A “flip” puts a new Singapore company on top of your existing business. Your current company becomes its subsidiary, and your shareholders become shareholders of the Singapore company instead. Founders from India, Indonesia, Vietnam, the Philippines and elsewhere in the region are regularly asked to do this by incoming investors, who want a familiar legal system, standard venture documents and a clean exit route.
Futurebooks has acted as company secretary on flips from across the region. This is how one normally runs.
Step 1: Incorporate the Singapore holding company
Incorporation takes days, and founders do not need to travel. The company needs at least one director who is ordinarily resident in Singapore, a registered office address and a company secretary. If no founder lives here yet, a nominee director fills the residency requirement until one does.
Our Founder Setup package covers this step: the holding company incorporated with its cap table and shareholders’ agreement ready for the share swap.
Step 2: Swap the shares
Shareholders of the operating company transfer their shares to the holding company and receive holding company shares in return, in the same proportions and with the same class rights. Afterwards the cap table looks the same, one level up.
- Valuation. The shares issued need a value, usually the operating company’s net assets or an independent valuation.
- Home-country tax. This is the step that can trigger capital gains tax, stamp duty or foreign-exchange approvals where the operating company is based. Indian founders in particular need to work within India’s overseas investment rules and take Indian tax advice before any swap. Get local advice first; the Singapore side is the easy part.
- Options, notes and SAFEs. Employee options and convertible instruments are replaced with equivalent rights in the holding company. For the option plan, see how to set up an ESOP in a Singapore company.
Step 3: Decide where the intellectual property sits
Investors usually want the IP owned by the company they are investing in. That means an assignment from the operating company to the holding company, and a licence back so the operating company can keep using it. Both need to be priced at arm’s length, and the transfer can itself be taxable at home.
Step 4: Open a bank account
Several banks now open accounts for new companies without a visit, though some still ask to meet a director. Expect detailed questions about the group, its shareholders and the source of funds. Having the incorporation documents, the group chart and the term sheet ready shortens the process.
Step 5: Give the holding company real substance
A Singapore company is tax resident here only if its control and management are exercised in Singapore, which in practice means board meetings where strategic decisions are made. Residence matters for treaty benefits on money coming up from the operating company, and for obtaining a Certificate of Residence from IRAS.
Substance now matters at exit too. Since 2024, gains from selling foreign assets can be taxed when received in Singapore by a company that belongs to a multinational group and lacks adequate economic substance here. A holding company with a real board, real decisions and some activity in Singapore is in a much stronger position than a shell.
Step 6: Move the founders, if needed
Some investors want at least one founder based in Singapore. That means an Employment Pass or, for some founders, the ONE Pass, with a salary the new company can show it is able to pay. See how much a founder should pay themselves and our employer’s guide to the Employment Pass.
Step 7: Close the round
With the structure in place, the holding company signs the subscription agreement and shareholders’ agreement, adopts a new constitution if a new share class is being created, obtains pre-emption waivers, issues the shares and files the allotment with ACRA. Board changes are filed at the same time.
After the flip
The holding company has its own annual cycle: financial statements, an annual general meeting or the paperwork to dispense with one, an annual return to ACRA and a corporate tax return to IRAS. It will usually need consolidated accounts for the group. Companies that plan to hire or invoice customers in Singapore often add a separate Singapore operating company to keep trading risk away from the parent.
Planning a flip?
Futurebooks incorporates the holding company, provides the resident director, registered office and company secretary, prepares the share swap and funding-round resolutions, and looks after the accounts and tax afterwards. We work alongside your lawyers and your advisers at home. Tell us where you are in the round.
This article is general information, not legal or tax advice. It covers the Singapore side only; the tax and regulatory position in the operating company’s country needs local advice. Based on the Companies Act 1967 and IRAS guidance as at November 2026.