Close Your Restaurant or Sell It as a Going Concern? A Singapore Checklist

Short answer: if your restaurant still has customers, trained staff, a fitted-out unit and a lease with time left, try selling it as a going concern before you close it. A buyer may pay for those things, while closing usually means paying to hand the unit back. If you do close, the main Singapore steps are: settle the lease with your landlord, handle staff according to their contracts and MOM's rules, cancel your SFA food shop licence when you stop operating, cancel or stop renewing your liquor licence with the police, apply to cancel GST registration within 30 days if you are GST-registered, and, if you want to close the company itself, apply to ACRA to strike it off once it meets the criteria.

This checklist is general information based on official agency guidance. Your lease, contracts and company position will decide the details, so check with your lawyer and accountant.

Should you close or sell your restaurant?

Selling as a going concern means the business keeps trading and a new owner takes it over. Closing means the business stops and you wind it up. Selling tends to make sense when the outlet is in a location people want, has a fit-out a buyer can reuse, a lease the landlord will let a new operator take on, steady takings, or a brand and recipes with a following. Closing may be the realistic option when the lease is about to expire or cannot be taken over, the business is losing money with no fix in sight, or the unit has to be returned to bare condition anyway.

Two official rules shape any F&B sale:

• The SFA licence does not go with the sale. SFA says food retail licences are non-transferable, so a new owner must apply for its own licence.
• HDB shop tenancies generally cannot be passed on. If your unit is an HDB-rented shop, the tenancy usually goes back to HDB rather than to a buyer. See can you take over an HDB shop tenancy.

For the full selling process, see selling an F&B business in Singapore. To see what similar outlets are listed for, browse F&B businesses for sale.

What happens to the lease when you close?

Your lease or tenancy agreement decides this, not a general rule. Before you announce anything, check:

• The notice period and whether you can end early, and at what cost.
• Reinstatement obligations: whether you must remove the fit-out and return the unit to its original condition.
• How the security deposit is returned, and what can be deducted.
• Whether the landlord will consider a new tenant or an assignment. If so, a sale may become possible.

Talk to the landlord early. A landlord who is willing to accept an incoming operator is often the difference between selling and closing.

What do you owe staff when a restaurant closes?

Staff must be given notice or paid in lieu according to their contracts and the Employment Act, along with their outstanding salary and entitlements. Whether retrenchment benefits are payable depends on the employment contract or collective agreement and on MOM's guidelines, so check MOM’s retrenchment pages before you tell staff.

MOM also requires mandatory retrenchment notifications: employers with businesses registered in Singapore that have at least 10 employees must notify MOM within 5 working days after notifying employees of their retrenchment.

If you sell instead, the position is different. When a business is transferred as a going concern, staff contracts generally move to the new owner under Section 18A of the Employment Act. See what happens to staff in a business takeover.

How do you cancel your SFA food shop licence?

According to SFA, food establishments that have stopped operating and no longer need their licence should cancel it at the point of cessation. Only the licence holder can cancel it: an individual uses Singpass, and a company's authorised person uses Corppass. Cancellation is done on GoBusiness and is approved immediately. If you pay SFA by GIRO, also end the GIRO arrangement with your bank.

What about the liquor licence?

The Singapore Police Force says you may cancel a liquor licence any time before it expires, but licence fees are not refunded on cancellation. Under the liquor licensing regulations, a licence cannot be renewed once the licensee has stopped supplying liquor. SPF's liquor licence FAQ notes that once a termination notification is submitted, the termination takes effect and cannot be reversed, so time it for after your last trading day.

When must you cancel GST registration?

IRAS says you must apply to cancel your GST registration within 30 days when your business has ceased, when you have stopped making taxable supplies and do not intend to make any in future, or when your business is transferred as a whole to someone else. IRAS then issues a final GST return (GST F8) covering the period up to the day before cancellation takes effect. You must file it and pay any GST due within one month from the end of that period, including GST on business assets you still hold.

If you sell the business as a whole instead, the 30-day rule still applies to you as the seller, and the buyer must check whether it needs to register for GST. See GST registration in a business takeover.

How do you close the company with ACRA?

Closing the outlet does not close the company. ACRA offers two routes: striking off, for a company that is inactive and debt-free, or winding up, if there are debts to settle. According to ACRA, to apply for striking off a company must have stopped trading, have no unpaid debts or unresolved issues with any government agency, have no charges registered, not be involved in legal cases or regulatory action, own nothing and owe nothing, and have the agreement of all directors or a majority of them. ACRA warns that applying without meeting the criteria can be a false declaration. Any outstanding tax credits are transferred to the Insolvency and Public Trustee's Office on dissolution, so deal with them first.

That is why the order matters. Clear the lease, staff, suppliers, licences and GST first, and apply to strike off last.

Closing checklist in order

1. Decide close or sell. If selling, list the business early, while it is still trading.
2. Read the lease and talk to the landlord about notice, reinstatement and the deposit.
3. Plan staff notice and pay, and notify MOM within 5 working days if the retrenchment rules apply to you.
4. Settle suppliers, utilities, subscriptions and any delivery platform accounts.
5. Cancel the SFA licence when you stop operating, and end any GIRO arrangement with SFA.
6. Cancel the liquor licence or let it lapse, after your last trading day.
7. Apply to cancel GST registration within 30 days and file the final GST F8.
8. Once the company owns nothing and owes nothing, apply to ACRA to strike it off, or wind it up if there are debts.

Frequently asked questions

Is it better to close or sell a restaurant in Singapore?

It depends on what the business still has. If it has a lease a new operator can take over, a reusable fit-out, steady takings, staff or a known brand, selling it as a going concern may recover value that closing would lose. If the lease is ending or cannot be taken over and the business is loss-making, closing may be more realistic.

Can I transfer my SFA food licence to the buyer?

No. SFA says food retail licences are non-transferable. A new owner must apply for its own licence.

When should I cancel my SFA licence?

SFA says food establishments that have stopped operating and no longer need their licence should cancel it at the point of cessation. Only the licence holder can cancel it, on GoBusiness, and cancellation is approved immediately.

Do I get a refund if I cancel my liquor licence early?

No. The Singapore Police Force says there is no refund of licence fees when an existing liquor licence is cancelled. Once a termination notification is submitted, it cannot be reversed.

How soon must I cancel GST registration after closing?

IRAS says you must apply to cancel GST registration within 30 days when your business has ceased or is transferred as a whole. IRAS then issues a final GST return (GST F8), which must be filed and paid within one month from the end of the period it covers.

Do I have to tell MOM if I lay off restaurant staff?

If your business is registered in Singapore and has at least 10 employees, MOM requires you to notify it within 5 working days after notifying employees of their retrenchment. Staff notice, pay and any retrenchment benefits depend on their contracts and MOM guidelines.

Can I strike off my company right after closing the restaurant?

Only once it meets ACRA’s criteria: it has stopped trading, has no unpaid debts or unresolved issues with government agencies, no charges, no legal cases or regulatory action, owns nothing and owes nothing, and all or a majority of directors agree. If there are debts to settle, the company must be wound up instead.

What happens to my restaurant staff if I sell instead of closing?

If the business is transferred as a going concern, staff contracts generally move to the new owner under Section 18A of the Employment Act, with service unbroken. MOM says a transfer of shares or of assets only is not a transfer of employment.