Review of Section 366(2)(i) of Companies Act 196709 Nov 2022
Parliamentary Question by Mr Murali Pillai:
To ask the Deputy Prime Minister and Minister for Finance whether the Ministry will review section 366(2)(i) of the Companies Act 1967, under which foreign companies are not to be regarded as carrying on business in Singapore for the reason only that in Singapore it invests any of its funds or holds any property and therefore not subject to registration requirements under the same Act, to ensure that these companies are also subject to disclosure requirements pertaining to beneficial ownership and control as a safeguard against money laundering.
Parliamentary Reply by Deputy Prime Minister, and Minister For Finance Mr Lawrence Wong:
Under the Companies Act, a foreign company that carries on business in Singapore is required to be registered with ACRA and subject to various requirements under the Act, including but not limited to the disclosure of beneficial ownership information.
Section 366(2) of the Companies Act sets out a list of activities that, if undertaken by themselves, would not lead to the foreign company being regarded as carrying on business in Singapore. The list includes the investment of funds or the holding of property in Singapore. If the foreign company only engages in the activities on this list, it is not required to register with ACRA.
If the foreign company undertakes other actions with its funds or property that result in it carrying on business in Singapore, it must register with ACRA and be subject to the requirements under the Companies Act.
This is a calibrated approach to strike a balance between regulatory compliance and ease of doing business. In doing so, we have nonetheless ensured that there are other safeguards in place to deter money laundering and make information on ownership and control of foreign companies available to our law enforcement agencies.
For example, the beneficial ownership information of any entity that invests its funds or engages in property transactions, such as buying or selling real estate in Singapore, would be captured by relevant intermediaries. These include financial institutions and professionals (such as real estate agents and lawyers) when they establish business relations or undertake transactions for their customers. Law enforcement agencies in Singapore have the power to obtain information from these intermediaries.