According to the latest 2013-14 Global Competitive Report released by the World Economic Forum, Singapore’s financial market development, highly-qualified workforce and infrastructure make it a very good place to do business.
On top of this, the city-state has introduced many incentives to attract entrepreneurs and businesses. However, as with running a company in any foreign territory, it’s crucial that you first familiarise yourself with the local laws and regulations to avoid getting into trouble and to ensure that you are respectful of the way the country does business.
In Singapore, that means ensuring that your company is compliant with the Companies Act.
The two main authorities, Inland Revenue Authority of Singapore (IRAS) and the Accounting and Corporate Regulatory Authority (ACRA), regulate business entities and taxation in Singapore. The best way to say complaint is with the help of corporate service providers that can assist you through every step as you set up and run your business.
To help your business remain compliant at every step of the way (and avoid painful penalties or jail time), fulfil these nine compliance duties:
Acquire a Business License
The license your company requires depends on the nature of your business, as well as the activities and industries your company will be engaging in. These should be acquired prior to any business activity or transaction. These activities include running a medical clinic, manufacturing food and beverage as well as wholesale trading. It is imperative to do thorough research to find out which business licenses are needed before you begin operations.
Register for GST
Another important step to take early on is to register for GST (Goods and Services Tax). This is Singapore’s equivalent to the VAT (Value Added Tax) and is levied on certain goods and services within Singapore, as well as imports. This tax is currently valued at 7%.
Your business may be required to compulsorily become a GST registered entity, and from there you will need to submit a tax return to the authorities based on your accounting cycle. Presently, GST registration isn’t mandatory for all businesses, under certain conditions. However, registering for GST can be very beneficial to companies.
Fix a Financial Year End
In Singapore, companies are able to choose their own FYE (Financial Year End), which will form a basis for their accounting period. Typically the FYE recurs every 12 months and need not necessarily fall on 31st December. If your organisation is a subsidiary of a holding company, then your FYE must correspond to that company’s FYE.
Disclose Company Registration Number
The Singapore Companies Act now states that all companies should have their registration number, alongside their registered name, displayed on business letters, statements, invoices and other documents. All entities registered in Singapore are issued with a Unique Entity Number (UEN) which can be used for communication with the Government and other authorities.
Secure a Registered Address
In order to legally operate in Singapore, your business must have a registered office there which is open and accessible to the public during working hours.
Have a Local Resident Director
Your business must have at least one director who is a resident of Singapore. Companies are entitled to have as many local and/or foreign managers and directors as they wish, but at least one must be ordinarily resident in Singapore, (Singapore Citizen, Permanent Resident or holder of an Employment Pass/Personalised Employment Pass/Entrepreneur Pass).
Every company in Singapore is required to appoint auditors within 3 months of incorporation. Exceptions apply if all shares are held by individuals, if there are less than 20 shareholders, or if the annual turnover of the company is under S$5 million.
Appoint a Local Company Secretary
In order to comply with the Companies Act, you will also need to appoint a company secretary within 6 months from the date of incorporation. He/she should have sound knowledge of the Companies’ Act and able to fulfil all the duties of a company secretary.
Keep Detailed Accounting Records
Your company will also be required to keep detailed and timely accounting information and other records detailing all transactions and demonstrating the financial standing of the organisation. Each year, your company will need to file annual returns with ACRA and annual tax returns with IRAS.
These steps will put your company on track with regards to compliance; one of the crucial requirements for doing business in Singapore.
Need help with statutory compliance in Singapore?
Contact us now for a free consultation. Contact Us