Introduction
Many entrepreneurs consider incorporating a dormant company in Singapore to preserve a corporate vehicle for future activities, protect a name, or hold assets. This article, Incorporating a Dormant Company in Singapore: Does It Still Have Compliance Obligations?, explains what “dormant” means under Singapore law and the ongoing obligations such a company must observe.
Even if a company carries out no trading activity, the Companies Act and tax regulations administered by ACRA and IRAS impose certain responsibilities on directors and company officers. Understanding these obligations helps avoid penalties and preserves the company’s good standing.
Who this applies to
This guidance applies to private companies incorporated in Singapore that have minimal or no accounting transactions during a period, including:
- Newly incorporated companies that have not commenced business;
- Companies retained to hold intellectual property or assets but not generating revenue;
- Small holding companies with no trading activity; and
- Companies awaiting investment or reactivation at a later date.
Key rules and requirements in Singapore
Being dormant does not mean being exempt from all statutory requirements. The key regulatory considerations are:
Definition of dormancy
For accounting and tax purposes, a company is dormant if it has no significant accounting transactions during a financial period. IRAS and accounting standards consider transactions which affect the financial position. Certain administrative entries (e.g. company incorporation fees, statutory penalties, capital injections) may still be regarded as transactions.
ACRA and corporate secretarial obligations
- Annual Filing: All companies must file annual returns with ACRA via the BizFile+ portal and maintain minute books and registers as required by the Companies Act.
- Annual General Meeting (AGM): Most private companies are required to hold an AGM unless they have passed the special resolution to dispense with the AGM under the Companies Act and the constitution permits this.
- Change Notifications: Any changes to directors, company secretary, registered address, or share structure must be notified to ACRA within prescribed timelines.
IRAS and tax obligations
- Tax Filing: Even dormant companies typically receive an income tax return package (Form C-S/C or Form C) and must submit it or apply for waiver if eligible. IRAS expects companies to inform them of dormancy and may accept a ‘nil’ tax return where appropriate.
- GST: A dormant company that is not making taxable supplies and does not meet the registration threshold does not need to be GST-registered. If previously GST-registered, the company must notify IRAS and deregister accordingly.
Financial statements
Under the Companies Act, companies must prepare financial statements for each Financial Year End. Dormant companies may be eligible for audit exemption if they meet the small company criteria and meet the conditions for an audit exemption under the Companies Act.
Employment, CPF and licences
- Employment: If a dormant company has no employees, CPF contributions and Employment Act obligations do not apply. However, if directors draw remuneration or the company employs staff (including foreigners on Employment Pass, S Pass or Work Permit), statutory obligations remain.
- Other Licences: Holding licences (e.g. trade licences) should be reviewed; failure to cancel unneeded licences may attract fees or penalties.
Step-by-step process
If you incorporate a company intending to keep it dormant, a pragmatic compliance checklist is:
- Assess dormancy: Confirm there are no material accounting transactions for the relevant Financial Year End.
- Board resolution: Record directors’ decisions that the company will be dormant and appoint a company secretary if required.
- Maintain statutory registers and minutes: Ensure registers of members, directors and minutes are maintained even if activity is minimal.
- File annual return with ACRA: Prepare and file the annual return on BizFile+ by the filing deadline to avoid late charges.
- Notify IRAS: File the relevant income tax return or inform IRAS of dormancy; deregister for GST if appropriate via myTax Portal.
- Consider audit exemption: Assess small company audit exemptions and retain supporting documentation to justify exemption if applicable.
- Review licences and payroll: Cancel or suspend licences and ensure no payroll obligations remain; where necessary, make CPF contributions and MOM reports.
Common mistakes to avoid
- Assuming no filings are required — ACRA annual returns and IRAS tax forms often still apply.
- Failing to maintain minutes and statutory registers — this can hinder future reactivation or sale of the company.
- Overlooking incidental transactions — bank charges, interest, or service fees can create accounting transactions that affect dormancy status.
- Not formally deregistering GST or cancelling licences — this can result in unexpected liabilities.
- Ignoring deadlines — late filings attract penalties and may affect the company’s good standing.
Practical examples
Example 1: A founder incorporates a holding company to reserve a brand name and does not commence trade. The company records only incorporation fees and director resolutions. It files an ACRA annual return, confirms dormancy to IRAS and claims audit exemption where eligible.
Example 2: A company is dormant but retains a bank account that charges monthly fees. Those fees are accounting transactions. The company must prepare accounts, and IRAS will expect tax filing unless a waiver is sought.
Example 3: A company with no employees but with an overseas director receiving director fees must consider withholding tax and CPF implications where payments are made locally.
How a corporate secretary can help
A corporate secretary can ensure that a dormant company remains compliant with the Companies Act and regulatory filings. Typical support includes:
- Filing annual returns and maintaining statutory registers on BizFile+;
- Advising on audit exemption eligibility and preparing minutes and resolutions;
- Coordinating with accountants for year-end financial statements and lodging tax returns on IRAS myTax Portal;
- Assisting with GST deregistration, licence cancellations and payroll compliance, including CPF matters when needed.
Raffles Corporate Services can assist with filings, compliance, accounting, tax and payroll support if you require administrative or advisory assistance.
Frequently Asked Questions
Can a dormant company be exempted from audit in Singapore?
Yes, a dormant private company may qualify for audit exemption if it meets the small company criteria under the Companies Act and has no significant accounting transactions. Directors should document the basis for exemption and retain supporting records.
Do I still need to file tax returns for a dormant company?
Generally yes. IRAS expects tax filings; companies should either submit the applicable Form C/Form C-S or notify IRAS of dormancy and request a waiver where appropriate. Failure to file may result in notices and penalties.
Is GST registration required for a dormant company?
No, if the company makes no taxable supplies and does not meet the registration threshold, GST registration is not required. If previously registered, the company must formally apply to deregister.
What happens if a dormant company receives a small amount of income?
Receiving income may change the company’s dormancy status and trigger accounting, tax and possibly GST obligations. Even small amounts should be recorded and assessed against IRAS and audit exemption criteria.
Key takeaways
- Incorporating a dormant company in Singapore does not eliminate statutory obligations under the Companies Act and IRAS rules.
- Annual returns to ACRA, statutory records, and tax filings (or waivers) are commonly still required.
- Small companies may be eligible for audit exemptions but must document and justify the exemption.
- Review GST, licences, payroll and CPF obligations before assuming full dormancy.
- Seek professional support from a corporate secretary or accountant to remain compliant and avoid penalties.
If you would like to find out more about how Raffles Corporate Services can assist with your company’s compliance and corporate secretarial requirements, please get in touch with the team at [email protected].
Yours sincerely,
The editorial team at Raffles Corporate Services
Requirements may change, so always check the latest guidance from ACRA, IRAS or MOM, or consult a professional adviser.
Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.