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Allotment of Shares in Singapore

Allotment of Shares in Singapore

Starting a business in Singapore implies complying with various requirements imposed under the Company Law. Even if this act does not provide for a specific amount that must be deposited as minimum share capital, there are certain aspects that need to be considered in respect to it. One of them covers the issuance of shares based on the contribution of the participants in the company. The procedure is called allotment of shares and it must be made by meeting certain criteria.

Below, we invite you to read about the allotment of shares in Singapore. Our company formation specialists in Singapore are at your service with tailored guidance in setting up a business.

Share capital requirements in Singapore

One of the best aspects about opening a company in Singapore is that there are no requirements to deposit a specific amount of money no matter the type of structure selected. However, local and foreign investors who decide to operate in the city-state must consider other aspects when setting up a business here.

Here are the most important things to consider:

  • – a company can have majority and minority shareholders;
  • – the amount of money a shareholder contributes is the equivalent of a specific number of shares attributed to the respective shareholder;
  • – there are several types of shares a company can issue;
  • – the allotment of shares can be used to increase or decrease the capital of a company.

Only private and public limited liability companies in Singapore must have a share capital upon incorporation.

Our agents can offer more information on the allotment of shares in Singapore in accordance with the selected types of company. We are also at your service if you want to set up a branch office in Singapore.

Types of shares a company can issue in Singapore

There are various aspects to consider about the allotment of shares in Singapore and one of the most important refers to the types of shares a company can issue.

Here are the main types of shares according to the Company Law:

  1. ordinary shares – each company must issue at least one ordinary share upon incorporation;
  2. preference shares which are issued to members with special rights (such as dividend payment or asset distribution);
  3. non-voting shares which are usually issued to employees of Singapore employees;
  4. management shares which are offered to managers and directors and have specific voting rights;
  5. redeemable shares which are issued under certain conditions and can be bought back by the company;
  6. deferred shares which are issued with the purpose of ensuring minimum dividends are paid to the shareholders.

All these shares can be allotted in different ways based on the type of company issuing them.

Our company registration advisors can provide detailed information on the allotment of shares in Singapore.

What does it mean to allot shares?

A simple definition of allotment of shares implies the issuance of new shares in return of cash. Generally speaking, the allotment is made to increase a company’s share capital. The procedures are made by meeting different requirements based on the type of legal entity issuing them.

If you want to expand a foreign business by setting up a branch office in Singapore, you should note that such an entity cannot issue shares.

The procedure of allotment of shares in Singapore

The process implies filing a Return of Allotment of Shares application form with ACRA by the private or public enterprise issuing them. Before filing the application, the following papers must be drafted:

  • – details on the shares allotted;
  • – the amount paid for each share;
  • – the class of shares;
  • – the list of shareholders and details on their participation in the company.

Other aspects to consider imply:

  • – the allotment of shares can be decided by the managers of the company under Section 161 of the Companies Law;
  • – private company can issue the shares only after filing the Return of Allotment of Shares;
  • – public company must file the Return of Allotment of Shares no later than 14 days after issuing them;

Our Singapore company formation officers are at your disposal with detailed information on the issuance of shares.

Why invest in Singapore

Singapore is one of the most appealing foreign investment destinations in Southeast Asia, and according to data gathered by SingStat:

  • – Singapore’s Foreign Direct Investment (FDI) stock was 1.912 billion USD at the end of 2019;
  • – this amount represents a 10.4% increase from the amount obtained in the previous year;
  • – equity investment was the main driver of FDI accounting for 1.836 billion USD.

If you need more information on the allotment of shares in Singapore, do not hesitate to contact our local representatives.