Reconstruction or Amalgamation of Companies

Buyer’s Stamp Duty (BSD) and Seller’s Stamp Duty (SSD) reliefs are applicable to transfer of undertaking or shares in respect of a scheme for the reconstruction or amalgamation of companies if the relief conditions are met.

When companies undergo reconstruction or amalgamation, the undertaking (i.e. business) or shares (collectively known as “assets”) may be transferred by the owner (“Transferor”) to the recipient (“Transferee”).

BSD and SSD reliefs may be granted on the instruments to transfer the assets if certain conditions are met.

Please note that this is a general guide for the relief. To check if the document qualifies for the relief, please refer to the following provisions for the conditions:
a. Section 15 of the Stamp Duties Act
b. Stamp Duties (Relief from Stamp Duty Upon Reconstruction or Amalgamation of Companies) Rules 2000

Conditions for Relief

With effect from 11 Mar 2017, Stamp Duty Relief will not be granted on transfers involving residential Property-Holding Entities where Additional Conveyance Duties is applicable under section 23 of the Stamp Duties Act.

  1. Pre-requisite for Relief

    There is a reconstruction or amalgamation scheme for which the ownership of the assets before and after the restructuring will remain substantially the same.

    For reconstruction, the owner retains at least 90% of the assets directly or indirectly after the transfer.

    For amalgamation, there will be no substantial change in the ownership of the respective companies except for the fusion into common ownership of what was previously in separate ownership.
  2. Pre-requisite for Transferee

    The Transferee is a limited liability company that was incorporated or had increased its capital to acquire the undertaking or to acquire ≥ 90% of the total voting shares in the target company.
  3. Whether the consideration should be at market or book value

    If the Transferor and the Transferee are wholly associated (i.e. one company is 100% owned, directly or indirectly, by the other), the consideration for the assets may be at the Transferor's book value. Otherwise, the consideration must be at market value.
  4. Whether the consideration is settled in cash or by shares

    If the Transferor and the Transferee are wholly associated, the consideration may be settled in cash. Otherwise, at least 90% of the consideration must be settled by the issue of voting shares in the Transferee (“consideration shares”).
  5. Settlement by consideration shares

    For the acquisition of undertaking by the Transferee, the consideration shares can be issued to the Transferor or its shareholders. For the acquisition of shares by the Transferee, the consideration shares can only be issued to the Transferor.
  6. Time frame for relief claim

    1. For an instrument that is executed in Singapore, the claim is made within 14 days of the execution.   
    2. For an instrument that is executed overseas, the claim is made within 30 days of the execution.
    3. Where in-principle approval for the relief was granted before the instrument was executed, the instrument is executed within 4 months from the date of the in-principle approval.
  7. Retention of the Consideration Shares  

    The Transferor or its shareholders cannot dispose of the consideration shares within 2 years from the following dates
    • Date of Registration/ Incorporation of the Transferee or
    • Date of Resolution passed by the Transferee to increase its share capital for the acquisition.  
  8. Retention of the Assets

    The Transferee cannot dispose of the assets within 2 years from the following dates:
    • Date of Registration/ Incorporation of the Transferee
    • Date of Resolution passed by the Transferee to increase its share capital for the acquisition or
    • Date specified in the notice of amalgamation issued under section 215F of the Companies Act. 
  9. Time frame for completion

    The instrument to transfer the legal interest in the assets is executed within 12 months from dates referred to in condition (8).

    The above conditions (2) and (4) are waived for amalgamations under section 215D of the Companies Act (Cap. 50) and conditions (3), (5) and (7) are not applicable.

    In the event that
    • any declaration or evidence furnished was subsequently found to be untrue; or
    • conditions (7), (8) or (9) were not met,

      the Transferor and the Transferee are required to inform the Commissioner of Stamp Duties within 30 days of the event. BSD and SSD with interest become payable immediately. The interest is computed at 6% per annum accordingly:
    • For an instrument that is executed in Singapore, the interest is computed from the date of the instrument.
    • For an instrument that is executed overseas, the interest is computed from the date that the instrument was first received in Singapore.
    • If duty had been paid prior to the Stamp Duty relief, the interest is computed from the date of refund.

 

Exception to Retention of Consideration Shares

The Transferor or its shareholders cannot dispose of the consideration shares in the Transferee within the retention period except:

  • where the disposal was a result of reconstruction, amalgamation or liquidation
  • where the amalgamation exercise is carried out under Section 215D of the Companies Act

    Exception to Retention of Assets

    The Transferee cannot dispose of the assets within the retention period except where the disposal was a result of reconstruction, amalgamation, liquidation or relevant offer of shares.

      How to Apply

      To apply for the relief, submit an application with the supporting documents within the stipulated time frame to:

      Commissioner of Stamp Duties
      55 Newton Road
      Revenue House
      Singapore 307987

      List of Supporting Documents and Information Required

      1. Copy of the reconstruction/ amalgamation agreement and other documents (executed to carry out the reconstruction / amalgamation).
      2. Applicant's opinion on the value of the undertaking or shares, whichever is applicable.
      3. Copy of the latest audited statement of accounts and/or latest certified management accounts of the Transferor, the Transferee and the target entity.
      4. Copy of the memorandum and articles of association, board minutes and resolutions of the Transferor and the Transferee concerning the disposal/ acquisition.
      5. Graphical presentation of the group structure between the Transferor and the Transferee immediately before and after the reconstruction/ amalgamation.
      6. Business profiles of the Transferor, the Transferee and the target entities from the Accounting and Corporate Regulatory Authority (ACRA) or the equivalent.
      7. Copy of the share registers of the Transferor and the Transferee.
      8. A written declaration for the application of the relief containing the following information: 
        • The Sale and Purchase Agreement or Transfer documents is not liable to ACD New!
        • Description of the scheme of reconstruction/ amalgamation and the purpose for carrying out the scheme
        • How each of the conditions for relief has been/ will be met (with the supporting documents attached)
        • Whether there is any intention of the Transferor or any of its shareholders to dispose of the consideration shares within the retention period
        • Whether there is any intention of the Transferee to dispose of the assets within the retention period 

      If the Transferee is going for an initial public offering (IPO) or a further listing of its shares, the following information must be provided:

      1. The market in which the shares will be listed
      2. Total number of issued share capital immediately before the IPO listing or further listing
      3. Total number of shares that are held by public shareholders before the further listing
      4. Number of shares that will be listed in the IPO listing or further listing
      5. Names of all shareholders (excluding public shareholders) immediately before the IPO listing or further listing
      6. Copy of the application to SGX for the IPO listing or further listing
      7. Copy of the prospectus for the IPO listing or further listing
      8. Copy of the board meetings and resolutions relating to the IPO listing or further listing

      If the consideration shares are/ will be issued to shareholders of a listed company, the following information must be provided:

      1. Total number of issued share capital immediately before the commencement date of the reconstruction/ amalgamation
      2. Total number of shares that are held by public shareholders immediately before the commencement date of the reconstruction/ amalgamation
      3. Names of all shareholders (except public shareholders) and the number of consideration shares issued to them before the commencement date of the reconstruction/ amalgamation

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