- NEWSLETTER,SAUDI ARABIA
- May 15, 2023
Saudi Arabia has announced the establishment of four new Special Economic Zones (SEZs) as part of its Vision 2030 economic diversification, innovation, and international investment attraction strategy. The new SEZs are strategically positioned throughout the nation to serve a variety of industries and sectors, including advanced manufacturing, logistics, food processing, maritime, and cloud computing.
The regulatory framework tailored by the Kingdom for these SEZs is intended to facilitate business operations and provide competitive advantages. Key aspects include one hundred per cent foreign ownership, flexible employment regulations, and individualised incentive programmes. These zones provide a simplified legal environment, allowing Saudi Arabia to expedite certain reforms and attract foreign investment.
Investors can anticipate numerous incentives and advantages, including competitive corporate tax rates, duty-free machinery and raw materials imports, VAT exemptions, withholding tax exemptions, and streamlined administrative procedures. In addition, the SEZs provide access to efficient utilities, a skilled workforce, cost-effective network connectivity, and strategic locations near key transportation hubs.
It is anticipated that the establishment of these new SEZs will have a significant impact on Saudi Arabia’s economy by attracting foreign direct investment (FDI), boosting domestic investment, and providing a platform for multinational corporations to establish operations in the region. The objective of these zones is to diversify the economy, reduce reliance on oil revenues, and foster growth in sectors such as technology, logistics, and maritime industries. In addition, they will stimulate job creation and skill development, providing new opportunities for the young, highly educated population of the Kingdom.
The success of these SEZs in Saudi Arabia will depend on the regulatory framework and its implementation. As more information becomes available, we will gain a better understanding of their potential impact on the economy of the Kingdom and the competitive landscape of the region. It remains to be seen if these SEZs can replicate or even surpass their UAE counterparts’ success.
Conclusion
The announcement of new SEZs in Saudi Arabia is a positive development for the country’s economy and Vision 2030 strategy. Investors interested in learning more about the implementation and regulatory framework of these promising zones should continue to monitor this space.
- NEWSLETTER,U.A.E
- May 15, 2023
The United Arab Emirates has become a leading international business hub. Part of what draws businesses here is its myriad Freezones. UAE has over 45 economic zones focused on specific sectors, but this may prove confusing for companies that wish to set up operations in the country.
Companies seeking Dubai free zone company formation must take several important factors into account when selecting their location. Businesses should first ensure their industry meets the infrastructure and support offered in their Freezone. They should then consider factors like transportation access and proximity to target markets as they might affect operations.
Cost is another key element, with each free zone offering different fee structures and operating expenses that must be considered when choosing their ideal Freezone location. Businesses should select an environment that fits within their budgetary constraints while providing future growth potential, and the legal and regulatory environment varies between Freezones. Thus, it is essential that businesses choose one which fits their requirements while being aware of any possible restrictions or constraints that might limit growth potential.
Networking opportunities and additional support services should also be a top priority, with some Freezones providing mentorship programs, access to funding sources, and assistance for business setup assistance.
Dubai is home to two of the oldest and most established Freezones: International Free Zone Authority (IFZA) serves a diverse set of sectors while remaining cost-effective and flexible; Dubai Multi Commodities Centre (DMCC) specialises in commodities trading and precious metals, offering world-class infrastructure and boasting an active business community.
Dubai International Financial Centre (DIFC) serves as a premier hub for finance, banking and insurance firms seeking access to Middle Eastern and South Asian markets, while Abu Dhabi Global Market (ADGM) on Al Maryah Island supports the finance, professional services, and technology industries via an English common law-based legal framework.
Businesses can successfully establish their presence in the UAE with minimal risk by opting for a business setup in Dubai free zone tailored to their individual requirements. Careful consideration is essential when selecting a free zone to navigate this complex landscape efficiently and avoid potential pitfalls. Companies seeking expansion into Middle Eastern markets or access to global hubs will find numerous benefits from UAE free zones. Professional guidance, such as that provided by IMC Group, can make all the difference in streamlining the company setup process in Dubai free zones, ensuring a smooth and successful entry into this thriving business environment.
- India, Newsletter, Singapore
- May 15, 2023
India and Singapore are consistently strengthening their Strategic Partnership, with Singapore contributing to a quarter of India’s trade with Southeast Asia during FY 2021-22. Furthermore, Singapore has emerged as India’s leading foreign direct investment (FDI) source, and its prominent FDI firms are actively engaging in company formation in India for urban planning and infrastructure projects across the nation. This growing economic cooperation demonstrates the significant role Singapore plays in India’s trade and investment landscape.
Economic Ties Secured by the Comprehensive Economic Cooperation Agreement (CECA)
CECA serves as an essential platform for economic cooperation between India and Singapore, initiated in 2005. Since then, bilateral trade has expanded from US$6.7 billion in FY 2005 to US$30.11 billion by FY 2022. Singapore has become India’s sixth-largest trade partner, while India ranks 12th for Singapore.
Since 1990, Singaporean firms have become one of the primary sources of FDI into India, contributing nearly 23% of total inflows, totalling approximately US$140.98 billion over that time frame. Singaporean firms play a critical role in urban planning and infrastructure development in India.
India and Singapore enjoy an expansive bilateral relationship that spans political, defense, economic, technological, and cultural ties. Both countries actively participate in various international fora and have signed various agreements to facilitate collaboration. These agreements include the Double Taxation Avoidance Agreement and Defense Cooperation Agreement, which further facilitate cooperation.
India-Singapore Ministerial Roundtable
The inaugural India-Singapore Ministerial Roundtable took place in New Delhi in September 2022. It provided a platform to explore existing and emerging areas of cooperation such as digital connectivity, fintech, green economy/green hydrogen production/use, skill development, and food security. At this event, the Monetary Authority of Singapore (MAS) signed an Agreement on Fintech Cooperation between them and the International Financial Services Centers Authority (IFSCA) of Gujarat state.
Bilateral trade between India and Singapore reached US$14.75 billion during FY 2023 (April to August 2022), a 24.7% rise over its prior-year totals. This increase is attributable to both CECA’s success and the strengthening of the Strategic Partnership between both nations.
Conclusion
India and Singapore share a robust economic partnership, reinforced by the Strategic Partnership and CECA agreements. These agreements have led to significant growth in trade and investment between the two nations. As collaboration on a variety of issues continues to expand, the future holds immense potential for even greater economic cooperation. If you are considering company formation in Singapore or India, let IMC Group assist you in navigating this promising landscape. IMC Group can guide you through the process of company formation, ensuring a seamless experience.
- NEWSLETTER,U.A.E
- May 15, 2023
Dubai’s real estate market has experienced tremendous growth over the past decade, making it an ideal investment opportunity, according to experts in the city’s property industry. Dubai has become a sought-after destination for international investors and first-time buyers looking for investment opportunities within the UAE. Experts suggest that the sector is not showing any signs of slowing down while offering valuable advice for individuals looking to enter the market.
In 2022, Dubai’s real estate market experienced an astonishing 36% expansion, with over 88,000 transactions totalling AED240 billion completed, representing 61% growth compared to 2021. Rental prices also saw an average rise of 21% since 2021, making this an excellent time to enter the purchasing market. Rental yields can range between 5-9% with no property tax burden, enhancing its attractiveness further.
Dubai’s real estate market offers several key advantages for investors. The cost per square foot is much lower than in other highly desirable cities, providing more value for money. Furthermore, relaxed visa regulations allow investors to secure residency visas when purchasing properties of certain values.
When investing, it is imperative to conduct thorough research. Carefully consider a variety of factors, such as the developer’s track record, location, and potential return on investment (ROI). Location plays an instrumental role in ROI. When selecting prime locations to invest in, it is vital to consider amenities available such as retail stores, dining options, transport links, recreational activities, healthcare facilities, and schools in their evaluation. Also, familiarize yourself with local laws and regulations related to investment and real estate ownership to avoid legal complications.
When purchasing, also consider and compare all financing options available, taking into account maintenance and additional costs such as RERA service charges.
Partnering with an agent who specialises in the area or community you are researching is invaluable, providing answers to queries and up-to-date information on its location. These representatives can answer your questions quickly while offering valuable insight. If you’re considering a new business setup in Dubai, IMC Group can provide expert guidance and tailored solutions to help you navigate the process. With their extensive knowledge and experience, IMC Group ensures a seamless transition into the thriving Dubai market.
- NEWSLETTER,U.A.E
- May 15, 2023
The United Arab Emirates (UAE) Ministry of Finance has announced a new initiative to reduce the corporate tax burden and compliance costs of small and micro-businesses, including startups. Small Business Relief Ministerial Decision No. 73 of 2023 will be applicable to periods beginning after the 1st of June 2023 and ending on the 31st of December 2026. The relief is intended to promote the expansion and diversification of the UAE’s economy, as well as an environment conducive to investment and entrepreneurship.
Lower Tax Burden on Small Businesses
According to the Ministerial Decision, taxable persons with revenues of less than AED 3 million during the relevant tax period and all preceding tax periods will not be considered to have generated any taxable income. The revenue calculations will adhere to the UAE’s accepted accounting standards. However, Qualifying Free Zone Persons and members of Multinational Enterprise Groups (MNE Groups), which are groups of companies with operations in more than one country and consolidated group revenues exceeding AED 3.15 billion, will not be eligible for Small Business Relief.
The government of the UAE has announced a nine per cent tax on profits exceeding AED 375,000. When planning their finances and ensuring compliance with UAE tax laws, it is crucial for businesses to understand how to calculate their taxable corporate income.
Before calculating their corporate tax liability, businesses must determine their revenue according to the UAE’s accepted accounting standards. The Small Business Relief will apply to eligible small businesses with revenues below AED 3 million, and no corporate tax will be due. Profits exceeding AED 375,000 will be taxed at a rate of nine per cent for businesses with revenues exceeding AED 3 million.
Protecting Against Artificial Business Separation
The Ministerial Decision emphasizes that if the Federal Tax Authority (FTA) determines that taxable persons artificially separated their business or business activity to exceed the AED 3 million thresholds, such electing persons will be considered to have engaged in an arrangement to obtain a Corporate Tax advantage under Clause (1) of Article 50 of the Corporate Tax Law’s general anti-abuse rules.
Conclusion
The Small Business Relief is a significant step towards assisting SMEs and new businesses in the UAE. To make the most of this tax relief, it is highly recommended that businesses seek the expertise of a corporate tax advisory in Dubai. IMC Group, with years of experience handling tax matters for numerous businesses in Dubai, offers exceptional advisory services tailored to the unique needs of each client.
- NEWSLETTER,U.A.E
- May 5, 2023
The United Arab Emirates (UAE) Ministry of Finance has recently introduced several measures aimed at reducing the compliance burden for small businesses, government entities, and non-residents. These initiatives include Small Business Relief (SBR) under Article 21 of the Corporate Tax Law, Single Taxable Person (STP) treatment for government entities, and exemptions from tax registration for specific entities under Decision No. 43 of 2023. While a corporate tax advisory in Dubai can help you get the best out of the relief measures, below are the important points you need to understand.
Small Business Relief for Corporate Tax
To support small businesses and startups, the UAE Ministry of Finance has introduced SBR under Decision No. 68 of 2023, allowing eligible resident taxpayers to be treated as having no taxable income if their revenue falls below a specified threshold. To qualify for SBR, businesses must have revenues equal to or less than AED 3 million in the current and the previous tax period. The threshold applies to tax periods from June 1, 2023, to December 31, 2026. However, if a business’s revenue exceeds AED 3 million in any given tax period, SBR won’t be applicable.
Notably, certain businesses are excluded from SBR, such as qualifying free zone persons, non-resident branches of foreign companies, and group companies of MNE groups with consolidated revenues above AED 3.15 billion.
Businesses not utilizing SBR can carry forward tax losses and disallowed net interest expenses for future tax periods without SBR. Despite the relief, small businesses must still register for corporate tax with the Federal Tax Authority (FTA) and file corporate tax returns. SBR exempts eligible small businesses from Transfer Pricing Documentation requirements under Article 55.
Single Taxable Person Treatment for Government Entities
Decision No. 68 of 2023 allows government entities to treat all businesses and business activities they undertake as a Single Taxable Person (STP), reducing the compliance burden and administrative formalities. To qualify for STP status, the businesses and business activities must be conducted under a license issued by a Licensing Authority and should operate within the same Emirate for local governments.
When adding new businesses or business activities to an STP, they are directly treated as STP if the prescribed conditions are met. Notification to the FTA is required within 20 business days from the date of occurrence of such an event.
What is Corporate Tax? Why does the UAE introduce CT? When will the UAE CT regime become effective?
The Ministry of Finance has issued Decision No. 43 of 2023, providing exemptions from tax registration for specific entities under the Taxation of Corporations and Businesses (CT Law), Federal Decree-Law No. 47 of 2022. Entities exempt from corporate tax registration include:
- Government entities
- Government-controlled entities
- Persons engaged in extractive businesses or non-extractive natural resource businesses that meet the specified conditions under the CT Law
- Non-residents deriving only state-sourced income and not having a permanent establishment (PE) in the UAE
These exemptions relieve eligible organizations from the responsibility of tax registration and filing of corporate tax returns. Non-resident entities without a PE in the UAE are neither required to obtain corporate tax registration nor file a corporate tax return if they solely earn UAE-sourced income. This decision significantly reduces the compliance burden for non-residents.
How to Calculate the Payable Corporate Tax in the UAE?
In the UAE, corporate tax is calculated at 9% of net profit after all deductions and adjustments are made for exempted income. Foreign taxes will be deducted from the profit in the financial statements. Taxable income is the net profit after all deductions. Only if your taxable value is greater than AED 375,000 will you be charged the 9% corporate tax.
Conclusion
The introduction of SBR, STP treatment for government entities, and tax registration exemptions under Decision No. 43 of 2023 are positive steps for the UAE, as they reduce compliance burdens and support the growth of businesses in the region. Businesses should carefully consider whether to opt in or opt out of the relief schemes based on their specific circumstances and consult with corporate tax advisory professionals in Dubai for guidance. Moreover, organizations should assess their eligibility for these exemptions, maintain appropriate records, and stay updated on any future changes in the CT Law and related regulations to ensure continued compliance with UAE tax laws.
- Article, U.A.E
- April 25, 2023
Gulf SWFs and PE firms have substantial financial resources to support significant M&A activity.
The Middle East’s M&A sector experienced a deceleration in 2022, with both corporate and financial investors adopting a cautious stance due to surging interest rates and growing economic unease. Although M&A transactions sustained their robustness during the initial months of 2022, they lost momentum as the macroeconomic situation progressively worsened throughout the year.
The year 2022 has presented several economic and financial challenges that have made dealmaking a complex task on a global scale. Among the main obstacles has been the constricting credit environment, with banks limiting their funding for leveraged buyouts due to increasing interest rates and an overall aversion to risk. As a result, the issuance of leveraged loans to support private equity (PE) acquisitions have mostly come to a halt in Europe and the Middle East.
Despite the global challenges, the Middle East has experienced a modest decrease in the number of deals, from 366 in the first nine months of 2021 to 343 in the same period in 2022. The UAE, Saudi Arabia, and Israel were the most sought-after countries by buyers, with companies headquartered in these locations representing 20.7%, 9%, and 54.2% of the total deals in the region, respectively.
Amid the increasingly challenging economic climate, most M&A transactions in the Middle East were focused on recession-proof sectors, such as non-discretionary consumer goods and healthcare, while technology, media, and entertainment remained popular. Additionally, infrastructure deals proved to be a highlight in the region’s M&A activity.
Looking ahead to 2023, we anticipate a new dealmaking environment characterized by the same challenges that affected the market in the latter part of 2022. As a result, we expect the M&A sector to remain sluggish, particularly in the first half of the year. Despite this, the performance outlook, potential public-to-private opportunities, distressed situations, and lower valuations could present new avenues for dealmaking and unlock previously pent-up deals.
Nevertheless, in this increasingly complex environment, the timelines for completing deals are likely to be longer, and the risk of executing transactions successfully is higher.
Here are some potential trends that could shape the M&A market in the coming months:
Undeployed Reserves:
In the short-term, powerful corporate buyers may hold an edge, but the M&A market will still depend on sovereign wealth funds (SWFs) and financial sponsors, who have ample dry powder available for investment. As economic conditions shift, these funds will likely become more selective and focus on opportunities that enhance their existing portfolios or offer cash-generating potential. Despite a slowing fundraising pace, we anticipate that SWFs and financial sponsors will remain key players in the M&A market.
Small-scale acquisitions:
While financing options remain limited and large-scale opportunities are scarce, private equity firms and sovereign wealth funds may shift their focus towards smaller-scale bolt-on acquisitions. These types of acquisitions can add value to portfolios of SWFs and PEs, particularly when traditional growth channels are no longer viable, and exit routes become limited. During times of uncertainty, investing in familiar businesses and platforms may also prove to be a more sensible strategy for SWFs and PEs.
Mergers and acquisitions in distressed companies:
It is worth noting that, contrary to expectations, we did not observe a substantial increase in mergers and acquisitions involving financially troubled companies thus far in 2022. However, we anticipate this may change in 2023 as worsening economic conditions begin to pressure company balance sheets. This could lead to asset sales and operational restructuring, ultimately creating potential opportunities for mergers and acquisitions in distressed companies.
Divestitures:
We anticipate increased divestiture opportunities as economic conditions become more uncertain, causing larger companies and conglomerates to re-evaluate their strategies and shed non-essential assets. Moreover, activism investment remains a potent catalyst, with many investors able to establish positions at reduced prices during a downturn in the stock market. For SWFs and PEs, divesting non-core business units from their portfolio companies, while more intricate, may yield superior returns.
Environmental, Social, and Governance:
ESG factors are becoming an increasingly important consideration for both corporate and financial buyers in their M&A activities. This trend is expected to continue and gain momentum in 2023. Investors closely scrutinise targets’ ESG practices, including their impact on the environment, diversity and inclusion policies, and supply chain management. These factors are now essential components of investment decision-making and can have a significant impact on deal outcomes. They can also influence the availability and cost of financing, giving sponsors an advantage in securing debt funding.
In 2023, M&A buyers are expected to shift towards more resilient sectors in the face of economic headwinds, including non-discretionary consumer, healthcare, infrastructure, and specific sub-sectors within technology, media, and entertainment. These sectors are better positioned to withstand economic uncertainties due to strong demand, recurring revenue models, and the ability to mitigate rising operating costs arising from inflation. Moreover, the ongoing trend of digitalization across businesses will provide impetus to technology-related sectors. Infrastructure assets will also be a key focus, given their asset-heavy nature and ability to generate stable cash flows, thus providing downside protection.
- NEWSLETTER,SINGAPORE
- April 11, 2023
Singapore warmly welcomed Britain’s recent decision to become the first European country and the 12th member to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
As Britain sets its sights on bolstering its global alliances post-Brexit, the decision to ease company formation in Singapore is a clear signal of intent. With its reputation as a business-friendly destination, Singapore is a natural choice for British firms seeking to expand their global reach. This move is a crucial step towards that end, paving the way for closer ties between the two nations and a bright future for cross-border commerce.
Trade and Industry Minister Gan Kim Yong posted on LinkedIn to congratulate Britain on achieving a “significant milestone” after nearly two years of negotiations, expressing his joy over the country’s inclusion in the trade pact.
Mr Gan added, “The UK’s accession to the CPTPP will provide more business opportunities and make it easier for Singapore companies to navigate the UK market”.
He further stated that this move would enhance the robust bilateral economic partnership between the two nations, supported by multiple agreements such as the UK-Singapore Free Trade Agreement, the UK-Singapore Digital Economy Agreement, and the UK-Singapore Green Economy Framework.
Minister-in-charge of Trade Relations, Mr S. Iswaran, shared a similar view on LinkedIn.
“Singapore remains strongly committed to ensuring that CPTPP remains high-standard, robust and relevant so that it continues to bring benefits to our people and businesses”, Mr Iswaran stated. “I look forward to the UK’s accession to the CPTPP.”
Mr Gan stated that all members of the CPTPP will collaborate towards finalising the accession protocol.
Other members of the CPTPP are Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru and Vietnam.
In a joint ministerial statement, member countries said the CPTPP is “one of the most comprehensive and ambitious trade deals ever concluded”.
“The CPTPP members and the UK are committed to further promoting free trade, open and competitive markets, the rules-based trading system and economic integration in the region and beyond,” they said.
By joining the CPTPP, Britain will enhance its current bilateral free trade agreements with most member countries, providing businesses with additional options for trade terms.
According to British Prime Minister Rishi Sunak’s office, the agreement is the largest trade deal since Brexit, with a combined GDP of £11 trillion (S$18.1 trillion) once Britain becomes a member, which accounts for 15% of the global GDP.
Natalie Black, Britain’s Trade Commissioner for Asia-Pacific, highlighted that as the second-largest member of the CPTPP, Britain’s participation would increase the trade bloc’s combined GDP from its current £9 trillion and offer improved access to 67 million UK consumers.
“CPTPP is one of the world’s most progressive trade agreements, and the UK’s accession will take it from a Pacific agreement to a truly global one,” said Ms Black.
According to a statement released by the British High Commission in Singapore, Kemi Badenoch, the Secretary of State for Business and Trade, expressed the following: “Our accession to CPTPP sends a powerful signal that the UK is open for business and using our post-Brexit freedoms to reach out to new markets, including in the Asia-Pacific region, and grow our economy.
“Joining this influential trade bloc will help us to shape the rules of global trade with like-minded nations and work even closer together on our shared priorities of prosperity, security and free and fair trade.”
Kara Owen, the British High Commissioner to Singapore, reported that trade between Britain and Singapore increased by 24.8% from the previous year, with a total value of £20 billion during the 12 months leading up to September 2022.
“We continue to see very strong interest from UK companies in Singapore and the broader Asia-Pacific region,” said Ms Owen.
“Joining the CPTPP will further strengthen our existing agreements with Singapore to grow trade and investment. We look forward to supporting UK and Singapore companies as they take advantage of all it offers.”
- NEWSLETTER, INDIA
- April 11, 2023
India’s digital prowess is a global inspiration! The International Monetary Fund (IMF) confirms India’s “world-class digital public infrastructure” as a blueprint for digital transformation worldwide. In a recent working paper, the IMF praises India’s innovative approach and focus on building blocks, making its digital journey a resounding success.
“Build smart: Find the core, solve more!” – In India’s diverse land, the building block approach unlocks custom solutions with essential tools.
“Boosting India’s digital ecosystem with competition and compatibility! Open standards power the India Stack, enabling anyone to leverage its functions.”
India’s guiding principles in education and healthcare have transcended to other domains, like the ground breaking CoWIN platform for COVID-19 vaccination. Thanks to its digitally-driven approach, India effortlessly surged ahead in the race to administer vaccines, defying daunting hurdles such as mass-scale internal migration.
CoWIN’s innovative technology has been implemented in various countries like Indonesia, the Philippines, Sri Lanka, and Jamaica, enabling them to streamline their vaccination initiatives.
India realized IT’s pivotal role in shaping its identity layer. Earlier, numerous identity cards and databases existed, but none had the potential to serve over a billion citizens. Enter Aadhaar – the game-changer.
The government brought in a tech-savvy entrepreneur as the founder chairman to craft the ID system and empowered UIDAI to recruit top-skilled professionals for the project.
India’s digital revolution thrives on innovation! Its building block approach unlocks multiple solutions per block, while a vibrant ecosystem fosters competition and tailors solutions to local needs.
India Stack’s design sparks competition, breaks silos, and overcomes barriers to empower innovation and progress.
In a tweet, Louis E. Breuer, IMF’s Senior Resident Representative in India, commended India’s digital public infrastructure, citing its transformative impact on people’s lives. The paper concludes that other countries undergoing digital transformation can learn from India’s journey.
- NEWSLETTER,SINGAPORE
- April 11, 2023
By October 1, 2023, corporate finance (CF) advisers in Singapore are required to adopt new due diligence requirements. The objective behind implementing these new requirements is to enhance the quality and standards of corporate finance advisers in the city-state.
Deployment Plan
From October 1, 2023, all corporate advisory engagements in Singapore must comply with the due diligence requirements. In anticipation of this, MAS has advised CF advisers to begin formulating and executing policies that align with these new requirements.
To whom do the new requirements for business conduct apply?
The following are subject to the new conduct requirements:
- Banks that have obtained licenses, merchant banks, and finance companies are not required to hold a capital market services (CMS) license
- Individuals or entities who possess a CMS license and provide advice on corporate finance; or
- Persons who provide advice on corporate finance, including those who are representatives of options a) and b)
Requirements are related to the overall conduct of business activities
Under Notice SFA o4-N21, one of the newly introduced requirements for business conduct is this.
Dealing with conflicts of interests
Corporate finance advisers must avoid conflicts of interest with their clients. If they can’t mitigate material disputes, they must stop advising on that transaction or decline new projects.
To protect price-sensitive information its directors or personnel receive, a CF adviser should implement policies, controls, and procedures, including limited access to sensitive information and separating roles of those involved in corporate finance.
Policies, controls, and procedures must be implemented by a CF adviser to protect sensitive information received by its personnel, including limited access based on necessity and separating corporate finance advice from other roles.
The CF adviser should have policies, controls, and procedures to prevent insider trading and clear reporting lines for issue escalation with representative oversight.
Requirements for due diligence in general
The CF advisor is responsible for performing due diligence with reasonable care, which involves verifying the accuracy and completeness of statements and confirmations made by customers or others involved in the transaction.
The corporate finance advisor should also oversee any new information during the transaction that may question the credibility of the initial information received.
Providing guidance to listing applicants regarding their regulatory obligations
The CF advisor must inform listing applicants about their responsibilities under Singapore’s Securities and Futures Act, as well as their obligations upon admission to the Singapore Stock Exchange.
The corporate finance adviser must conduct background checks on listing applicant’s key personnel, directors, group entities, and controlling shareholders as per the notice.
Corporate finance advisers in Singapore must examine the physical assets of listing applicants and conduct interviews with significant stakeholders such as creditors and key suppliers. In the case of material issues, the adviser must scrutinize supporting documents such as invoices, contracts, and title deeds. They may also gather information from public record databases or delegate the relevant checks and reviews to a third party.
When appointing a third-party service provider, the corporate finance adviser must ensure that the third party’s due diligence meets satisfactory standards and quality.
The corporate finance advisor’s foremost responsibility is to ensure the Singapore Stock Exchange’s suitability of the listing applicant. This includes verifying the completeness of the listing application information and assessing the qualifications of the applicant’s directors in managing the business. The CF advisor plays a vital role in upholding due diligence requirements.
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