Every month, more and more foreign entrepreneurs are relocating their businesses to Singapore due the country’s hassle-free company incorporation procedures.
It is important for all Singapore companies to know about the various pre-incorporation and post-incorporation statutory compliance requirements, as mandated by the Accounting and Corporate Regulatory Authority (ACRA).
Compliance Requirements for Singapore Companies
We can assist in fulfilling all of your compliance requirements. In addition, we also offer several support services to help you run your business successfully in the city-state.
The table below gives a snapshot of all the corporate compliance requirements in Singapore and services we offer:
|Corporate Compliance Requirements||Our Services|
|Local Singapore office address|
|Local resident director|
|At least one shareholder|
|Registrations (if applicable):
|Business licenses and permits (if required)|
|Accounting & bookkeeping|
|Appoint an auditor|
|Bank account opening|
|Annual General Meeting (AGM)|
|Annual filing requirements:
|Fiscal year determination|
|Estimated Chargeable Income (ECI)|
|Unique Entity Number (UEN) disclosure|
|Additional Business Services|
|Document Drafting & Vetting||*|
|Company Strike-off / De-registration|
* Available if required.
Read on for further details on all these requirements and how we can assist you in fulfilling it.
Essential Regulatory Compliance For Incorporation
Singapore Corporate Secretary
All companies must appoint a company secretary who is ordinarily resident of Singapore. He or she must have the prerequisite domain knowledge and is responsible for ensuring all regulatory compliances stipulated by ACRA and IRAS.
Generally, most companies in Singapore outsource the mandatory company secretary requirement to company incorporation specialists such as SCI.
The responsibilities of a company secretary in Singapore include:
- Notifying ACRA on:
- any changes in the director(s) of a company or particulars relating to director(s)
- changes to a director’s name or residential address
- removal from office in accordance with the Act or constitution
- disqualification from holding office
- annual returns
- change of company name
- adoption, alteration and revocation of constitution; issue of shares
- any other changes that requires updating with ACRA
- Coordinating the publication and distribution of the company’s annual report, accounts and interim statement; and preparing the directors’ report
- Coordinate the board and general meetings, as well as maintain the minute’s books
- Ensuring that the company complies with its constitution
- Maintaining statutory registers
- Maintaining the company’s register of members, communicate with shareholders, and implement changes in the structure of the company’s share and loan capital
- Advising and assisting the directors with respect to their duties and responsibilities and compliance with their personal obligations under company law and, if applicable Stock Exchange requirements
- Participating as a key member of the company team to implement corporate acquisitions and disposals
- Act as a channel of communication and information for non-executive directors
- Ensuring the safe custody and proper use of the company seal if provided for in the company constitution
Local Singapore Office Address
Every company in Singapore must have a registered local address where all official correspondences are sent. This registered address must be a physical address (cannot be a PO Box) and must be open and accessible to the public during normal office hours. Use of residential address is allowed for certain types of businesses.
We can provide you with a Central Business District business address with mail forwarding on a weekly, bi-weekly, or monthly basis. This address can be used on your business cards, letterheads and corporate collaterals.
The company must have at least one director who is “ordinarily” resident in Singapore i.e. Singapore citizen, a Singapore permanent resident or a person who holds an Employment Pass/Entrepreneur Pass/Dependant’s Pass with a residential address in Singapore. While any person above 18 years of age can be appointed as a director, certain individuals such as those who have been declared bankrupt are not eligible.
At Least One Shareholder
For incorporating a company, at least one corporate or individual shareholding is required. 100% local or foreign shareholding is also allowed.
If the company has more than 20 but less than 50 shareholders, it’s called a private company. If the number of shareholders exceeds 50, it becomes a public company. If the number of shareholders is 20 or less, with no corporation holding any beneficial interest in the company’s shares, it is known as an Exempt Private Company.
As the director and shareholder of a company can be the same or different person, we can assist you by appointing one of our team members to act as the nominee resident director for your company, on a short-term or annual basis. This same person can also be the nominee shareholder of your company.
Many of our clients to engage our nominee shareholder service for the purpose of confidentiality. Our service entails the nominee shareholders holding the shares on trust for the beneficial owners. As only the nominee shareholder’s name will be identified on the Register of Shareholders, this will help in protecting your corporate privacy.
We can also assist you in framing your shareholders agreement, which is very important to avoid future disputes. This agreement defines the relationship between shareholders and specifies their respective rights and obligations.
We can take care of all the registration requirements if any of these are applicable for your business.
Goods & Services Tax (GST) is a broad-based consumption tax levied on the import of goods (collected by Singapore Customs), as well as nearly all supplies of goods and services in Singapore. However, some items are specifically exempt from GST include financial services and the sale or lease of residential properties. The current rate for GST is 7 percent.
A company must be registered to collect GST if its annual turnover exceeds or is likely to exceed S$1 million from the sale of taxable goods and services. This requirement may be waived if most of the goods or services are exported or supplied internationally (“zero-rated supplies”).
A company may also apply to the Comptroller of GST to collect GST voluntarily. Approval for voluntary registration is at the discretion of the Comptroller. Once approval is given, the company must remain registered for at least two years.
An important consideration for a Singapore-based company is its trademark registration. Trademarks are signs used by a business or trade to distinguish their goods or services from those of other players in the market, and are important for a company to protect its ideas and develop a brand.
The benefits of registering your trademark not only includes international legal protection against infringements, but also extends to tax rebates as businesses can use the Productivity and Innovation Credit (PIC) scheme to offset costs incurred in the registration.
Commonly-used symbols to identify a trademark are ® and TM. While ® refers to a registered and protected trade mark pursuant to trade mark laws; ™ merely identifies that the mark is being used as a trademark by the owner but is not necessarily registered or protected under trademark laws.
To learn more about Singapore trademark registration, click here.
If your company is engaged in export, import or trans-shipment activities in Singapore, you are required to register the company with the Singapore Customs as an importer, exporter, common carrier and others.
Earlier, Singapore Customs used to issue a Central Registration Number (CRN) to Singapore companies/organization engaged in trading activities. But since January 1, 2009, Singapore Customs has implemented the use of Unique Entity Number (UEN) in place of CRN.
Now, UEN has become the standard identification number for entities to interact with government agencies. The ACRA registration number, received at the time of company/ business registration is retained as the UEN for local companies and businesses.
If you are a tech start-up, our specialists can assist you in filing a patent application on the invention before it comes public. As the major asset of a tech start-up is its IP, neglecting this step may damage your future profitability.
If the start-up is assisted by an incubation centre funded either by the government or private entities, it’s always advisable to negotiate the license or option agreement.
A license agreement provides a company the right to commercially use intellectual property such as a patent or copyright, while an option agreement provides a company a time-limited right to obtain a full license agreement by “exercising” the option to obtain this license.
Business Licenses and Permits
While most businesses in Singapore do not require licenses or permits to operate, certain business activities are regulated by government authorities and thus require a license or permit to operate. Some of these are private schools, travel agencies, liquor distributors, moneylenders, banks, childcare centres, importers/exporters, wholesalers and retailers of liquors.
While incorporating the company, ACRA’s automated system will indicate if another approving authority’s permission is needed before starting the said business.
To learn more about business licenses and permits in Singapore, click here.
Company Post-incorporation Considerations
As and when your company’s headcount begins to grow, managing the payroll becomes cumbersome because calculating, processing and reporting payroll components such as government remittances, benefits, allowances and deductions must be done with proper care.
Also note that under the Employment Act, companies must pay their employees correct salaries within seven working days after the end of the salary period. Failure to pay salaries in accordance with provisions of the Act is an offence.
CPF and SDL
There are also few statutory requirements for employers in Singapore as regards to their contribution per employee. First is the Central Provident Fund (CPF) contributions, which are payable to Singapore Citizens and Permanent Residents. The employer is required to pay the employer’s and employee’s share of CPF contributions monthly for all applicable employees.
Second is the Skills Development Levy (SDL), which is used to fund the Skills Development Fund which supports workforce upgrading programmes and provides training grants to employers. Employers are required to make SDL contributions for all employees — i.e. all local and foreign employees, including casual, part-time and temporary employees.
Our team at SCI can take this load (payroll management) of your head so that you can concentrate on running and managing your business.
Accounting & Bookkeeping
Since all companies registered in Singapore must keep proper books of accounts as stipulated by the Singapore Companies Act, engaging a Singapore company registration and business specialist such as SCI to help with your taxes, accounting and other corporate services is a good idea. This will help you fulfil the compliance requirements stipulated by ACRA and IRAS and avoid unnecessary penalties.
Generally, our services include maintenance of the general ledger, accounts payable ledger, and fixed assets ledger; maintenance of accounts receivable; bank reconciliation; cash flow /budgeting; financial statements & monthly reports monthly; quarterly and annual reviews; books clean-up; management reporting and financial analysis.
As, with effect from December 2, 2013, Singapore companies which are either unlimited or limited by shares are required to file a full set of financial statements in XBRL format (according to a minimum requirement list within the new ACRA Taxonomy 2013), our team at SCI is trained to take care of that.
Appoint an Auditor
All Singapore incorporated companies must appoint an auditor within three months of incorporation, unless the company is exempted from audit requirements. To be exempted, the number of individual shareholders in the company must be less than 20 with no corporate shareholders, and its annual turnover must be less than S$5 million.
SCI can help you with the appointment of an auditor as well.
Bank Account Opening
A company is a separate legal entity from its directors and shareholders; therefore it will need its own bank account. As Singapore has an array of banking options available to companies, with different banking requirements and application procedures, SCI can assist you in choosing the right bank for your needs.
Generally, you will need the following to open the account: a resolution by company’s board of directors sanctioning the opening, copy of the certificate of incorporation, copy of the business profile, copy of company’s MAA, copies of the passports (or Singapore national identification cards), and proof of residential addresses of the directors and ultimate beneficial owners.
Annual Filing Requirements
SCI takes care of these following every procedure judiciously if you choose to engage our services.
Annual General Meeting (AGM)
Every company must hold its AGM every calendar year, with its financial statements tabled at the AGM for shareholders’ approval. We can help you organise this in Singapore. Do note that it’s always advisable to hold your AGMs in Singapore to enjoy the tax benefits available for Singapore tax-resident companies.
Annual Returns with ACRA
Every company must file its annual returns within one month of its AGM date.
Annual Taxes with IRAS
Another mandatory and cumbersome requirement is taxation. We can assist in dealing with all the tax aspects of your business including statutory tax filings, identifying tax efficient strategies, and personal and corporate tax compliance.
SCI’s assistance also extends to taxes on property, trust and partnership, as well as on stamp duty.
Fiscal Year Determination
Each company in Singapore has to determine its financial year end (FYE), which does not necessarily be December 31.
One tip that SCI always gives to its clients is to keep the company’s FYE within 365 days in order to enjoy the zero tax exemption for new start-up companies (full tax exemption on the first S$100,000 of normal chargeable income for its first three consecutive years of operations).
Estimated Chargeable Income (ECI)
ECI is an estimate of a company’s chargeable income for a Year of Assessment, which must be submitted to IRAS within three months after the end of the financial year.
SCI can advise you on how to calculate this to enjoy maximum tax benefits.
Unique Entity Number (UEN) Disclosure
As noted above, UEN is now the standard identification number for entities to interact with government agencies. According to the Companies Act, every company must have its UEN on all business letters, statements of account, invoices, official notices, publications, etc.
SCI can assist you in preparing all these documents in compliance with ACRA’s UEN disclosure requirement.
Additional Services Provided by SCI
With mail and call forwarding service, and a dedicated phone line
SCI can offer you a CBD business address with mail forwarding on a weekly, bi-weekly, or monthly basis, depending upon your needs. This address can be used on your business cards, letterheads and corporate collaterals. Assistance is also available with a dedicated Singapore business telephone number and personalized telephone answering.
Document Drafting and Vetting
Properly-worded, with proper grammar and legally sound documents are essential to the success of a company. But if you’re a start-up or a SME, drafting these documents will be costly.
SCI provides a cost-effective document drafting services to suit every company’s need.
Below is the list of documents we can assist you with:
- Employment related matters
- employment agreements
- secondment agreements
- consultancy/Independent Contractor agreements
- confidentiality/Non-disclosure agreements
- employee Handbook
- employer Policy and Procedures
- Commercial matters
- distribution agreements
- license agreements
- assignment agreements
- service agreements
- confidentiality/Non-disclosure agreements
- lease agreements
- loan agreements
- guarantees and indemnities
- Corporate matters
- shareholders agreements
- increase or reduction in share capital
- appointment or removal of directors
- directors service agreements
Web Design and Hosting
In today’s internet age, it is very important to register your domain address on the web and use search engine optimization techniques to maximize the traction on your website. Here, you have to take a call whether to choose a .sg, .com or any other domain extension, depending on the market you’re targeting. Remember to choose the extension keeping in mind your business expansion plans and the long-term vision.
SCI has an experienced web team, which can take care of your entire web presence – from domain name registration and web designing and hosting, to providing technical support.
Company Strike-off or Deregistration
The Singapore Companies Act allows ACRA strike a company off the register if:
- the company has ceased operation
- it is not and will not be involved in any court proceedings, whether in or outside Singapore
- it has no assets and liabilities;
- it has no outstanding penalties or offers of composition owing to ACRA and not indebted to other government departments
- it has no outstanding tax liabilities owing to the Inland Revenue Authority of Singapore (“IRAS”);
- it has no outstanding charges in its charge register eg. no mortgages etc.
- none of the officers of the company have outstanding ACRA summonses
The procedure for striking-off a Singapore company generally takes about five months.
After receiving the strike-off application, ACRA will send a “striking-off notice” to the company at its registered office address, its directors at their residential address, and IRAS, within 14 days. A period of one month is given in the “striking-off notice” to anyone that may wish to raise any objection to application. After the expiry of this, a notification of the intention to strike this company off the registerthree3 months later will be made in the Government Gazette. Any interested person can still raise an objection to the application during these three months.
At the end of this period, a final notification will be made stating that the company has been struck off the Register. The date that the company is struck off will also be stated in the final notification.
If you are thinking of winding up your business in Singapore for any unfortunate reason, SCI can assist you in getting your company deregistered.
Stay in compliance with statutory regulations in Singapore
We are constantly kept abreast of Singapore’s regulatory compliance requirements. Engage our compliance specialists today to fulfil your compliance requirements.