Are you an Accredited Investor?

As defined by Section 4A of the Securities and Futures Act, an accredited investor is:

An individual…

• whose net personal assets exceed in value the minimum amount of $2 million (or its equivalent in a foreign currency) and in determining whether an individual’s net personal assets exceeds the minimum amount, the estimated fair market value of an individual’s primary residence less any outstanding amounts, shall not account for more than $1 million (or its equivalent in a foreign currency) of the minimum amount; or

• whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency)

Example: If your primary residence in Singapore is valued at $7 million and you have an outstanding mortgage of $3 million, your net equity on your primary residence would be $4 million. That does not automatically qualify you as an Accredited Investor as your primary residence can only account for $1 million.

However, if you have a second property or an investment property valued at $1 million with no outstanding mortgage, your net personal asset value would meet the minimum criteria of $2 million as set out by the SFA and you will qualify as an Accredited Investor.

Yes, if you have financial assets that are held overseas, it can contribute towards your Accredited Investor status. A market value assessment of each financial asset will need to be undertaken in order to verify the amount of such assets.

Example: If you have an investment property in Malaysia worth RM$10 million, you could use the property to contribute towards your Accredited Investor status in Singapore by converting the value to SGD$3.3 million.

A primary residence simply means the home in which you live most of the time. This can be located in Singapore or overseas. If your primary residence is located outside of Singapore, you would need to convert the market value into SGD.

For Singapore Citizens and Permanent Residents, it is relatively easy to prove that your income in the preceding 12 months is not less than $300,000. Simply provide the following:

• Latest Notice of Assessment (NOA)

• Last 12 months’ original computerized salary slip

• Last 12 months’ CPF contribution statement

These documents would be sufficient to prove that your income is more than $300,000 and that you are an Accredited Investor.

Rikvin Capital is a private finance company that falls under the term “Excluded Moneylender”. Under Section 2 of the Moneylenders Act, an excluded money lender is any person who:

• Lends money solely to his employees as a benefit of employment
• Lends money solely to Accredited Investors within the meaning of Section 4A of the Securities and Futures Act
• Lends money solely to:

○ Corporations
○ Limited liability partnerships
○ Trustees or trustee-managers, as the case may be, of business trusts for the purpose of the business trusts
○ Trustees of real estate investment trusts for the purposes of the real estate investment trusts, or who carries on any combination of such activities or services

Hence, in order for Rikvin Capital to be treated as “excluded moneylenders”, the company can only lend to Accredited Investors and Corporations.