SINGAPORE Law and Practice Contributed by: Dorothy Marie Ng, Monica Yip, Tay Peng Cheng and Tan Shao Tong, WongPartnership LLP
the rate of 9% with effect from 1 January 2024. The sale and purchase of residential property is exempt from GST. 2.11 Legal Restrictions on Foreign Investors As mentioned in 2.2 Laws Applicable to Trans- fer of Title , the Residential Property Act 1976 sets out restrictions on foreign ownership of residential property in Singapore, but there are some exemptions. Non-Singaporeans and non- Singapore entities may acquire approved con - dominium units or flats. Subject to other rules, foreign developers may acquire residential prop - erty for the purpose of developing it for sale. Acquisitions of commercial real estate are tradi - tionally financed by loans from banks and finan - cial institutions. Notwithstanding interest gen - erated by crowdfunding – and, in some cases, direct lending of debt funds, particularly to small and medium-sized enterprises – direct bank lending and corporate debt issuance remain the predominant sources of financing for large com - mercial acquisitions. 3.2 Typical Security Created by Commercial Investors 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate An investor (who is the borrower) will typically grant a mortgage on real estate to a lender or lenders. Where separate title to real estate has been issued, an investor may provide security by way of a mortgage, which will be registered against the title in the land register.
Where separate title has not been issued, an investor may provide security by way of an assignment of rights under the relevant contract for sale (eg, a building agreement or a sale and purchase agreement in respect of real estate). The assignment of the contract will be executed together with a mortgage over real estate, which is executed in escrow and held by the lender until separate title to the real estate has been issued, when the mortgage is then registered. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders Generally, Singapore companies are not restrict - ed from providing security over real estate to for - eign lenders, nor from making loan repayments to a foreign lender, and there are no exchange controls in Singapore. However, the title to some leasehold real estate may require the lenders or mortgagees to be financial institutions permit - ted under the laws of Singapore to lend to the borrower. Financing in the context of the “lending of mon - eys” is a regulated activity subject to the juris - diction of certain statutes. Express approval will have to be obtained if a foreign lender who is not licensed under the Banking Act 1970 or the Monetary Authority of Singapore Act 1970 engages in the lending of moneys. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Stamp duty is payable where security is created over real estate or shares, subject to a cap of SGD500. A registration fee is payable for the registration of the mortgage. 3.5 Legal Requirements Before an Entity Can Give Valid Security Under the Companies Act 1967 (CA), a public company or a company whose holding company
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