SINGAPORE Law and Practice Contributed by: Renu Menon, May Ng, Blossom Hing, SC and Ong Ken Loon, Drew & Napier LLC
Commercial and industrial property Foreign ownership of commercial and industrial prop- erty is less restricted but still requires adherence to specific regulations. Foreign entities may acquire such properties, although there may be additional require- ments under the Planning Act 1998. Water Rights Water rights are primarily governed by the Public Utili- ties Act 2001, which does not explicitly limit foreign entities but requires compliance with local laws and regulations regarding the construction, operation, and usage of water resources, among others. One exam- ple would be the water agreements entered into by the state of Johore and the City Council of Singapore. Lenders and Remedial Rights Foreign lenders can hold security interests in real property and exercise remedial rights, such as enforc- ing liens on properties. However, any enforcement action must comply with Singapore law, including the Land Titles Act 1993 and the Conveyancing and Law of Property Act 1886. 8.5 Structuring Deals Legal Form of the Project Company Project companies in Singapore are typically struc- tured as private limited companies (Pte. Ltd.) due to limited liability benefits and favourable tax treatment. Joint ventures are also common for large projects in Singapore including government sector projects as some project tenders require a Singaporean joint ven- ture partner to be involved for greater accountability to mitigate risks. There are generally no restrictions to the legal form of the project company, as long as it is validly incorpo- rated under the Companies Act 1967 and complies with the statutory registration requirements, filing and disclosure requirements. There could be ownership and control restrictions over certain companies if the entity conducts business in areas where it could affect the national security interests. The Ministry of Trade and Industry Singapore recently introduced the Sig- nificant Investments Review Act 2024 to delineate the entities that could potentially be affected.
Parties should also consider issues pertaining to goods and services tax as well as withholding tax issues when structuring a project company, particu- larly for projects with onshore/offshore construction elements. Regulation and Compliance There are specific regimes and requirements for vari- ous types of construction and related work in Singa- pore. For instance, the provision of architectural and professional engineering service is regulated by stat- ute, primarily under the Architects Act 1991 and the Professional Engineers Act 1991. Builders who carry out building works for public or private sector con- struction projects are also required to hold a builder’s licence under the Building Control Act 1989. Restrictions on Foreign Investment As noted above, foreign ownership of residential prop- erty is restricted by the Residential Property Act 1976. The MAS may impose certain restrictions or require- ments on foreign entities, especially in sectors deemed sensitive, such as telecommunications and media. The MAS also oversees financial institutions and enforces regulations related to banking and financial services. Foreign investors must ensure compliance with MAS regulations, particularly if financing involves local banks or financial institutions. Relevant Treaties Bilateral Investment Treaties (BITs) Singapore has entered into numerous BITs that pro- vide protections for foreign investors, including pro- visions for fair and equitable treatment, protection against expropriation and access to international arbitration. Double Tax Agreements (DTAs) Singapore has signed DTAs with various countries to prevent double taxation on income, which can be ben- eficial for structuring project financing.
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