CMS Expert Guide for taking security in Singapore

Yes, personal and corporate guarantees can be granted to secure specific or all obligations of another entity or person under Singapore law.

No.

Yes.

Yes, subject to the considerations listed in Question 4.

Financial Assistance:

The provision of financial assistance (which includes the giving of guarantees) by a Singapore-incorporated public company (or a subsidiary of a Singapore-incorporated public company) in connection with the acquisition or proposed acquisition of shares in that Singapore-incorporated public company, or the acquisition or proposed acquisition of shares in a subsidiary of that Singapore-incorporated public company, is restricted under Singapore law. 1 Such companies may not provide loans, give guarantees, provide security, release obligations, release debts or take other similar actions. 2 Non-compliance will cause its officers to be in breach and liable for an offence.

Notwithstanding these restrictions, it is possible to provide the guarantees following the conclusion of a “whitewash” procedure.

Private companies, which are not subsidiaries of public companies or have a public company as its ultimate holding company, are not subject to this restriction.

Transfer Pricing:

Where related parties transact with each other, they must do so in an arms-length manner that reflects the prevailing market conditions. If the transaction is not priced in a manner equivalent to what unrelated parties would have charged in the parties’ shoes, there could be adverse tax consequences. 3

Corporate Benefit:

The grant of a guarantee by a company must be made bona fide in what the directors consider to be in the best interests of that company. This requirement remains relevant to companies granting upstream or lateral guarantees to secure the obligations of another company, even if that company is part of the same corporate group as the company providing the guarantee. This follows the fiduciary duties of directors to act completely in the best interests of the company.

The shareholders of the company can challenge the validity of the guarantee if it is not in the best interests of the company. To overcome this concern, a shareholders’ resolution, specifically approving the grant of the guarantee, should be passed to satisfy the corporate benefit requirement.

Guarantees must be in writing and signed by the guarantor or its agent. 4 It is usual for Singapore law guarantees to be executed in “wet ink” as deeds.

If a guarantee is being granted by a company, board resolutions approving the company’s entry into the guarantee should be passed

Guarantees should be translated to English language if written in a foreign language.

Under Singapore law, there are no requirements for notarisation or legalisation of a Singapore law-governed guarantee.

Yes, as long as the provisions expressly states that the guarantee/security secures the future obligations.

Yes, obligations under a guarantee are secondary, being contingent on the existence and validity of an underlying principal obligation. Obligations under a guarantee are therefore enforceable only upon the default of the party owing the principal obligation (the principal debtor). 5

Indemnities are recognised under Singapore law and are conceptually distinct from guarantees. Unlike guarantees, an indemnity imposes primary obligations on the giver of the indemnity that are independent from the principal debtor’s default. If the principal debtor’s obligations are void, unenforceable or cease to exist, the indemnity giver continues to be liable for its contractual indemnity.

It is usual in Singapore for guarantees to also incorporate indemnity provisions.

Security can also be expressed to continue notwithstanding the non-existence or invalidity of the underlying obligations, which are secured.

Yes, a guarantee/security can remain continuing as long as the obligations remain outstanding.

Yes, subject to the considerations listed in Question 4.

Under Singapore law, trust and agent structures are recognised when granting security. Parties can therefore designate a security trustee or security agent to hold security for the lenders.

Parallel debt structures are not used in Singapore law documents.

If the guarantee/security is granted directly in favour of specifically named creditors, the rights conferred by the security package can be assigned (or the rights and obligations under the security package can be transferred by novation) to a new creditor if the security documents do not restrict assignments/transfers (i.e. contain any non-assignment provisions).

If the security was registered in the companies registry, there may be a need to update the registry filing.

If the guarantee/security is granted in favour of a security trustee/security agent who holds the guarantee/security in favour of a potentially changing group of creditors, no specific action to transfer the guarantees/security is normally required.

If the scope of the existing guarantee/security is wide enough to guarantee/secure the amended obligations, there is technically no need to make any change to the security package, although it would be best practice to obtain a confirmation of the guarantee/security.

If the changes mean that the existing security does not extend to the full extent of amended obligations (e.g. the guaranteed/secured liabilities extend beyond what was contemplated by the existing guarantee/security), the existing guarantee/security documents should (i) in the case of a guarantee, be replaced with a fresh guarantee covering the expanded obligations; and (ii) in the case of a security document, supplemented by a fresh security document, while leaving the original security document in place.an asset, that security interest must be governed by the law of the place where the asset is situated (lex situs). Therefore, South African law will apply to agreements creating security interests over assets located in South Africa.

No, there are no legal restrictions.

In general, the following are practiced (although this is not a strict legal requirement):

for guarantees, the governing law of the guarantee usually follows the jurisdiction in which the guarantor has significant assets; and
for security documents, the governing law usually follows the jurisdiction in which the assets are situated (either physically, or are deemed by law to be situated, such as in the case of security over contractual rights or receivables).

No, this is a matter for agreement between the parties.

It would, however, be unusual for a security agreement to be subject to arbitration, since arbitration would be largely ineffective if the security provider chooses to be uncooperative during an enforcement scenario, as compared to judicial enforcement of the security.

No.

If a transaction was made at an undervalue within three years of a company undergoing liquidation or commencing judicial management, the liquidator or judicial manager of that company may apply to court to have the transaction set aside.

If the transaction gave an unfair preference to any person within:

two years of the company undergoing liquidation or commencing judicial management, if the person with whom the transaction was made is connected with the company; or
one year of the company undergoing liquidation or commencing judicial management, if the person with whom the transaction was made is not connected to the company,

The liquidator or judicial manager may apply to court to have the transaction set aside.

a. bank accounts;	Yes.
b. receivables;	Yes.
c. IP rights;	Yes.
d. shares (public or a private company, listed or not listed);	Yes.
e. rights in a company (other than shares);	Yes.
f. insurance rights;	Yes.
g. inventory (goods in turnover);	Yes.
h. equipment/plant/machinery/other movables;	Yes.
i. goodwill;	Yes.
j. real estate property (other than land);	Yes.
k. land;	Yes.
l. objects under construction (object of unfinished construction);	Yes.
m. lease rights to real estate, including land;	Yes.

Yes. Formalities and perfection requirements for specific classes of assets must be complied with.

Floating security is possible via a floating charge, typically established through security documents such as debentures.

Control of the secured assets by the security provider is the key consideration in determining if security over an asset is fixed or floating and the court ultimately retains the final discretion in determining whether a security interest is fixed or floating, as a question of fact and law.

Yes, subject to the considerations listed in Question 4.

No. Under Singapore law, there are no requirements for notarisation of security documents.

The following categories of charges, which are created by Singaporean companies or Singapore registered branches of foreign companies, must be registered:

a charge to secure any issue of debentures;
a charge on uncalled share capital of a company;
a charge on shares of a subsidiary of a company which are owned by the company;
a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale;
a charge on land wherever situated or any interest in the land but not including any charge for any rent or other periodical sum issuing out of land;
a charge on book debts of the company;
a floating charge on the undertaking or property of a company;
a charge on calls made but not paid;
a charge on a ship or aircraft or any share in a ship or aircraft;
a charge on goodwill, on a patent or licence under a patent, on a trade mark, or on a copyright or a licence under a copyright or on a registered design or a licence to use a registered design.

Such registration must be completed within 30 days of the charge’s creation if the document creating the charge is executed in Singapore, or 37 days after creation if the document creating the charge is executed outside Singapore.

Failure to register will render the charge void against the liquidator and any creditor of the company. Failure to register is also an offence, and company officers may be liable for a fine up to SGD 1000.

Security over certain assets (particularly assets such as land, ships, aircraft and scripless shares where title to that asset is entered into a register) have specific registration requirements depending on the form of security being created.

Registration is done on a one-off basis and renewal of registration is not required.

A separate regime for registration applies to security created by individuals or non-incorporated entities (e.g. traditional partnerships) over physical assets, under the Bills of Sale Act 1886. The rules are complex, and we would be happy to advise on these separately.

No. However, if the security needs to be registered, registrations are done through online forms in the English language. Thus, it is recommended to have an English translation of the document.

If a non-English language document is to be admitted in evidence in Singapore courts, it will need to first be translated into English by a court-approved translator.

a. bank accounts;	The security provider must give a notice of charge/assignment to the bank to protect priority in favour of the lender. However, the bank's acknowledgment of the notice is not a requirement for perfection of the security under Singapore law.
b. receivables;	If giving security via statutory assignment: The assignment must be absolute, must not merely transfer an equitable interest, must not be expressed to be “by way of security”, and must be in writing. The assignor must give written notice of the assignment to the person(s) against whom any assigned right is exercisable. There is no requirement for acknowledgement of the notice to be obtained. If these conditions are not met, the assignment may only take effect as an equitable assignment. Unlike statutory assignments, in which the assignee may enforce its assigned rights in its own name, an equitable assignee intending to enforce its assigned rights must join the assignor to the action. An assignment of receivables granted by a Singapore company, or a foreign company registered in Singapore, is registrable as a charge. If a fixed charge/floating charge mechanism is used, the security provider must give a notice of charge to the bank to protect priority in favour of the lender. There is no need for the bank's acknowledgment of the notice to perfect the security.
c. IP rights;	Various formality requirements apply to the granting of security over IP rights: An assignment of copyright must be in writing and signed by or on behalf of the assignor. An assignment or mortgage of a patent or patent application must be in writing and signed by or on behalf of the parties to the transaction. An assignment of a trademark must be in writing and must be signed by or on behalf of the assignor or its personal representative. An assignment of a registered design must be in writing and must be signed by or on behalf of the assignor or its personal representative.
d. shares (either of a listed company or a private company);	No special requirements other than registration (see item 20.2).
e. rights in a company (other than shares);	No special requirements other than registration (see item 20.2).
f. Insurance rights;	If giving security via statutory assignment: The assignment must be absolute, must not merely transfer an equitable interest, must not be expressed to be “by way of security”, and must be in writing. The assignor must give written notice of the assignment to the person(s) against whom any assigned right is exercisable. There is no requirement for acknowledgement of the notice to be obtained. If these conditions are not met, the assignment may only take effect as an equitable assignment. Unlike statutory assignments, in which the assignee may enforce its assigned rights in its own name, an equitable assignee intending to enforce its assigned rights must join the assignor to the action. If a fixed charge/floating charge mechanism is used, the security provider must give a notice of charge to the bank to protect priority in favour of the lender. There is no need for the bank's acknowledgment of the notice to perfect the security.
g. Inventory;	No special requirements other than registration (see item 20.2).
h. Equipment/plant/machinery;	No special requirements other than registration (see item 20.2).
i. Goodwill;	No special requirements other than registration (see item 20.2).
j. Real estate property (other than land);	No special requirements other than registration (see item 20.2).
k. Land;	No special requirements other than registration (see item 20.2).
l. Objects under construction (object of unfinished construction).	No special requirements other than registration (see item 20.2).
m. lease rights to real estate, including land;	No special requirements other than registration (see item 20.2).

No. While registration provides general notice to the world of the existence of a security interest, it may not provide notice of the specific terms of the security interest.

In Singapore, the charged security to be registered first will gain priority over the subsequent charged and registered securities.

However, creditors may enter into contractual arrangements (i.e. intercreditor agreements) to regulate the order of priority of their security interests.

Under common law, the priority of security is as follows:

Between two competing security interests of the same type (a fixed charge against another fixed charge), the earlier security interest will have priority.
Between a fixed charge and a floating charge, the fixed charge has priority.
Where the two competing security interests are fixed charges, a legal fixed charge will have priority over an equitable fixed charge.

Establishment of security and level of security regulation is generally:

Security is easily established / registered and encumbrances are easily checked.

While the e-signing of documents is generally valid, it is advisable that security documents be signed in wet ink. E-signatures are recognised in Singapore and generally considered sufficient to satisfy requirements for a signature if certain requirements are met.

However, certain documents and transactions are expressly required to be physically signed in wet ink. These include documents involved in the creation, performance or enforcement of an indenture, declaration of trust or power of attorney. Similarly, mortgages over land, which involve the transfer of interest in immovable property or share transfer forms, which involve the transfer of shares must be executed in wet ink.

As security documents usually contain powers of attorney, these would therefore need to be executed in wet ink.

In addition, guarantees and security documents are usually executed as deeds, and it is unclear if, under Singapore law, deeds (as a general class) may be executed electronically, as the common-law requirement for a deed to be in writing on paper or parchment has not been clearly or specifically disapplied, nor has this issue come before the Singapore courts for adjudication.

As such, we recommend that parties execute guarantees/security documents in wet ink.

Yes, for certain forms of security and in respect of Singapore-incorporated companies or registered Singapore branches of foreign companies only. Registered charges appear against the company’s entry in the Register of companies maintained by the Accounting and Corporate Regulatory Authority (ACRA).

However, not all forms of security will be reflected in public registers. For instance, guarantees are not registrable and will not be reflected in public registers. In addition, because only certain types of security attract registration, there are categories of security which are not required to be registered (e.g. security over shares in a company which is not a subsidiary, with no security over dividends or other related rights).

Furthermore, since registration of security is not required for charges granted by foreign obligors, the ACRA register would not reflect charges over Singapore assets granted by foreign obligors.

As market practice, the lender registers the security on behalf of the chargor/security provider.

A letter of authorisation is electronically signed by the security provider to authorise the lender to register the security.

a. Application for registration	With respect to the charged security, a statement containing particulars of charge is generally submitted. Application for registration is done through an online form on the ACRA’s website.
b. Security/guarantee document	Security – yes Guarantee – no
c. Principal obligation agreement	No.
d. Title documents to the collateral	No.
e. Other	N/A.

Quick – within 15 minutes for both charges against a company and encumbrances on land.

Price: low

For charges, the cost will be SGD 5.50 (roughly EUR 4).
For land titles, the cost will be SGD 54.25 (roughly EUR 37) 6

Quick –

For registration/amendment/ satisfaction of charges, within 15 minutes of submission.

Low –

For registration of charges, the cost will be SGD 60 (roughly EUR 41).
For variation/amendment of any registered charge, the cost will be SGD 60 (roughly EUR 41).
Deregistration/removal of registered charges is free.

N/A.

Stamp duty is usually payable on security documents creating interests in immovable property (e.g., land), stocks, or shares.

The maximum fee of a stamp duty is SGD 500 (approximately EUR 350). Such stamping is required within 14 days of the execution of a document (if it is executed in Singapore) or 30 days after being brought into Singapore (if it is not executed in Singapore).

If Singapore stamp duty has indeed not been paid on the security document but there is an intention to tender it as evidence in a Singapore court, Singapore stamp duty can be paid late. However, a late stamping penalty will then apply. The amount of the late stamping charge (for a document which is stamped more than three months from its due date) is a minimum of SGD 25 or 5% per annum calculated on a daily basis on the stamp duty payable, whichever is greater.

Yes. This is usually defined as an event of default under the “Non-payment” provision in the facility agreement.

Other grounds are defined under the term “Event of Default” in the facility agreement.

Security becomes enforceable when an Event of Default occurs and is continuing.

No.

Yes. Additional documents may be required in certain circumstances.

For instance, when a chargor grants a charge over shares, share certificates and a blank, signed and undated share transfer form are usually provided to the chargee – this enables the chargee to effect the share transfer without applying to court.

With regards to enforcement of security (such as bank accounts, receivables including specified contracts and insurances), the chargee is required to inform the relevant party of such enforcement via a notice.

Yes. This applies if parties have agreed in the security document or separate agreement.

The value of collateral may be agreed in the security agreement.

Yes. This applies if parties have agreed in the security document or separate agreement.

The sale price and valuation mechanism are not regulated under the law. The lender is entitled to choose when to sell the collateral and need not wait until the potential sale price improves before selling it. However, the lender is under a duty to act in good faith and take reasonable steps to obtain a fair price when exercising a power of sale.

No.

It is common for the creditor to have the option to appoint a receiver once security becomes enforceable.

Yes. POAs can be used to facilitate out-of-court enforcement but are not mandatory.

a. bank accounts;	Yes, not mandatory.
b. receivables;	Yes, not mandatory.
c. IP rights;	Yes, not mandatory.
d. shares (either of a listed company or a private company);	Yes, not mandatory.
e. rights in a company (other than shares);	Yes, not mandatory.
f. Insurance rights;	Yes, not mandatory.
g. Inventory;	Yes, not mandatory.
h. Equipment/plant/machinery;	Yes, not mandatory.
i. Goodwill;	Yes, not mandatory.
j. Real estate property (other than land);	Yes, not mandatory.
k. Land;	Yes, not mandatory.
l. Objects under construction (object of unfinished construction).	Yes, not mandatory.

The debtor company, if it faces financial difficulties, may be placed under judicial management or enter into a scheme of arrangement. In such situations, creditors may be prohibited from enforcing security against the company while such arrangements are in effect.

Security granted within the hardening period may be set aside in certain circumstances (see Question 16).

Generally easy, creditor-friendly and average.

No. The rules and regulations are fairly settled in this area of law.

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CMS Expert Guide for taking security in Singapore

Table of contents

jurisdiction

GUARANTEE

1. Can a guarantee be granted by one entity/person to secure obligations of another entity/person?

2. Is guarantee treated under the law as:

2.1 a type of security?

2.2 a financial service?

3. Can a corporate guarantee be granted:

3.1 Upstream?

3.2 Downstream?

3.3 Lateral?

4. Are there any special aspects to be taken into account in relation to granting a guarantee (e.g. financial assistance, transfer pricing, corporate benefit, any other limitations)?

5. Are there any formal requirements or practical recommendations for the execution, validity and/or enforceability of a guarantee?

PRINCIPAL OBLIGATIONS

6. Is it possible for a guarantee/security to secure future obligations?

7. Is the validity of a guarantee/security dependant on the validity of a principal (guaranteed/secured) obligation? Does the concept of indemnity exist or would be recognised under the law?

8. Can guarantee/security be continuing for as long as guaranteed/secured obligations remain outstanding or shall it have a definite term?

9. Can guarantee / security be granted to a foreign creditor?

10. Is it possible for a guarantee and/or security to be created by way of parallel debt/trust/agent structures?

11. In case of transfer of guaranteed/secured liabilities to a new creditor (partially or fully), what are the formalities required to ensure that the guarantee/security package is maintained in favour of a new creditor?

12. In case of any changes to guaranteed/secured obligations (including a change of a principal debtor, adding another debtor), what are the formalities required to ensure that the guarantee/security package is maintained in favour of a creditor?

13. Are there any restrictions regarding the governing law of a guarantee/security?

14. Are there any restrictions regarding submission of disputes under guarantee/security to foreign courts’ jurisdiction or to arbitration?

15. Are there any currency control/capital movement restrictions with respect to guarantees, security or loans?

16. What is the hardening period with respect to guarantee/security?

SECURITY

17. Is it possible to have security over:

18. Is it possible to create security over multiple assets by one security document? Is floating security possible?

19. Can a security be granted to secure liabilities of a holding company, a shareholder, a subsidiary or any other affiliate?

20. In order to be enforceable against third parties, must a security/security agreement be:

20.1 Notarised?

20.2 Registered?

20.3 Executed in/translated into local language?

20.4 Other?

21. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the collateral?

22. How is the priority/rank of security established?

EXECUTION AND PERFECTION MECHANICS, TIMING AND COSTS

23. Can a guarantee/security be executed by way of e-signing?

24. Are registers of guarantees/encumbrances over movable/immovable assets publicly available and accessible online?

25. Which party shall/can apply for registration of security in a relevant register?

26. What documents need to be submitted and in what form for the guarantee/security registration with a relevant register?

27. How much time and cost does it take to:

27.1 check if any encumbrances over collateral exist (i.e. obtain extracts)

27.2 register/deregister/amend/remove an encumbrance in a relevant register?

27.3 notarise (if required) a security document?

27.4 comply with other perfection requirements?

SECURITY ENFORCEMENT

28. The right to enforce security arises when:

a. the secured debt is unpaid and due?

b. there is any other breach under the principal obligation agreement?

c. there is any other breach of the pledge/security agreement?

d. the debtor or guarantee/security provider becomes insolvent?

e. any other grounds?

29. Is there any mandatory period for curing a default and/or any other formalities to be fulfilled before proceeding to enforcement?

30. Is out-of-court security enforcement available? Is any additional instrument for direct enforcement required?

31. Which out-of-court enforcement methods are available and how the collateral value is determined thereunder:

31.1 taking over the title to the collateral?

31.2 selling collateral to a third party by way of direct sale or private or public auction?

31.3 notarial writ?

31.4 other?

32. Are powers of attorney or any other (conditional) instruments used to facilitate an out-of-court enforcement by a secured party? Are they mandatory or recommended?

33. Is there anything else of which a creditor should be aware as unusual or particularly difficult?

34. Is security enforcement in practice: generally easy, fairly easy or complicated? –more debtor- or creditor-friendly or balanced?– quick, average or long in terms of timing?

35. Are there any upcoming changes to guarantee/security regulations/rules?

Last updated · 30 Apr 2025

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