representative of another person or company.
Nominee shareholders must also notify the company if they cease to become a nominee shareholder within 30 days of cessation.
Non-compliance with these requirements is punishable with a fine of up to S$5,000 (US$3,578).
Identification of individuals as registerable controllers
Another amendment under the act is the requirement for local and foreign companies and LLPs to identify registrable controllers.
Registrable controllers are individuals, such as chief executive officers, directors, partners, or even entities, that exercise executive control over the daily affairs of the company or LLP. There was no previous requirement for the company or LLP to maintain a register if they do (or are unable to identify) such individuals or entities.The company or LLP must now identify all individuals or entities that have executive control and record them as the registerable controllers of the company or LLP. The amendments are aimed at improving the transparency of companies and LLPs that are established in Singapore. Non-compliance with these requirements is also punishable with a fine of up to S$5,000 (US$3,578). Every officer who is in default is also liable to the same amount.
LLPs and foreign companies have two business days to update any change of registerable controllers to the Accounting and Corporate Regulatory Authority (ACRA).
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