Any two suffice. Meeting all three is not the test.
Singapore GuidesTax & compliance
AUDIT EXEMPTION
Not every Singapore company needs an audit. A private company qualifying as a small company is exempt from statutory audit: in the immediate past two consecutive financial years, it must have met any two of three criteria — total annual revenue of S$10 million or less, total assets of S$10 million or less, and 50 employees or fewer. A company less than two years old is judged on the current financial year. Note carefully: what is exempted is the audit, not the duty to prepare financial statements or to file.
| Item | Rule |
|---|---|
| Precondition | Must be a private company |
| The three criteria | Annual revenue ≤ S$10m; total assets ≤ S$10m; 50 employees or fewer |
| How many must be met | Any two — all three are not required |
| Assessment period | The immediate past two consecutive financial years |
| New companies | Less than two years old: judged on the current financial year |
| Employee count | Full-time employees at the end of the financial year |
| Groups | The whole group, including foreign entities, must also meet two of three on a consolidated basis |
| Applies from | Financial years beginning on or after 1 July 2015 |
This is where the arithmetic most often goes wrong. The rule is not all three — it is any two. Some worked examples:
Revenue S$8m, assets S$12m, 30 employees — revenue and headcount qualify: exempt.
Revenue S$15m, assets S$11m, 20 employees — only headcount qualifies: not exempt.
Revenue S$2m, assets S$3m, 60 employees — revenue and assets qualify: exempt.
The other key qualifier: the test must be met in both of the immediate past two consecutive financial years. Exceeding a threshold in a single year does not immediately cost the exemption; failing across two consecutive years does.
A company under two years old has no "past two financial years" to test, so the rule simplifies: only the current financial year is assessed against two of three. Almost every newly registered company qualifies naturally — revenue and assets are small and headcount is low.
In other words, new companies usually start out exempt. The issue arises once the business scales. When revenue passes S$10m or the team exceeds 50, one year may still be survivable — the exemption is lost only after two consecutive years — but once the trend is clear, budget the audit ahead of time.
If your company belongs to a group, qualifying on its own is insufficient. The entire group, including foreign entities, must also meet two of the three criteria on a consolidated basis, again across the immediate past two consecutive financial years.
This matters particularly for cross-border structures: the Singapore entity might have three staff and modest revenue, but if the parent or sister companies are large, the consolidated figures breach the thresholds and the Singapore company is audited regardless. Factor it in when designing the holding structure.
Two situations:
1. The company ceases to be a private company at any point during the financial year. Once the status changes, that year does not qualify.
2. It failed to meet at least two of the three criteria across the immediate past two consecutive financial years.
This is the costliest misreading. Only the statutory audit falls away; every other obligation stands:
The company must still prepare financial statements to the applicable accounting standards, still file its annual return with ACRA, still file ECI and corporate tax with IRAS, and still hold — or lawfully dispense with and declare — its AGM. What is saved is the auditor's fee and time, not the bookkeeping or the compliance itself.
For the full annual obligations, see what every Singapore company must do each year; for filing dates and exemptions, see Singapore corporate income tax.
Any two suffice. Meeting all three is not the test.
The exemption is lost only after failing across two consecutive financial years.
For a group, the consolidated figures including foreign entities must also meet two of three. Cross-border structures especially.
Only the audit is exempted. Financial statements, the ACRA annual return and IRAS filings all remain due.
As a licensed corporate service provider we watch the three lines during bookkeeping: how far revenue, assets and headcount each sit from their thresholds, and what the group consolidation looks like. When a second consecutive failing year is approaching we flag it early, so the audit goes into next year's budget and calendar rather than surfacing when the annual return is already due. See pricing.
No. A private company qualifying as a small company is exempt: in the immediate past two consecutive financial years it must have met any two of — annual revenue of S$10m or less, total assets of S$10m or less, and 50 employees or fewer.
No. Any two of the three is sufficient.
A company less than two years old has no prior two financial years to test, so only the current financial year is assessed against two of three. Most new companies qualify naturally.
Yes, but the entire group including foreign entities must also meet two of the three criteria on a consolidated basis across the immediate past two consecutive financial years. Qualifying on the Singapore entity's own numbers is not enough.
Only the statutory audit is exempted. The company must still prepare financial statements, file its annual return with ACRA, file ECI and corporate tax with IRAS, and deal with its AGM obligations.
Sources: ACRA (small company audit exemption criteria, the two-of-three rule, the immediate past two consecutive financial years test, treatment of new companies and groups, disqualification, and the 1 July 2015 commencement). Verified August 2026; refer to ACRA for the latest. This article is general information and not accounting or legal advice.
Revenue, assets, headcount and the group consolidation together decide whether the exemption holds. Send us the figures and we work it out — including whether next year breaks it.
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