One of the most common administrative tasks for a growing company is the Transfer of Shares.

Whether you are bringing in a new investor, buying out a co-founder, or transferring shares to a holding company, the process is not as simple as “just updating ACRA.”

In Singapore, share transfers involve two government bodies (IRAS and ACRA) and a tax called Stamp Duty. If you miss the Stamp Duty deadline, you face penalties of up to 400%.

In this guide, we break down the compliant way to transfer shares in a Private Limited Company.

Step 1: The Paperwork (Instrument of Transfer)

Transfer of Shares Singapore Process Flowchart IRAS Stamp Duty ACRA

You cannot just log in to SingPass and change the name. You must first have the legal documents in place.

  1. Directors’ Resolution: The Board of Directors must approve the transfer.

  2. Instrument of Transfer: This is the legal form signed by the Transferor (Seller) and Transferee (Buyer).

  3. Notice of Transfer: A formal notice sent to the company secretary.

  4. Waiver of Pre-emption Rights: If your Company Constitution states that existing shareholders have the “first right of refusal,” they must sign a waiver allowing the transfer to a new outsider.

Step 2: Paying Stamp Duty (The IRAS Requirement)

This is the step most DIY business owners forget. Before you can update ACRA, you must pay Stamp Duty to IRAS.

  • The Rate: 0.2% of the Purchase Price OR the Net Asset Value (NAV) of the shares, whichever is higher.

  • The Deadline: You must pay within 14 days of signing the transfer document.

  • The Penalty: Late payment attracts a penalty of up to 4 times the duty amount.

Example: If you sell shares for $1.00, but the company’s Net Asset Value (based on its bank balance) is $100,000, you pay tax on the $100,000.

  • Tax = 0.2% x $100,000 = $200.

Step 3: Updating ACRA (The Final Step)

Only after the Stamp Duty Certificate is generated can we update the Electronic Register of Members (EROM) on ACRA.

  • Who files this? Your Company Secretary.

  • Effective Date: The transfer is only legally effective once it is lodged with ACRA.

  • New Share Certificate: Your Secretary will cancel the old certificate and issue a new one to the buyer.

Common Myths vs. Reality

  • Myth: “I can just give my shares to my wife for free, so no tax.”

    • Reality: Even if the price is $0 (Gift), Stamp Duty is payable based on the Market Value (NAV) of the shares.

  • Myth: “I can backdate the transfer.”

    • Reality: Backdating is illegal and will trigger late stamping penalties from IRAS.

Conclusion: Don’t DIY Your Equity

Share transfers affect the legal ownership of your company. A mistake here can cause disputes during an audit or a future sale of the business.

At Excellence Singapore, our Corporate Secretarial Team handles the entire end-to-end process. We draft the resolutions, calculate the Stamp Duty, and file with ACRA to ensure your ownership records are perfect.

Need to transfer shares? Contact us for a Share Transfer Quote.