|

Business vehicles

There are various business vehicles which may be set up in Singapore by foreign investors. A company is the most commonly used one. All companies must be registered with the Accounting and Corporate Regulatory Authority (ACRA) and may be private or public.

The most important difference between a private company and a public company is that a public company may raise funds from general public while a private company may not. A company is a legal entity separate and distinct from its shareholders and directors, with its members having limited liability. Under the Companies Act (CA), a company must have at least one shareholder and at least one director who is an adult ordinarily resident in Singapore. To be ordinarily resident, the person must be a Singapore citizen, a Singapore permanent resident, or a foreigner holding an EntrePass or employment pass (both available by applying to the Ministry of Manpower) and residing in Singapore. There is no minimum paid-up capital requirement and a company can be registered with a minimum of S$1.

The business operation and management of a company is vested in its board of directors: executive directors take care of the daily operations of the company and non-executive directors oversee the affairs and corporate governance of the company but are not involved in its daily operations. Every company must appoint an auditor within three months from the date of its incorporation unless it is exempted from audit requirements. It must also appoint a locally resident company secretary, who must not be the sole director of the company and who must meet various other prescribed requirements, within six months of incorporation.

There is generally no special approval required for most business activities in Singapore. However, certain types of business activities are controlled by government agencies and will require the necessary approvals and licensing before commencing business. Banking and other finance-related businesses, for example, require approval from the Monetary Authority of Singapore (MAS). Other activities like international air transport, telecommunications, the production of cigarettes, beer, refrigerators and air-conditioners, and the operation of restaurants, bars and casinos require a licence from other government bodies.

Other business vehicles available, although less popular for foreign investment, are:

A branch of a foreign company

This may be registered with the ACRA by the foreign company. As it is not a legal entity separate from the parent, any liabilities or obligations which arise against it in Singapore may be enforced against all the assets of the parent company. A branch does not have its own shares nor board of directors. The parent company must appoint two or more persons resident in Singapore to be its agents and to accept on its behalf service of process and notices required to be served on the company. The parent company is also under an obligation to update the Companies' Registrar of changes in its agents, registered address and certain other details. It must also file its annual report and the audited accounts of its Singapore branch within two months after its annual general meeting or within seven months from the end of its financial year. Various other corporate records and filings must also be maintained with the ACRA.

Sole proprietorship

This is an individual carrying on business either in its own name or under a trading name. It is not a separate legal entity and the owner has unlimited liability. If the owner is not resident in Singapore, he must appoint a local manager who is ordinarily resident in Singapore. Under the Business Registration Act, sole proprietorships must be registered with the ACRA.

Partnership

This is an association of two or more persons carrying on business in common with a view to profit. The number of partners is generally capped at 20, except for professional partnerships. It is not a separate legal entity and the partners have unlimited liability for the partnership's debts and for losses incurred by the other partners. Under the Partnership Act, all partnerships must be registered with the ACRA.

Limited partnership

This consists of two or more persons with at least one general partner and one limited partner. There is no limit on the number of partners and any individual or corporate body can be a general partner or a limited partner. It is not a separate legal entity. The general partner is personally liable for all debts and losses of the limited partnership, while the limited partners are only personally liable for such debts or obligations up to their agreed contribution, unless they take part in its management. Limited partnerships are governed by the Limited Partnership Act and are commonly used by investment funds as investment vehicles.

Limited liability partnership

A limited liability partnership (LLP) is a partnership where each individual partner's own liability is limited. A partner is personally liable for debts and losses resulting from its own wrongful actions and is not personally liable for debts and losses of the LLP incurred by other partners. There must be at least two partners, with no maximum limit as to the number of partners. An LLP is a separate legal entity from its partners and is governed by the Limited Liability Partnership Act.

Trust vehicles

Trust vehicles, like collective investment schemes or business trusts, consist of a trust over assets, which will be managed by a professional manager in accordance with the terms and conditions of its mandate. Legal title to the assets is in the name of a professional trustee, who under the trust deed, safeguards the assets and ensures compliance with laws, regulations and rules. The investors hold units in the trust and are not personally liable for investment losses incurred by the professional manager on behalf of the trust.

|

M&A

Instead of setting up a business vehicle, a foreign investor may acquire an existing Singapore business. The most common method is by acquiring shares in a private or public company.

Acquiring a public company

The most important instrument an acquirer of a public company must comply with is the Singapore Code on Takeovers and Mergers (Code) issued by the MAS under the Securities and Futures Act (SFA), together with various Practice Statements issued by the Securities Industry Council (SIC). The Code applies to takeovers of Singapore and foreign corporations with a primary listing of their equity securities on the Singapore Exchange Securities Trading Limited (SGX-ST). Where possible and appropriate, acquirers of Singapore unlisted public companies with 50 or more shareholders and with net tangible assets of S$5 million or more should also comply.

Under the Code, a person acquiring shares in a public company must make a general offer to purchase all the shares in the company under the following circumstances:

• If they (and any parties acting in concert with them) acquires shares carrying 30% or more of the voting rights in the company; or

• If they (and any parties acting in concert with them) holds at least 30% but no more than 50% of the voting rights of a company and acquires such additional shares that their percentage of the voting rights increases by more than 1% in any six-month period.

A person may also make a voluntary offer to purchase all the shares of the company. Under the Code, such an offer must be conditional on a minimum level of acceptance being achieved: the acceptances must result in the bidder (and any parties acting in concert with it) holding more than 50% of the voting rights in the target company.

In general, a person may not make an offer to acquire only part of the shares in a public company except with the prior consent of the SIC. The SIC will not grant consent if the partial offer would result in the bidder and the parties acting in concert with them holding between 30% and 50% of the voting rights of the target company.

Other key legal instruments which the acquirer has to comply with are:

• SGX-ST Listing Rules: Where the bidder is listed on the SGX-ST, it must seek the approval of its shareholders for an acquisition that exceeds certain thresholds or if it is offering its own shares as consideration for the offer. If it intends to seek a de-listing of the target, a reasonable exit alternative, which should normally be in cash, should be offered to the target's shareholders.

• CA: Certain provisions apply to takeover offers, like those relating to shareholding reporting requirements during stake-building. Please note that where a takeover offer is made for a Singapore company and acceptances are received in respect of 90% or more of the shares to which the offer relates within four months of making the offer, the bidder may compulsorily acquire the shares of the non-accepting shareholders.

• SFA: Insider trading provisions in the SFA restrict the communication to a third party of material, price-sensitive information which is not generally available, where the third party is likely to deal in the securities. They also prohibit the dealings or procurement of others to deal in these securities. It is also an offence under the SFA for a person to make a takeover offer if he has no intention to make an offer, or has no reasonable or probable grounds for believing that he will be able to perform his obligations in the offer.

Acquiring a private company

The acquisition of shares in a private company generally starts with a short document (which may be called a heads of agreement, term sheet, letter of intent, or memorandum of understanding) generally provided to be subject to contract or definitive agreements and is not binding, except for clauses like confidentiality, governing law, dispute resolution, costs and fees, and exclusivity. Parties may also build in additional binding clauses like no-shop, lock-out, and break fee to mitigate the risks of a party pulling out of the negotiations without good cause. Following a successful negotiation, a private written share sale and purchase agreement between the seller and the purchaser (where necessary, with a covenator and guarantor) setting out the detailed terms and conditions governing the pre-and post-completion obligations of the parties will be signed. For share transfer purpose, a share transfer form signed by the seller will be delivered to the purchaser as a key completion deliverable.

Other methods

An investor may also subscribe for newly issued voting shares in a private company under a share subscription agreement signed with the target company and the existing shareholders. The investor gains control over the target company if its resultant shareholding in the target accounts for more than 50% of its entire issued voting share capital, with the existing shareholders being diluted.

Other less common methods of acquiring a company are:

• A scheme of arrangement: This is a statutory procedure under the CA for restructuring a company. The arrangement must be approved by a majority (in number) of shareholders holding at least 75% (in value) of the shareholders or class of shareholders present and voting in a general meeting, and once approved, sanctioned by the High Court. Once sanctioned, it binds all the shareholders (including dissenting shareholders). Where the target is a public company, the Code will also apply.

• A statutory amalgamation: Under the CA, two or more companies may amalgamate and continue as one company. The amalgamation must be approved by special resolutions of the shareholders of the amalgamating companies. An amalgamation proposal must be prepared and the directors of each amalgamating company must make solvency statements in relation to the amalgamating and amalgamated companies. If a public company is involved, the Code must also be complied with.

Other regulatory requirements

Section 54 of the Singapore Competition Act prohibits mergers and acquisitions which have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore for goods or services, unless excluded or exempted. The Competition Commission of Singapore (CCS) determines whether any particular M&A is caught under Section 54. The review is a two-step process: the first step generally takes less than 30 working days and is a quick review. Mergers which clearly do not have any anti-competition concerns may complete without undue delay. If the CCS forms no view after the first step, then a more extensive review, which may take up to 120 working days, will be conducted. While the prior approval of the CCS is not required for a merger, a merger subsequently determined to be in breach of Section 54 may subsequently be required to be unwound. It is therefore advisable for the parties to voluntarily notify the CCS of the intended merger in order to seek its prior approval.

Finally, it must be noted that although generally there are no foreign shareholding restrictions for most business in Singapore, the acquisition of interests beyond certain shareholding thresholds for certain companies in Singapore requires the prior approval of the relevant authorities:

• 5%, 12% and 20% of any bank or any financial holding company;

• 5% of any finance company;

• 5% of any insurance company;

• 5% and 12% of any newspaper or television broadcast company; and

• 12% and 30% of any designated telecommunication licensees.

With US$3 trillion in foreign exchange reserves, China has been ramping up investments around the world. According to CNBC, net outward-bound foreign direct investment by Chinese companies grew from US$5.5 billion in 2004 to US$68.81 billion in 2010 and Singapore is one of the top 10 investment destinations of China. It is widely expected that foreign direct investment from China to Singapore will continue to increase in the future.

How to make a successful investment in Singapore is a complex question and each investment is unique. We hope this article provides you with an overview of business vehicles available and M&A in Singapore.

Author biographies

Joseph HE Jun

Partner

Joseph He Jun is the joint head of the China practice and is a partner in both the corporate/mergers and acquisitions and the capital markets practice.

His main practice areas are corporate finance, equity capital markets, foreign investment in the People's Republic of China (PRC), mergers and acquisitions and property development in the PRC.

Joseph is recommended in The Legal 500 – The Client's Guide to the Asia Pacific Legal Profession 2012, for real estate work in the PRC. He is also recommended as a leading practitioner in Singapore and the PRC by Chambers Global – The World's Leading Lawyers for Business 2012, in the area of corporate M&A. Joseph is also recommended as a leading M&A practitioner in Expert Guides' Guide to the World's Leading Practitioners: China 2011.

Joseph graduated with a bachelor of arts from Yunnan University (PRC) and obtained a master of laws from both China University of Politics and Law in Beijing and McGeorge School of Law, University of the Pacific (US). He was also a visiting scholar at the School of Law, Columbia University (US) from 1990 to 1991. Joseph is admitted to the bar of the People's Republic of China.

Gerry GAN

Partner

Gerry Gan is the joint head of the China practice and is a partner in the corporate/mergers and acquisitions practice. His main practice areas are mergers and acquisitions (involving public and private companies), equity capital markets transactions (initial public offerings and private placements) and general corporate law. He has been the chief representative of the firm's Shanghai representative office since 2004 and was based in Shanghai between 2004 and 2009.

Gerry is recommended in The Legal 500 – The Client's Guide to the Asia Pacific Legal Profession 2012 for real estate work in the PRC. He is also recommended as a leading M&A practitioner in Expert Guides' Guide to the World's Leading Practitioners: China 2011.

Gerry graduated from King's College London. He is admitted as a barrister-at-law (Middle Temple) in the UK and to the Singapore bar. He served as the vice president of the Shanghai Singapore Business Association from 2008 to 2009. Gerry has recently contributed to the Singapore chapter of a textbook published by CCH entitled China Outbound Investments – A Guide to Law and Practice.

到新加坡投资：营商工具和并购

何军 和 颜建堃

王律师事务所

新加坡是一个接近赤道、位于马来半岛南端的岛屿城市国家。新加坡是东南亚国家联盟 (ASEAN) 的成员国，在环球贸易、金融及服务方面，可算是东南亚地区最重要的战略连结点。

尽管其面积不大，根据世界银行报告，新加坡于2009至2012年期间，连续四年获评定为全球最佳营商地点，在吸引外资方面也极之成功。新加坡统计局印发的2010年外国股权投资数字显示，截至2010年底，外商对新加坡股权投资总额上涨至6,135亿新加坡元。除了其战略位置、卓越的名声、出色的网络及基础设施、高端的银行系统及多元化人口外，新加坡的法律制度亦在吸引外资方面发挥重要作用。外国投资者在这城市国家进行投资前，应考虑在当地提供的营商企业模式及收购现有公司的一般法律问题。

|

营商工具

外国投资者可在新加坡设立不同的营商工具，公司是最常用的一种方式。公司可以非公开招股或公开招股形式设立，并必须向会计与企业管理局注册。

非公开招股公司和公开招股公司最主要的分别在于后者可向公众集资，而非公开招股公司不能。一家公司是一个法律实体，与其股东及董事相分离并独立存在，其成员对公司承担有限责任。根据新加坡的《公司法》规定，一家公司必须有至少一个股东及一个经常居于新加坡的成年董事。要符合“经常居于新加坡”的条件，董事必须为新加坡公民、新加坡永久居民，或持有创业准证或就业准证 (均需向人力部申请) 并居于新加坡。设立公司并无最低实收资本的要求，投资者可以最低1新加坡元注册设立公司。

公司的业务运作及管理权力属于董事会：执行董事负责公司的日常运作，非执行董事监察公司的事务及公司治理，但不参与日常运作。每家公司须于注册成立之日起三个月内委任审计师，除非公司获豁免有关审计要求。同时，公司须于注册成立之日起六个月内委任一位居于当地的公司秘书，该公司秘书不能是公司的唯一董事，并须符合其他各项规定的要求。

一般来说，新加坡对大部分商业活动，不设特别审批要求。但一些商业活动由政府机关控制，需于开展业务前取得所需审批及许可，例如银行及其他相关金融业务需取得新加坡金融管理局的批准。其他活动如国际航空运输、电信、生产香烟、啤酒、电冰箱及空调，以及经营餐厅、酒吧和赌场，均需向其他政府机关取得许可证。

其他适用外资的营商工具不及公司形式普遍，其中包括：

外国公司的分支机构

外国公司可以向会计与企业管理局申请注册设立分支机构。由于分支机构并非独立于母公司的法律实体，对于分支机构在新加坡产生的任何负债或义务，可对其母公司的所有资产强制执行。分支机构没有自有股份或董事会。母公司须委任两位或以上新加坡居民担任代理人，代表公司接受法律程序文件及公告送达。同时，母公司更改其代理人、注册地址及其他资料的，有义务向公司注册处报告有关更改资料。母公司须于年度股东大会召开之日起两个月内或财政年度结束之日起七个月内，向会计与企业管理局提交其年度报告及新加坡分支机构经审计的账目，以及其他公司记录和档案。

个人独资企业

个人独资企业是指个人以自己的名义或利用商号开展业务。这并非独立的法律实体，其所有人承担无限责任。个人独资企业所有人不居于新加坡的，应委任一位经常居于新加坡的当地经理。根据《商业登记法》，个人独资企业须经会计与企业管理局登记。

合伙企业

合伙企业是指两个或以上个人以牟利为目的，联合开展业务。合伙人的数目一般不多于20人，专业合伙企业除外。合伙企业并非独立的法律实体，其合伙人对企业的债务及其他合伙人所导致的损失承担无限责任。根据《合伙企业法》，所有合伙企业须经会计与企业管理局登记。

有限合伙企业

有限合伙企业包括两个或以上个人，至少一个普通合伙人及一个有限合伙人。合伙人的数目并无限制，任何个人或企业均可作为普通合伙人或有限合伙人。有限合伙企业并非独立的法律实体。普通合伙人对有限合伙企业的所有债务和损失承担个人责任，而有限合伙人则只对以其协议出资部分为限的债务和损失承担个人责任，除非他们参与企业的管理。有限合伙企业受《有限合伙企业法》监管，投资基金通常利用有限合伙企业作为投资工具。

特殊的普通合伙企业

特殊的普通合伙企业中，每个合伙人各自对企业承担有限责任。一个合伙人个人对其不当行为所引致的债务及损失承担个人责任，对其他合伙人对企业所造成的债务和损失并不承担个人责任。特殊的普通合伙企业最少有两个合伙人，合伙人的数目并无限制。特殊的普通合伙企业是独立于合伙人的法律实体，受《特殊的普通合伙企业法》监管。

信托工具

信托工具与集合投资计划或商业信托相似，是为资产设立一个由专业经理根据委托的条款及条件管理的信托。资产的法定所有权以专业受托人名义持有。受托人根据信托契约保管资产，并确保其符合法律法规及规则的规定。投资者持有信托的单位，对专业经理代表信托所产生的投资损失不承担个人责任。

|

并购

除设立营商工具外，外国投资者亦可收购现有新加坡业务，最普遍的方式是收购非公开招股或公开招股公司的股份。

收购上市公司

除证券业协会印发的各项实务准则以外，上市公司收购方须遵守的一条最重要的法律是新加坡金融管理局印发的《证券及期货法》中的《收购与兼并规范》 (《规范》) ，《规范》适用于收购新加坡证券交易所第一上市的新加坡和外国企业。在可能及适当的情况下，收购拥有50位或以上的股东及净有形资产达5百万或以上新加坡元的非上市新加坡公开招股公司亦需遵守该《规范》。

《规范》规定，收购公开招股公司股份的，有下列情况之一的，必须提出收购公司所有股份的要约：

• 它们 (及其他一致行动人) 收购的股份具有30%或以上的公司表决权﹔

• 它们 (及其他一致行动人) 持有至少30%、但不超过50%的公司表决权，在任何六个月内收购的额外股份使它们所持有的表决权比例增加超过1%。

此外，收购人也可自愿提出要约，收购公司的所有股份。根据《规范》，该要约须附带条件，要求取得最低接受程度：即接受要约须导致收购方 (及其他一致行动人) 持有被收购公司超过50%的表决权。

一般来说，除非事先取得证券业协会的同意，否则收购方不能提出只收购公开招股公司部分股份的要约。部分收购将导致收购方及其他一致行动人持有被收购公司30%至50%表决权的，证券业协会将不会同意该收购。

其他收购方需遵守的主要法律包括：

• 新加坡证券交易所上市规则：收购方在新加坡证券交易所上市的，如收购超过一定标准或提供自有股份作为要约的对价，须取得股东批准。如收购方拟为被收购公司申请退市的，应向被收购公司的股东提供合理的退出投资选择，一般以现金形式。

• 公司法：若干规定适用于收购要约，例如在增加股份的过程中有关申报持股数量的要求。需注意的是，受购方提出收购新加坡公司的要约，而在作出要约后4个月内，90%或以上的股份收购要约被接受的，收购方可强制收购不接受要约的股东所持有的股份。

• 《证券及期货法》：《证券及期货法》中的内幕交易规定，限制在第三方有可能进行证券交易的情况下，告知第三方一般不能取得的重大、股价敏感信息。另外，法规禁止买卖或促使他人买卖该证券。根据《证券及期货法》，提出收购要约但无提出要约的意图，或无任何合理或可能理由相信提出要约者能够履行要约中的义务的，属于违法行为。

收购非公开招股公司

收购非公开招股公司的股份一般以简短文件 (或称为意向性协议、条款清单、意向书或谅解备忘录) 开始，而文件的制定一般以合同或最终协议为前提，且不具约束力，有关保密、管辖法律、争议解决、成本和费用及排他协议等条款除外。双方可加入额外、具约束力的条款，如限制谈判、排他协商和终止协议费等条款，以降低一方在没有充分理由的情况下退出磋商的风险。成功完成磋商后，买方和卖方 (如需要，可加入立约者和担保人) 签订私人书面买卖股份协议，协议包括明确双方交易前后的义务的详细条款和条件。为了转让股份，将由卖方签字的股份转让表格送达到买方是一项重要的完成程序。

其他方式

一个投资者可与被收购公司及现有股东签订股份认购协议，认购非公开招股公司新发行、具有表决权的股份。认购股份导致投资者的持股量超过被收购公司已发行具表决权的股本总数的50%，并摊薄现有股东的持股比例的，投资者取得被收购公司的控制权。

其他较少见的收购公司方式包括：

• 协议安排：这是根据公司法进行公司重组的法定程序。安排必须获得过半数 (以人数计算) 持有出席股东大会并投票的股东或股东类别至少75% (以价值计算) 股份的股东通过，经通过的安排由高等法院批准。一经批准，安排对所有股东 (包括反对股东) 具约束力。如被收购公司是一家公开招股公司，需遵守《规范》的规定。

• 法定合并：根据公司法，两家或以上的公司可合并为一家公司存续。合并必须经两家合并公司的股东特别决议通过。公司须制定合并方案，各合并公司的董事须对合并及被合并的公司的清偿能力作出表述。合并涉及一家公开招股公司的，须遵守《规范》的规定。

其他法规要求

新加坡《竞争法》的第54条禁止已经或预计将大幅减低新加坡任何商品和服务市场竞争的并购交易，获排除或豁免的除外。新加坡竞争局负责决定一宗并购交易是否符合第54条所述情况。审查包括两个步骤：第一阶段为快速审查，一般不超过30个工作日。明显不具有反竞争影响的并购交易可无需延误，顺利完成。新加坡竞争局完成第一阶段后没达成意见的，会进行一个较详细的审查，审查期可长达120个工作日。尽管并购交易无须事前取得新加坡竞争局的批准，如并购交易事后被认定违反第54条规定的，委员会可在该宗交易完成后要求取消交易。因此，建议交易双方应自行通知新加坡竞争局拟进行的并购交易，于交易前取得批准。

最后投资者需注意的是，虽然新加坡对大部分业务没有外国持股限制，但收购某些公司的股权达到一定标准的，必须事先经有关机关批准：

• 任何银行或金融控股公司的5%、12%和20%持股；

• 任何金融公司的5%持股；

• 任何保险公司的5%持股；

• 任何报章或广播电视公司的5%和12%持股；

• 任何指定电信被许可人的12% 和30%持股。

中国拥有3万亿美元外汇储备，一直在世界各地加大海外投资。根据CNBC的报道，中国公司的净对外直接投资额自2004年的55亿美元增至2010年的688.1亿美元。新加坡是中国十大投资地点之一，预计中国对新加坡的直接投资在未来将持续上升。

如何在新加坡成功投资是一门复杂的学问，每项投资都有其独特之处。我们希望这篇文章能为您提供于新加坡适用的营商工具及并购事宜的概览。


作者简历

何军

合伙人

何军是中国业务组的联席主管，负责处理公司/并购及资本市场业务的合伙人。

他主要负责的业务范围包括企业融资、股票资本市场、在中国外商投资、并购及中国的房地产发展。

何军在处理中国房地产业务的表现获《法律服务500强 ─ 2012年亚太区法律专业客户指南》推崇。在公司并购业务方面，他亦获《钱伯斯环球指南 ─ 2012年全球杰出商务律师》推荐为新加坡和中国的杰出法律从业者，以及获《专家指南 ─ 2011年全球杰出法律从业者指南 (中国) 》推荐为杰出并购从业者。

何军于中国云南大学取得文学士学位，并在位于北京的中国政法大学及美国太平洋大学的McGeorge 法律学院取得法学硕士学位。1990至1991年间，他于美国哥伦比亚大学的法学院担任访问学者。Joseph拥有中国注册执业律师资格。

颜建堃

合伙人

颜建堃是中国业务组的联席主管，负责处理公司/并购业务的合伙人。他主要负责的业务范围包括 (涉及公开和非公开招股公司的) 并购、股票资本市场 (首次公开发行及配售) 及一般公司法。自2004年开始，他担任律师事务所驻上海代表处的首席代表，于2004至2009年间驻上海工作。

颜建堃在处理中国房地产业务的表现获《法律服务500强 – 2012年亚太区法律专业客户指南》推崇，他亦获《专家指南 ─ 2011年全球杰出法律从业者指南 (中国) 》推荐为杰出并购从业者。

颜建堃毕业于伦敦的国王学院，拥有英国大律师 (中庭) 及新加坡执业律师资格。2008至2009年间，他担任上海新加坡商会的副会长。颜建堃最近为CCH出版的《中国境外投资：法律及业务指南》，撰写有关新加坡的章节。