Singapore to shorten corporate closure process, easing restructuring for businesses

Singapore will shorten the process for closing dormant companies, making it faster and less costly.

Under changes to the Companies Act aimed at streamlining restructuring and preventing the misuse of shell companies, the government plans to allow the Accounting and Corporate Regulatory Authority (ACRA) to complete voluntary strike-offs in about 60 days, down from 90.

For voluntary strike-offs, ACRA will be permitted to issue notices immediately after informing a company and its officers, instead of waiting 30 days. For regulator-initiated closures, the objection period will be cut in half from 30 to 15 days, reducing the overall timeline to about 75 days. The 60-day public objection window remains unchanged.

Lawyers observe that many multinationals and small and medium-sized enterprises (SMEs) dissolve dormant subsidiaries during restructuring, often to simplify group structures or exit unprofitable ventures. “A longer strike-off process can delay restructuring unnecessarily,” said Catherine Lim, partner at CorpServe, adding that a faster process would give companies more flexibility to reorganize operations.

Other businesses seek a strike-off to shut down noncompliant entities before taking enforcement action. Steven Lo, managing director of corporate and finance at Drew & Napier, said a shorter process would “allow businesses to efficiently streamline their corporate structure and reduce audit and compliance burdens.”

The reforms follow a $3 billion money laundering scandal in 2023 that revealed how shell companies were exploited to funnel illicit funds. Authorities also uncovered over 3,000 dormant shell firms in 2020 linked to scams and cross-border transfers. By removing inactive companies more quickly, regulators hope to limit such risks and provide banks with cleaner, up-to-date company registers.