Singapore Audit Exemption: The Small Company Concept (2026)

Audit exemption means your company is not required to have its financial statements audited by an external auditor. It does not mean you stop preparing or filing financial statements; it only removes the statutory audit step. The framework is on the ACRA audit exemptions page, and it applies to financial years beginning on or after 1 July 2015.

Two routes, two sections of the Companies Act

There are two distinct audit exemptions, under two different provisions. Section 205C of the Companies Act, read with the Thirteenth Schedule, exempts a small company, and this route is only for private companies. Section 205B separately exempts a dormant company, and that one is not limited to private companies. This guide focuses on the small company concept, which is what most active private companies rely on.

It replaced the old exempt private company rule

The small company concept replaced an older framework that tied audit exemption to being an exempt private company, which among other things barred corporate shareholders. That is no longer the case. A private company can now qualify for audit exemption even if it has corporate shareholders, as long as it meets the small company criteria. This matters for foreign-owned Singapore subsidiaries, which often have a corporate parent as shareholder.

People often quote the three size criteria and stop there, but eligibility is cumulative. Two conditions both have to hold.

Condition one, you are a private company

Your company must be a private company in the financial year. This is a gate: a public company does not qualify for the small company exemption at all, regardless of size.

Condition two, two of three criteria across two consecutive years

You must meet at least two of the three quantitative criteria for each of the immediate past two consecutive financial years. The two-year requirement is what trips up growing companies: a single good year is not enough, and a single year over the line does not immediately remove the exemption, because the test looks back across two consecutive years.

A note on the thresholds

The S$10 million revenue, S$10 million asset, and 50-employee figures have been fixed since 1 July 2015. ACRA opened a 2026 review of the audit exemption framework, with targeted industry consultation from March 2026, and the likely direction is upward, in line with comparable regimes elsewhere. If your company sits just above one of the thresholds, it is worth tracking the outcome, but until ACRA publishes a change, the current figures are what apply.

A company less than two years old does not yet have two consecutive financial years to look back on, so ACRA applies a simpler rule.

Test the current year

If your company is newly incorporated, you qualify for audit exemption if you meet the criteria in the current financial year. In your first financial year, check whether you are a private company and meet two of the three quantitative criteria that year. If you did not qualify in the first year, check again using the same requirements in your second financial year. Once you have two consecutive financial years of history, the standard two-year look-back applies from then on.

This is good news for most startups: a small company in its first year is audit-exempt from the start, provided it is private and within two of the three thresholds that year.

This is the single most common trap for foreign-owned Singapore companies. If your company belongs to a group, qualifying on your own is not enough.

Both the company and the group must qualify

To be audit-exempt as part of a group, your Singapore company must itself qualify as a small company, AND the entire group, including foreign entities, must meet at least two of the three criteria on a consolidated basis for the immediate past two consecutive financial years. The group figures are taken from the holding company's consolidated financial statements.

A worked example

Suppose your Singapore subsidiary has S$2 million in revenue and 10 employees. On its own, it looks comfortably small. But if its overseas parent heads a group with consolidated revenue and assets well above S$10 million, the group fails the small group test, and your Singapore subsidiary is not audit-exempt, despite being tiny on its own.

You cannot avoid the test by not consolidating

A frequent misunderstanding is that not preparing consolidated financial statements sidesteps the group test. It does not. Under the Thirteenth Schedule of the Companies Act, whether an entity is part of a group is decided by the accounting standards, so if your company is owned by a parent company, you must assess the small group test regardless of whether you prepare or file consolidated accounts. The detail is on the ACRA audit exemptions page.

Once your company qualifies as a small company, it stays qualified in later years until one of two things happens.

The two ways you lose it

First, if you cease to be a private company at any time during a financial year, you lose the exemption. Second, if you do not meet at least two of the three criteria for the immediate past two consecutive financial years, you fall out. The same two-consecutive-year logic applies to a small group. Because both tests look back over two years, the exemption does not flip on or off after a single year over a threshold.

Regaining it

If you fall out, you regain small company status by meeting the criteria again across the required two consecutive financial years, so it takes time to rebuild rather than reversing in a single year. If you do find yourself needing a statutory audit, fees vary by firm size and the complexity of your accounts; you can compare Singapore accounting providers including audit firms for provider-specific quotes.

A common and costly assumption is that an audit-exempt company has nothing to file. That is wrong. Audit exemption only removes the statutory audit.

You still file your annual return and financial statements

Your company still prepares financial statements and files them with ACRA as part of its annual return, even without an audit. The difference is that the financial statements you file are unaudited. ACRA is explicit that the small company criteria do not change your financial statement filing requirements. Where your company is required to file in XBRL, that obligation continues; our Singapore XBRL filing guide covers which template you use and how to file it. The annual return rules are on the ACRA annual return filing page and the XBRL requirements on the ACRA filing requirements and exemptions page.

And you still file your corporate tax return

Audit exemption is separate from tax. An audit-exempt company still files its corporate income tax return, attaching unaudited financial statements with Form C where required; our Singapore corporate tax filing guide covers the forms and the deadline. If you would rather hand the whole compliance cycle to a provider, see our Singapore accounting and bookkeeping comparison.