Exempt Private Company (EPC) mechanics — Eligibility and requirements checklist

Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

An exempt private company is a Singapore private company with no more than 20 members, none of which is a corporation holding a beneficial interest in its shares. The status, defined in section 4 of the Companies Act 1967, brings lighter filing obligations and, for many small EPCs, relief from filing full financial statements with the Accounting and Corporate Regulatory Authority.

What an exempt private company is

The exempt private company is not a separate type of entity; it is a private company limited by shares that meets the section 4 definition in the Companies Act 1967. The two conditions are that the company has 20 or fewer members and that no corporation holds a beneficial interest, directly or indirectly, in any of its shares. A company that later takes on a corporate shareholder or exceeds 20 members loses EPC status until it once again satisfies the test.

Who this is for

EPC status suits owner-managed companies, founder-run start-ups and small family businesses where the shareholders are individuals. Foreign founders often use it because it keeps administration light in the early years. If you are choosing between structures, our overview of Singapore tax and holding structures is a useful cross-reference, and foreign founders frequently pair incorporation with an Employment Pass application so a founder can relocate and run the company.

Eligibility and requirements checklist

To be and remain an EPC, the company must: be a private company limited by shares; have no more than 20 members; ensure no corporation holds a beneficial interest in its shares; maintain at least one director ordinarily resident in Singapore, as required by section 145 of the Companies Act 1967; appoint a company secretary within six months of incorporation under section 171; and keep a registered office in Singapore under section 142. An EPC that is also a “small company” under the Thirteenth Schedule to the Companies Act 1967 is exempt from audit if it meets at least two of three tests: revenue not exceeding S$10 million, total assets not exceeding S$10 million, and no more than 50 employees.

The key filing advantage

A solvent EPC is exempt from filing its financial statements with ACRA when lodging its annual return, provided it files a declaration of solvency. It must still prepare proper financial statements for its members and keep them available, and it must still file its annual return and meet its Inland Revenue Authority of Singapore corporate tax obligations. This is an administrative concession, not an exemption from preparing accounts.

Cost and timeline

Incorporating the private company through ACRA’s BizFile+ portal costs S$315 in government fees (S$15 name application plus S$300 incorporation) and is usually completed within one to three working days once details are ready. Ongoing annual costs for an EPC, covering corporate secretarial support, registered office and annual return filing, commonly run from about S$800 to S$2,000 depending on complexity. Audit fees are avoided while the small-company exemption applies.

The step-by-step process

Reserve the company name via BizFile+. Prepare the constitution, appoint at least one resident director and the initial shareholders, and confirm the registered office. Incorporate through BizFile+. Within six months, appoint a qualified company secretary. Open a corporate bank account. Hold the first annual general meeting or dispense with it where permitted, file the annual return, and, if solvent and eligible, lodge the solvency declaration to claim the financial-statement filing exemption.

Common mistakes and gotchas

The most common error is inadvertently losing EPC status by admitting a corporate shareholder, for example when a holding company is inserted, which then requires full financial statements to be filed. Others include missing the six-month deadline to appoint a company secretary, failing to keep the register of members accurate as it approaches 20 members, and assuming EPC status removes the duty to prepare accounts, which it does not. Our related guide on redomiciling a foreign company to Singapore covers what changes for companies migrating in.

EPC status versus ordinary private company

Every exempt private company is a private company, but not every private company is exempt. The difference is the section 4 test: 20 or fewer members and no corporate shareholder holding a beneficial interest. The practical payoff is twofold. First, a solvent EPC can be exempt from filing its financial statements with ACRA, keeping its financial position out of the public record. Second, the EPC label sits alongside, and is often combined with, the small-company audit exemption, so a typical owner-managed EPC neither files public accounts nor pays for an audit while it stays within the thresholds.

The small-company audit exemption in practice

Audit exemption is separate from EPC status and flows from the Thirteenth Schedule to the Companies Act 1967. A company is a small company if it is private and meets at least two of three tests in each of the last two financial years: revenue of no more than S$10 million, total assets of no more than S$10 million, and no more than 50 employees. Within a group, the group as a whole must also be small. Crossing the thresholds for two consecutive years brings the audit requirement back, so growing companies should watch the trend rather than a single year’s figures.

Ongoing compliance an EPC still owes

Lighter filing does not mean no compliance. An EPC must still keep proper accounting records, prepare financial statements for its members, hold or dispense with its annual general meeting, file its annual return on BizFile+, maintain statutory registers including the register of registrable controllers, and meet its corporate tax obligations with the Inland Revenue Authority of Singapore, including the estimated chargeable income filing and the annual Form C-S or Form C. The resident director and company secretary requirements continue throughout.

Worked example

Take a two-founder software company with S$1.5 million revenue, S$400,000 in assets and eight staff, wholly owned by the two individuals. It satisfies the section 4 EPC test and the small-company thresholds, so it files no public accounts and needs no audit. Its annual compliance cost, corporate secretarial support, registered office and the S$60 annual return fee, might total around S$1,200 to S$1,800. If it later brings in a corporate investor through a holding company, it loses EPC status and must file financial statements with ACRA, a change founders should price in before restructuring their cap table.

Planning for growth

Founders should treat EPC and small-company status as temporary advantages of the early stage. As the company approaches 20 members, brings in institutional investors, or crosses the revenue or asset thresholds, both the public-filing exemption and the audit exemption can fall away. Anticipating the transition, by budgeting for an audit and public accounts before they become mandatory, avoids a scramble in the year the company scales.

FAQs

How many shareholders can an exempt private company have?
No more than 20, and none of them may be a corporation holding a beneficial interest in the company’s shares, per section 4 of the Companies Act 1967.

Does an EPC need to be audited?
Not if it qualifies as a small company under the Thirteenth Schedule to the Companies Act 1967, meeting at least two of: revenue up to S$10 million, assets up to S$10 million, and up to 50 employees.

Can an EPC avoid filing financial statements with ACRA?
A solvent EPC can be exempt from filing its financial statements with ACRA if it lodges a declaration of solvency, though it must still prepare accounts for members and file its annual return.

Can a foreigner own an exempt private company?
Yes. Foreign individuals can fully own an EPC, but the company must have at least one director ordinarily resident in Singapore.

What happens if a corporate shareholder comes in?
The company loses EPC status and must comply with the ordinary private-company filing rules, including filing financial statements with ACRA where required.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.