What is a Dormant Company in Singapore?

The definition of dormant simply means inactive. Similarly, in the corporate context, a Dormant Company in Singapore refers to the company that does not engage in any business activities or has ceased operations. A company that becomes a dormant usually occur in these common scenarios:

• Incorporate a company and to be temporarily put on hold for future use.
• The business owner decides to cease operations due to the inability to carry on the business but does not intend to close down the company. At any point in time, the dormant company may be “reactivated” to resume business.
• Maintaining the company status for the purpose of maintaining certain licenses.
• A company that owns investment such as properties, fixed deposits, and foreign shares.

In ACRA viewpoint

A dormant company does not have any accounting transactions within the financial year-end. Unless the accounting transaction is for the professional fee related to compliance requirements.

IRAS viewpoint

IRAS deemed that a company is dormant when it does not carry on business and has no income for the whole of the financial period. For instance, if a company did not carry on business and had no income for the whole of the financial period ending in the year 2019, it will be regarded as a dormant company for Year of Assessment (YA) 2020.

What are the compliance requirements for a dormant company?

Although ACRA exempts the company to prepare financial statements and holds AGM, the dormant company is still required to file the annual return by the 7 months after the financial year-end.

Besides that, the dormant company has to submit a tax waiver to get approval from IRAS to release the company for tax filing obligations.

How do I inform the authorities about the company’s dormant status?

The company has to inform ACRA and IRAS regarding the company dormant status. Generally, the dormant status can be updated to ACRA during the Annual Return filing. You will also need to submit the waiver of tax form to IRAS.

What are the requirements for a dormant company to be exempted from preparing financial statements?

A dormant company must fulfill the following requirements:

• The company is not a listed company or a subsidiary of a listed company
• It must not hold more than S$500,000 in assets for both group and company level.
• The company has been dormant since the formation of the end of its previous financial year.

How much to maintain a dormant company in Singapore?

To comply with the statutory requirements of a dormant company, you need to have a Company Secretary, file Annual Return and submit the Tax wavier. We offer our Dormant compliance package at S$460/year. As for an active company, we offer the Annual Compliance Package at S$1,200/year.