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Buying a Company in Singapore

Updated on Thursday 19th May 2016

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Buying-a-Company- in-SingaporeAcquisition of companies in Singapore

Companies wanting to grow or expand their activities can do so by investing more in the business or by purchasing another entity. During the last years, the most common way of raising a company has become buying another business. In Singapore, acquisition of other companies is regulated by the Commercial Law in the first place, and by the Take-Over Code and Competition Act in the second place. The last two laws refer to mergers and acquisitions in Singapore. The Government also grants an allowance for purchasing another company. In the case of small and medium-sized enterprises the allowance is 25% of the value of acquisition.

For information about the M&A legislation and the governmental allowance, you can refer to our specialists in Singapore.

Ways to purchase a company in Singapore

There are two ways of buying a company in Singapore:

  • -          by acquiring the business and its assets, also known as an asset deal;
  • -          by acquiring the majority of shares in the company, also known as a share deal.

The main difference between the two means of buying an enterprise is that when taking over another company’s business the buying company will only acquire its assets without the liabilities, while when acquiring shares in another entity, the liabilities are also included in the deal.

There are several factors influencing the type of deal when acquiring a Singapore company, and one of the most important is taxation. Our consultants in company formation in Singapore can help you understand how the taxation of such deals occurs.

The steps to buy a company in Singapore

There are several steps to follow when buying a company in Singapore:

  • -          structuring the transaction;
  • -          the due diligence procedures;
  • -          detailing the terms of the sale;
  • -          signing the deal;
  • -          approving the deal.

In Singapore it is also a common fact for contracting parties to sign a memorandum of understanding or a letter of intent and even a confidentiality agreement before organizing the transaction. The procedure for acquiring a company listed on the Stock Exchange is more complex.

If you need assistance with the procedure of buying a company, do not hesitate to contact our company registration agents in Singapore.

 

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