One of the numerous booming industries open to entrepreneurs in Singapore is the fintech industry. The Monetary Authority of Singapore (MAS) recently announced significant financial incentives for FinTech businesses. The FinTech Innovation Lab, which MAS also intends to create, will serve as an innovation hub.
There is a very excellent reason why the nation is enticing more business people to enter the Fintech sector. This is because the financial services industry will become more efficient and accountable due to fintech.
The FinTech Office was formed by the Singaporean government in May 2016. The Economic Development Board, Infocomm Media Development Authority, Enterprise Singapore, Monetary Authority of Singapore (MAS), and other government agencies make up the virtual organization known as the FinTech Office.
The FinTech Office serves as a one-stop shop for providing guidance to fintech businesses on government grants and initiatives relevant to the industry as well as helping them to maintain regulatory compliance.
What The Industry Practice Is Like –
“Financial technology” is known as fintech. The technology incorporated into financial services is how it is defined. The use of technology in the development and distribution of financial services and products is the focus of fintech. PayPal is an illustration of a business that was a pioneer in incorporating fintech into its offerings.
Artificial intelligence, cryptocurrencies, insurtech, robo-advisers, and mobile payment platforms are a few examples of fintech. Services like Apple Pay and Google Pay fall under this category. Depending on your business strategy and operations, the Fintech industry in Singapore is subject to a number of restrictions.
HOW DOES THE PROCESS OF INCORPORATING A FINTECH COMPANY IN SINGAPORE DIFFERENT FROM THE NORMAL SINGAPORE COMPANY REGISTRATION PROCEDURES?
It was hard and challenging to create a fintech company in Singapore before fintech disrupted the old financial industry. This was a major obstacle for fintech businesses at the time, as well as a challenge for the Singaporean economy.
Through major reductions in red tape and regulatory burdens, MAS has efficiently adapted to the changes in financial services in Singapore. MAS established a new fintech regulatory sandbox program for the fintech sector in 2016 in an effort to promote innovation and make Singapore the world leader in fintech.
A developing fintech company in Singapore can now operate within certain areas of operation to innovate in the industry because of the freedom to test new ideas within this regulatory sandbox.
For individual fintech trials, MAS has allotted the funds necessary to ease any particular regulatory requirements. These legal requirements are:
- Asset maintenance requirement
- Board composition
- Cash balances
- Credit rating
- Financial soundness
- Fund solvency and capital adequacy
- License fees
- Management experience
- MAS guidelines, such as outsourcing and technology risk management
- Minimum liquid assets
- Minimum paid-up capital
- Relative size
- Reputation
- Track record
As long as they comply with all the regulatory and legal standards, a Singaporean fintech company can launch any relevant service offerings after successfully completing an experiment under this regulatory sandbox.
HOW TO REGISTER FOR THE SANDBOX?
The applicant must start by downloading the required registration forms from MAS’ Regulatory Sandbox Portal in order to sign up for Singapore’s Fintech regulatory sandbox. Within 21 working days of receiving the request for registration, MAS will process it and let them know whether or not their application was approved.
In the event that the application is originally accepted, applicants will enter an evaluation phase where they will closely collaborate with MAS to make changes to the application. Depending on the situation, this review phase will last for a different amount of time.
When the application has been fully granted, MAS will notify the applicant in writing of the approval, the regulatory relaxations that have already been agreed upon, and the duration of the access to the sandbox environment.
A fintech company in Singapore must disclose to customers its status while operating the fintech regulatory sandbox and warn them of any potential dangers.
The company’s information must also be made available on the Regulatory Sandbox Portal of MAS.
The applicant must submit a change request to MAS one month before implementing any changes to the fintech company in Singapore while it is still in the fintech regulatory sandbox.
WHAT LICENCES AND PERMITS ARE NEEDED TO START A FINTECH BUSINESS?
Singapore’s Fintech industry must adhere to the rules that have been established there by the local government. The applicant can anticipate being subject to some of the following regulations if you own a Fintech company:
- The Banking Act – This law is relevant if the applicant offers financial services online, such as receiving payments.
- Finance Companies Act – This law is applicable to companies that take fixed and saving deposits as well as credit facilities.
- The Money-Changing and Remittance Businesses Act — This law applies to companies that deal in foreign exchange and/or outbound payments.
- Insurance Act – This law applies to companies that use insurance.
- Moneylenders Act – This law applies to companies that engage in the business of lending money.
- Personal Data Protection Act – This law applies to companies that gather, utilize, and/or disclose a person’s personal information for business purposes.
- The Payment Systems (Oversight) Act – This law applies to companies that provide prepaid or stored value wallet services.
- Securities and Futures Act – This is applicable to businesses that trade certain instruments, and/or deal in securities or manage funds of a certain amount, amongst others
- Financial Advisers Act – This law applies to companies that sell collective investment schemes, arrange life insurance products, or provide information on investment goods.
BENEFITS OF INCORPORATING A FINTECH COMPANY IN SINGAPORE
- Singapore provides a supportive regulatory framework for fintech businesses and encourages innovation and industry growth.
- Through programs like the MAS FinTech Regulatory Sandbox, which enables businesses to test new ideas in a controlled environment, the government offers considerable support.
- With a corporate tax rate of 17%, the nation is a desirable location for enterprises due to its low tax rates and different tax advantages.
- Finding excellent employees for fintech organizations is simple to the skilled workforce in the financial and technology sectors in Singapore.
Reach out to us at Relin Consultants for further assistance.
FAQs
What are the benefits of incorporating a fintech company in Singapore?
Due to its beneficial laws, solid financial infrastructure, and support from the government, Singapore is a favored destination for fintech businesses. Incorporating a fintech business in Singapore has its benefits, including easy access to a skilled workforce, a sound legal system, business-friendly tax laws, and excellent transportation options.
What are the steps to incorporate a fintech company in Singapore?
These steps should be followed to form a fintech company in Singapore:
- Pick a name for your business and have the Accounting and Corporate Regulatory Authority (ACRA) approve it.
- File a company registration with ACRA.
- Obtain the required licenses and permits from the appropriate regulatory organizations.
- Establish a business bank account in Singapore.
- Employ people and secure the necessary work permissions.
How long does it take to incorporate a fintech company in Singapore?
The complexity of the business and the thoroughness of the application will affect how long it takes to establish a fintech firm in Singapore. The approval process for a company name typically takes 1-2 days, while ACRA registration typically takes 1-2 weeks.
What are the corporate tax rates in Singapore?
The corporate tax rate in Singapore is 17%. However, there are various tax incentives and exemptions available for qualifying companies.
Can foreign individuals or companies incorporate a fintech company in Singapore?
Yes, foreign individuals or companies can incorporate a fintech company in Singapore. At least one local resident director is required for fintech company registration.
