SINGAPORE LAW AND PRACTICE Contributed by: Jeffrey Lim, Daniel Lim, Frederick Tay, Genevi Lim, Lakshmanan Anbarazan, Sarah Lai, Stephanie Goh and Tobias Andreas Satria, Joyce A. Tan & Partners LLC
Given (i) the costs required to list such securities, as well as (ii) the higher regulatory and disclosure require - ments for listed companies, capital markets fundrais - ing is often more suitable for mid-to-large companies. For SMEs and early-stage companies, financing is usually done through bank loans, and private invest - ments (see 3. Mergers and Acquisitions ). Bank loans provide for more readily available funds at the cost of interest while private investments provide flexibility and strategic contributions from investors at the cost of potential dilution. Start-ups will usually seek a hybrid of both equity and debt financing as start-up founders typically want to retain control without being too heavily leveraged, which could deter future investors from investing. 5.2 Securities Regulation All offers of securities (including shares) in Singapore are subject to the requirement to lodge and register a prospectus with the Monetary Authority of Singapore unless such offers fall under an exemption. Common exemptions include: • offers to institutional investors: eg, financial institu - tions, government-owned entities; • offers to accredited investors: eg, investors with net personal assets greater than SGD2,000,000; • private placement: no more than 50 persons within any 12-month period; or • small offers: total amount raised is less than SGD5,000,000 within any 12-month period. Singapore generally allows 100% foreign ownership and treats foreign and domestic investors equally save for sector-specific restrictions (see 8. Other Review/ Approvals ) and restrictions relating to national security issues (see 7. Foreign Investment/National Security ). 5.3 Investment Funds Foreign investors choosing to invest in Singapore through investment funds would not be subject, nor would such funds be subject, to any additional regula - tory approvals.
Such investment funds are assumed to be managed by regulated fund managers and to have complied with general requirements under Singapore law, as the case may be. Notwithstanding the above, depending on the struc - ture of the investment funds and the foreign investor’s interest in the fund, such FDI through investment funds may potentially trigger sector-specific restrictions (see 8. Other Review/Approvals ) or restrictions relating to national security issues (see 7. Foreign Investment/ National Security ). 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview Singapore’s merger control regime is set out in the Competition Act 2004 and administered by the Con - sumer Commission of Singapore (CCCS). Save for lim - ited prescribed exceptions, the Competition Act 2004 generally prohibits any merger that has resulted, or may be expected to result, in a substantial lessening of competition in any Singapore market. This applies even if the merger or parties are located abroad pro - vided that Singapore markets are affected. Under the Competition Act, a merger is deemed to occur where: • two or more previously independent undertakings merge; • one or more persons or undertakings acquire direct or indirect control of the whole or part of other undertakings; or • the acquisition by a first undertaking of the assets of the second undertaking places the first under - taking in a position to replace or substantially replace the second undertaking in the business in which the second undertaking was engaged imme - diately before the acquisition. Notification to the CCCS is voluntary and non-sus - pensory. As a result, an M&A transaction may close without clearance from the CCCS. The CCCS recom - mends notification where the merged entity’s market share is ≥40% or if the market share of the top three
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