Background – It is usual for Singapore Government contracts to contain prohibitions against the assignment of receivable. Accordingly, the consent of the Singapore Government is required on an ad-hoc basis before the receivable can be assigned in a factoring or loan arrangement. An assignment of receivable without such consent is void against the Singapore Government and may also have other legal consequences such as a breach of contract.

Change in Policy – In 2022, as COVID-19 disruptions worsened the cashflow of businesses, the Government announced it was looking into the automatic approval of factoring to support businesses.1 Since 1 April 2023, there is no need to notify or seek consent for the factoring of certain contracts upon the satisfaction of certain terms.2 For other contracts, ad-hoc consent is still required.

Conditions – Key conditions include:3

  1. Only approved factoring companies listed on the Vendors@Gov website4 ;
  2. No prior factoring;
  3. Obligation to provide information on the factor if requested;
  4. The Government's rights against the vendor should not be affected;
  5. The factor is indicated as a payee in the invoice;
  6. Payment to the payee discharges the Government fully from its payment and GST obligations to the vendor, even if not factored;
  7. If payment is subject to Singapore withholding taxes, the vendor must notify the Government, comply with its invoicing directions and give a related indemnity;
  8. The Government has no responsibility to verify; and
  9. The Government may withdraw its consent at any time.

The Way Ahead – This is a welcomed development for the factoring and receivable finance community. There will be more opportunities for factoring and receivable finance. There will also be greater certainty and efficiency with the institutionalisation of the approval process. This may also provide some guidance to parties to non government contracts to adopt a similar approach when dealing with the issue of the prohibition against assignment in contracts.


1 rajah


3 See for example:

(a) conditions.pdf

(b) conditions.pdf


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