Event driven changes

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Event driven changes

An Offshore Company is commonly set up in a tax haven like the British Virgin Islands (BVI), Marshall Islands, Seychelles Islands, etc., where there are no corporate or personal income taxes, capital gains taxes, reporting requirements.

Corporate planning and structuring have reached higher levels of complexity than ever, while the need for anonymity remains strong. Corporations must keep up to date and constantly look for new ways to make a profit. One way is to have a clear understanding of the characteristics of offshore foreign companies and how they can be used to your advantage.

Should you consider an offshore incorporation?

Offshore Companies are only benefical to if you do business overseas and not in the country where your offshore company was incorporated. All incomes derived in and from the incorporated country are normally taxable. For example, a company in the British Virgin Islands, doing business in the British Virgin Islands, will be required to pay taxes in the British Virgin Islands. However, if the business was done in the USA or Hong Kong, the profits are not taxable.

Benefits of an offshore company

Here are some benefits of an offshore entity:

  • Asset Protection
  • Confidentiality
  • Estate Planning

However, do keep in mind that these jurisdictions have also gained a negative reputation, especially after the “Panama Papers” expose, as many companies that are engaged in tax evasion or prohibited activities also tend to set up their companies in these countries due to the lack of oversight and compliance requirements. Thus, the authorities tend to scrutinize offshore entities more than regular entities.

How Bluebox can help?

We have been providing reliable and professional offshore incorporation services past 40 years and have helped our clients set up offshore companies in tax havens like the British Virgin Islands (BVI), Mauritius or Seychelles. Leave your offshore company incorporation concerns to rest and let our specialists to guide you throughout the incorporation process.

EXPLORE RELATED SERVICES

Incorporation

Whether you’re a foreigner or local who wishes to set up a company in Singapore, we have a friendly and knowledgeable team of Singapore Company Incorporation specialists who are able to advise you on how your business can benefit.

Registration of branch

A foreign parent business incorporated outside of Singapore has a branch office in Singapore. The goal of a Branch Office is to make it easier for the foreign parent firm to operate and generate money in Singapore.

Nominee Director

All Companies in Singapore are required to have at least 1 locally resident director. We can assist you in meeting this obligation by appointing one of our team members to function as your company’s nominee resident director on a temporary or annual basis.

Company administration is an important but often overlooked part of managing a company. Many events that happen in the lifetime of a company have to be properly recorded and filed otherwise risking the applicability of the change.

An entity faces a lot of changed in the ordinary course of business. The company sercretary’s role is to ensure that all these changes are document properly and effected pursant to the law, the constitution of the company or other agreements that the company might have entered into.

Examples of Event Driven Changes:

  • Bank Account Opening. Depending on your needs and objectives we can assist and advise you on opening corporate and personal bank accounts with any bank in Singapore.
  • Short Form Amalgamation. Amalgamations of parent with wholly owned subsidiaries.
  • Alteration of Share Capital Structure. Changes to classes of shares, denomination, currency, share-splits, bonus shares, etc.
  • Changes in Functional Currency. For accounting and presentation of financial statements.
  • Share Transfers. Changes to classes of shares, denomination, currency, share-splits, bonus shares, etc.
  • Share Allotments. For accounting and presentation of financial statements.
  • Changes to Company Officers. Changes to classes of shares, denomination, currency, share-splits, bonus shares, etc.
  • Changes to Particulars of Company Officers or Shareholders. These have to be updated with a stipulated timeframe.
  • Share Capital Reduction. Must be carried out pursuant to Section 78 of the Companies Act, Cap 50.
  • Share Buy Back. Must be carried out pursuant to Section 76 of the Companies Act, Cap 50.

More Details:

Bank Account Opening
Allotment of Shares
Transfer of Shares
Short Form Amalgamation
Share Buy Back

Bank Account Opening

Opening a bank account is a must and is often the first step after integrating your business. With AML and CTF regulations, Singapore banks have strengthened their customer due diligence process so that their bank accounts are only used for legitimate business activities.

Our team can help you open a corporate bank account in one of the many banks in Singapore, including “Neo Banks” and International Banks.

Documents required to open a company bank account in Singapore.

Generally, the following materials are required to open a company bank account in Singapore:

  • Resolutions of the company’s board of directors
  • A copy of the company registration certificate
  • A copy of the company’s business profile
  • A copy of the memorandum of association (MAA)
  • A copy of the Singapore national ID card or passport of all the company’s directors
  • The company Proof of residential address of directors and beneficial owners

Allotment of Shares

Allotment of shares, as defined by the Companies Act, is the process of generating and issuing shares to new or existing shareholders. The directors must first obtain agreement from current shareholders at a general meeting to begin the process or if prior authority is vested pursuant to Section 161 of the Companies Act, Cap 50.

Ordinary shares
Ordinary shareholders have equal voting and dividend rights based on their holdings. Ordinary shares, on the other hand, can be divided into alphabet shares, each with its own set of rights (e.g. Class A or Class B ordinary shares).

Shares with various rights
Shares having preferential dividend rights, a lack of or greater voting rights, redemption rights (e.g., the ability to sell back their shares to the business) or management rights are examples of shares with various rights (e.g. the right to appoint a board member)

Before issuing the shares, you may need to call an Extraordinary General Meeting to obtain shareholders approval. You must follow them if your company’s constitution specifies any specific processes that must be followed before the firm may issue shares.

Transfer of Shares

Companies must execute share transfer procedure with a maximum degree of care to avoid rendering the shares invalid or fraudulent. Transferring of share generally involves director’s resolution, the transferor and the transferee execution of the ACRA transfer of share forms. It also involves:

  • Paying stamp duty
  • Notice of transfer of shares
  • Filing of the list of shareholders with ACRA
  • Updating of the electronic register of members in case of a private company.

Procedure of Share Transfer

  • Execution of instrument of transfer
  • Making a transfer request to the board
  • Payment of stamp duty
  • Surrender of share certificate
  • Issuing a new certificate
  • Updating electronic register of members by ACRA

How Bluebox can Help?

Share transfer procedures usually come with statutory deadlines. For instance, if a company fails to make stamping of transfer on time, it could be levied penalties. With Bluebox’s help, you can rest assured that you are on track with share transfer deadlines and compliances. Bluebox can take care of all the steps of performing a share transfer while making sure ACRA and IRAS are accurately reported and updated on the procedure.

Short Form Amalgamation

The short form amalgamation process is appropriate for intra-group reorganisations and restructurings. Companies in a parent-subsidiary relationship can now amalgamate, with the subsidiary continuing as the merged business, according to recent modifications to the Act.
Amalgamation is the process of merging two or more corporations such that their assets, rights, privileges, liabilities, and obligations are transferred to and vest in a single amalgamated company.

Process involved in Short-Form Amalgamation

  1. Organizing a general meeting of each merging business to vote on the amalgamation;
  2. Providing written notice of the proposed merger to each amalgamating company’s secured creditors, if any, at least 21 days before the general meeting
  3. The board of directors of each amalgamating firm making statements and declarations of solvency in regard to the merged company, in accordance with legislative requirements, prior to the general meeting;
  4. At the general meeting, passing a special resolution to approve the merger, which must include specified terms.
  5. Submitting the essential merger documents and certain other compliance disclosures to ACRA, as well as paying the required fee

Key Considerations

Before starting the merger process, the merging organisations should think about how it would affect their various stakeholder groups, such as clients, suppliers, partners, employees, and shareholders. Following an assessment of the impact, the proposed merger should only be undertaken if it provides significant benefits and has a minimal negative impact that can be avoided by implementing particular actions.

The tax effects on the amalgamated firm should be considered, including whether it will increase or decrease its tax exposure, benefits from concessions and waivers, and other tax advantages and hazards.

Share Buy Back

Companies in Singapore often participate in share buy back to be able to return money to shareholders, consolidate company ownership, give investors exit, or save the company from takeover.

The Singapore Company Act states that a company will not be able to purchase or acquire shares issued by it unless the charter of the company permits it to. For some certain class of securities, there is also maximum buy back limit of 20% of total number of securities of that class. For anything more, the company will have to take court’s approval.

Benefits of Share Buy Back

There are a multitude of benefits of share buy back, including:

  • Share buy backs allow companies to compete on more equal terms in international financial markets
  • Companies with excess cash can efficiently manage the issue by returning excess funds to shareholders
  • May increase the market value of company’s shares
  • May promote a competitive price environment
  • Can help assist in resolving disputes with dissenting members
  • Allows company to flexible in setting or fine-tuning its capital structure

Bluebox. A World Class Corporate Services Team

Our advisors are very well versed in the proper steps and procedures to ensure any changes is carried out correctly without any lapses which could create major issues in the future. If you have been using the services of some other company secretary, we can also carry out a health check on the past records to identify any areas of concern to highlight to you and possibly carry out curative actions.


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