Singapore’s Ministry of Law has extended the application period for the Simplified Insolvency Programme (SIP) by 12 months. It was originally due to end on 28 July 2021 but will now be extended to 28 July 2022.


The SIP was introduced on 29 January 2021 under the Insolvency, Restructuring and Dissolution Act 2018 (Singapore). Its purpose was to help micro and small companies (MSCs)  that may face financial difficulties as a result of the COVID-19 pandemic to restructure their debt, or to wind up via simpler and more cost efficient insolvency processes. This was in order to maximise efficiency by providing a simpler, faster, and lower-cost process to assist MSCs which may be unlikely to have the resources to attempt to wind up or restructure their debts on their own. The application window for the SIP was previously due to end on 28 July 2021.

Singapore’s SIP

The SIP is comprised of two bespoke restructuring and insolvency processes:

  • the Simplified Debt Restructuring Programme (SDRP), which is intended to be used by viable MSCs which are nonetheless in financial difficulty, to restructure their debts with their creditors; and
  • the Simplified Winding Up Programme (SWUP), which is intended to be used for the winding up of non-viable.

To qualify as an MSC, the company must:

  • have annual sales turnover not exceeding S$10 million;
  • not have more than 30 employees;
  • not have more than 50 creditors; and
  • not have liabilities (including prospective and contingent liabilities) exceeding $2 million.

In addition, the MSC must be incorporated in Singapore.

There are a number of other qualifying criteria to access either the SDRP or SWUP processes, including that the company must not be subject to an existing insolvency or restructuring procedure.

In a press release, the Ministry of Law recognised that even though Singapore is transitioning to a policy of ‘living with’ COVID-19, the business environment continues to be challenging for some sectors due to both the global financial situation and the local situation in Singapore, which has recently involved a return to “Phase 2: Heightened Alert” whereby several restrictions have been put on local businesses including mandating all staff to work from home where possible.

The Ministry of Law noted that many MSCs have relied on government-sponsored industry-wide support measures such as the SIP until now and that businesses may continue to face difficulties in the months ahead as the current COVID-19 support schemes time out.

Eligible MSCs will therefore be able to continue to apply to access the SIP (either the SDRP or SWUP) until the end of July 2022. Those wishing to do so can visit


Many countries introduced financial support packages for business following the outbreak of the COVID-19 pandemic in March 2020, which were generally time bound. As the world continues to grapple with COVID-19 into the latter half of 2021, Singapore is not alone in extending relief schemes initially introduced in response to COVID-19 into next year.

The fact that this approach is being implemented in a country like Singapore, where vaccination rates are high and COVID-19 infections are largely under control, indicates that many are still concerned about the longer-term financial implications of the pandemic. It is probably indicative of a broader trend that, while countries are successfully vaccinating populations and allowing businesses to reopen, the short-term business outlook remains uncertain.

Additionally, governments will have to make a decision on whether some of these schemes introduced as a result of COVID, should be made permanent, if they continue to work well. MSCs benefit from a more streamlined approach to insolvency processes generally and this will still be the case in a post-COVID environment.

At the international governance level, the United National Commission on International Trade Law (UNCITRAL) has recently announced its adoption of the Legislative Recommendations on Insolvency of Micro and Small Enterprises (the Legislative Recommendations) and its approval of the draft commentary to the Legislative Recommendations in principle. The guidance is expected to be finalised in December. These texts were prepared to assist States with establishing a simplified insolvency regime to address the insolvency of individual entrepreneurs and micro and small businesses of an essentially individual or family nature with intermingled business and personal debts (which UNCITRAL refers to as MSEs). UNCITRAL noted that simplified insolvency procedures will be highly relevant to the COVID-19 economic recovery. Despite temporary relief measures implemented by states, UNCITRAL expects the number of MSE insolvencies to rise dramatically as a result of economic restrictions such as lockdowns reducing demand for products and services and disrupting supply chains, particularly in sectors where MSEs operate (e.g. retail and hospitality). Further information on this guidance can be found at

Key contacts

Jamie McLaren
Jamie McLaren
Partner, Singapore
+65 6868 8038
Paul Apáthy
Paul Apáthy
Partner, Sydney
+61 2 9225 5097
Sophie Lenox
Sophie Lenox
Senior Associate, Singapore
+65 6868 8036
Chris Madden
Chris Madden
Associate, Singapore
+65 6868 9820



Herbert Smith Freehills LLP is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.