Singapore collection profile



PDF icon   Read the full Collections Profile
PDF icon   Read also the EH Economic Research Country Report
World Bank Doing Business
2014: 1/189 countries
2013: 1/189 countries

Complexity of collecting debt:

Notable High Very High Severe

Executive summary

  • The payment behavior of domestic companies and the DSO is good, however the law provides no guidelines as to how late payments should be handled and contracts remain the only reference when business relationships turn bad.
  • Legal action overall remains expensive even though the court system is fairly efficient.
  • The Insolvency framework is in line with international standards however in practice, as in most countries, collecting debt from insolvent debtors would prove to be a genuine challenge.
General Information GENERAL INFORMATION arrow-transparent
Collection Practices COLLECTION PRACTICES arrow-transparent
Court Proceedings Court PROCEEDINGS arrow-transparent
Insolvency Proceedings INSOLVENCY PROCEEDINGS arrow-transparent
General Information 


Days Sales Outstanding (DSO)

The payment culture in Singapore is good: invoices usually paid within 30 to 60 days depending upon the industry and late payments are rare.


Late payment interest

Late payment interest must be agreed upon during the contractual negotiations and put in writing. In practice, interest would rather constitute a negotiation tool whilst collecting the debts.

Similarly, collection costs must be agreed upon in writing when negotiating the contract, but they would essentially be paid to the creditor upon court request. Therefore they would essentially be used as negotiation tools during the pre-legal collection phase.

collection practice 


Orchestrated negotiation first

Amicable settlement opportunities should always be considered as a serious and very common alternative to formal legal proceedings, which overall remain expensive even though the system is fairly efficient. Although there are no pre-legal action requirements, the courts would indeed tend to penalize unreasonable behaviors (rejection of a reasonable settlement proposal for instance). Before starting legal proceedings against a debtor, assessing its assets is also important as it allows verifying whether the company is still in activity and whether recovery chances are at best. In addition, it is essential to be aware of the debtor’s solvency status: if insolvency proceedings have been initiated, it indeed becomes impossible to enforce a debt (see below).

Court Proceeding 


The Singapore Court System consists of State Courts (Magistrate Court and, District Courts) and the Supreme Courts (consisting in High Court and a Court of Appeal). The High Court hears civil and criminal cases in the first instance as well as in appeal from the State Courts. The amount of the claim will determine which Court is competent: in general, civil cases involving claims not exceeding SGD 60,000 are dealt with by the Magistrate Courts whereas claims above SGD 60,000 but not exceeding SGD 250,000 are dealt with by the District Courts. Claims above SGD 250,000 are dealt with by the High Court. The Court of Appeal hears appeal cases from the High Court. The courts are divided into divisions, but these do not operate on a specialty basis. The courts are overall fairly efficient and independent whilst the rule of law perception is good, however conducting legal action would remain a costly experience.

Legal dunning ought to start with a registered Demand Letter recalling the debtors obligation to pay the principal together with late payment interests (as contractually agreed or taking a legal rate as a reference) and possibly offering to enter negotiations. There is no fast track scheme in Singapore therefore it is necessary to conduct a normal lawsuit even if the debt is certain and undisputed. When emergency is demonstrated, it is possible to get an earlier hearing date. Ordinary legal action would usually commence when amicable collection has failed. The creditor may issue a Writ of Summons and have it served the other party. The latter is then given 8 to 14 days to file a defense. Failure of the debtor to pay or react would typically entitle the court to render a default judgment, but refusing to acknowledge service of the Writ of Summons does not make the service invalid nor prevent the Plaintiff from proceeding further. The court then sets up hearings in order to examine the parties’ evidence (discovery stage) and considers the parties’ arguments and witnesses prior to taking a decision. When the debtor raises no defense or counterclaim during the proceedings, or if its defense has no real chance to succeed, a summary judgment may be rendered in order to shorten procedural delays.

insolvency Proceeding 


Insolvency in Singapore is a matter of cash flow. Indeed, a debtor is deemed insolvent when it becomes unable to pay its debts but the mere inability of a company's assets to compensate for its liabilities would not suffice. Insolvency proceedings would normally be brought to the High Court. These would take the form of debt restructuration proceedings, or consist in liquidating the debtor company's assets to satisfy the creditors' rights but the latter is not recommended as the chances of recovering as null.


Talk to one of our debt collections experts near you.

> Email us now



> For more information on local collection practices, court proceedings and insolvency read the full Collections Profile


map icon Go back to the world map