What does it take to be an Accredited Investor in Singapore?
As an investor, building a diverse investment portfolio can be aided by accessing more investment opportunities. However, not all investors get access to the same investment possibilities. Accredited Investors gain the upper hand by having admission to restricted investment opportunities. With a larger variety of investments to choose from, Accredited Investors may build an investment portfolio far more diverse than that of the average retail investor.
How to qualify as an Accredited Investor?
For Individuals, they will have to meet at least one of the following three criteria to qualify as an Accredited Investor:
1. Income in the preceding 12 months is not less than SGD300,000 (or its equivalent in a foreign currency).
2. Net personal assets (excluding liabilities) exceeding SGD2 million (or its equivalent in a foreign currency) in value, of which the net value of the investor’s primary place of residence can only contribute up to SGD1 million.
3. Net Financial Assets exceeding SGD1 million (or its equivalent in a foreign currency) in value.
For Joint Accounts, they will have to meet both of the following criteria to qualify as an Accredited Investor, else the joint account will transact only as a retail joint account:
1. At least 1 joint account holder must qualify as an Accredited Investor and have opted in for the status.
2. All other joint account holders who do not qualify for Accredited Investor status on an individual capacity must opt in for Accredited Investor status for the joint account.
For Corporations, they will have to meet the following criteria to qualify as an Accredited Investor:
Corporations have to be a legal entity with net assets exceeding SGD10 million (or its equivalent in a foreign currency), as determined by;
- the most recent audited balance-sheet of the corporation; or
- where the corporation is not required to prepare audited accounts regularly, a balance-sheet of the corporation certified by the corporation as giving a true and fair view of the state affairs of the corporation as of the date of the balance-sheet, which date shall be within the preceding 12 months; or
- where the entire share capital or beneficiaries of the entity is owned by one or more persons, all of whom are Accredited Investors.
The overall fundamental qualification to be an Accredited Investor in Singapore is mainly wealth, rather than the depth of knowledge or expertise about investing. However, through the criterion given above, it is suggested that Accredited Investors do not face the same restrictions as retail investors as they are more financially capable and knowledgeable.
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