All You Need to Know About Dormant Companies in Singapore

In Singapore, you can put your company into a dormant status to make it exempt from certain compliance requirements. The concept of dormant companies is quite common in the country, and it is relatively easy to apply for one. The purpose of this article is to give you information about the obligations of dormant companies in the city-state. 

What is a dormant company in Singapore?

A dormant company is a company that is temporarily suspended. However, being inactive does not mean that the company has completely stopped running its business activities. Inactive companies in Singapore still have a simplified set of compliance requirements to follow. However, they can qualify for exemptions to certain conditions.

There are several reasons why business owners go for dormant status once in a while:

• For maintenance purposes;
• Unable to run the business but have no intention of closing the company; or
• To maintain company status to preserve specific licenses.

Going dormant can save you tons of resources and time to invest more in developing sound business plans for the future. Moreover, it can help you protect your company’s brand name, reputation, valuable assets, and intellectual property.

In Singapore, both the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS) are involved in granting dormant status for companies. The first authority is responsible for registering all companies and businesses in Singapore, while the latter is responsible for all tax matters in the country. 

The two authorities have different ways of defining dormant companies in Singapore. Therefore, it’s likely that your company may qualify for the dormant status under ACRA but may not meet the IRAS criteria and vice versa.

According to ACRA 

ACRA defines a company as inactive during a period in which no accounting transactions occur. However, your company in Singapore can still make certain transactions while being dormant. These transactions are allowed only if the primary purpose is to help the company cover certain compliance or administrative costs. Note that these transactions do not include:

• Appointment of company secretary;
• Appointment of auditors;
• Registered office maintenance;
• Storage of registers and bookkeeping;
• Payment of fees to the Registrar or default fines or penalties paid to ACRA; and
• Payment or receipt of such nominal sum not exceeding S$5,000.

According to IRAS 

IRAS considers a company inactive when it is not conducting business and has no revenue for the entire fiscal period. For example, a company does not carry on business and has no income for the whole fiscal period ending in 2021. Hence, this company will be considered an inactive company for the Year of Assessment (YA) 2022.

Once deemed dormant by the IRAS, your company can be exempted from submitting its financial statements to the tax administrator.

Filing requirements for dormant companies in Singapore

However, your company may still be required to file its annual return to ACRA and its tax returns with IRAS.

ACRA’s annual return filing 

Your company can be exempted from preparing financial statements, if:

• It does not have accounting transactions;
• It is not a listed company or a subsidiary of a listed company;
• Its total assets at any time during the relevant financial year do not exceed a value of $500,000 or such other amount as may be determined in lieu by the Minister;
• It is a holding company (which is not a subsidiary of another company), included in the group whose total consolidated assets at any time during the financial year concerned do not exceed $500,000 in value or such other amount as may be designated as a substitute by the Minister.

However, note that ACRA may still require your company to file its annual returns. The filing process can be done electronically by a registered filing agent. That being said, your dormant company is allowed to choose the simplified annual return via BizFile+ or the ACRA’s mobile app.

To qualify for the simplified version, your company must satisfy the following criteria:

• Your company must have been declared a “private dormant relevant company.”  That means, your company must be neither a registered company nor a subsidiary of a listed company, since the previous annual return;
• It is not in the process of submitting audited financial statements;
• It is exempted from filing financial statements with ACRA;
• Its Financial Year End (FYE) is on or after 31 August 2018;
• You have not modified your company’s information registered with ACRA.

If your inactive company is not listed, you must submit annual returns within seven months of the end of the FYE. On the other hand, given that your company is listed, you must submit annual returns in less than five months from the end of the FYA.

IRAS’ tax return filing 

Your inactive company can apply for a waiver to submit a tax return (Form C-S/C) if it meets the following qualification requirements:

• Your company must be in a dormant state and have submitted Form C-S/C, financial statements, and tax calculations up to the date of business termination;
• It must not hold any investment (e.g., shares, real property, fixed deposits). If the company owns investments, it must not earn any income from these investments;
• It must have been deregistered for Goods and Services Tax (GST) purposes before the application if it had previously been a GST registered company; and
• It must not have any intention of restarting the business within the next two years.

How to reactivate your dormant company

 Reactivating your company means resuming your business activities and starting to handle transactions. If you decide to terminate your company’s dormant status, you will need to notify the IRAS of your intentions within one month after restarting your business.

You can notice IRAS via email and must include the following details:

• Subject title: “Recommencement of business and request for Income Tax Return”;
• Company Name and Unique Entity Number (UEN);
• Date of resumption of new main business and activities (if applicable); and
• Date of receipt of other sources of income, e.g., interest, dividends, rent, etc. (If applicable).

How to close a dormant company in Singapore

When the time comes, and for particular reasons, you may change your mind and want to close your inactive company. If that is the case, filing a strike would be the most appropriate way to close your dormant business. Below are the steps to doing it:

1. Submit an application to ACRA stating your wish to remove your company name from the company register.
2. The application must be submitted by your company secretary, director, or registered filing agent (it can be submitted electronically via the BizFile Portal).
3. Once approved, your inactive company will officially be dissolved.

For detailed information about how to strike off a company in Singapore, please refer to 

A Guide to Striking Off a Company in Singapore

If you need further information about the statutory obligations of a dormant company in Singapore, you can talk to our consultants by dropping us an email or a chat message on our website.

Need advice on the best structure
for your business

Biz Atom helps entrepreneurs and international business make the right choice when setting up in Singapore.