WHAT IS A COMPLIANCE SERVICE IN SINGAPORE?
Simply said, the term “compliance” refers to adhering to a set of internal or external norms or requirements. In terms of business, this involves abiding by the commitments, laws, and rules that have been established. It also entails ensuring that your staff complies with applicable rules and regulations.
Small and medium-sized enterprises (SMEs) are subject to fewer external rules and regulations than larger companies like multinational corporations, but this does not lessen their significance.
This blog post’s goal is to educate small business owners and managers about what it means to be compliant, why it’s important, and some important steps you can take to ensure that your company is – and stays – compliant.
WHAT MAKES COMPLIANCE CRUCIAL FOR SMEs IN SINGAPORE?
The basic goal of compliance is to spot and avoid any red flags that may arise in your company. Similar to how failing to comply seriously could lead to future expensive fines or penalties.
No company wants to become embroiled in long legal battles or be charged with breaking the law. The reputation of your business may suffer if you fail to comply with specific regulations.
In other circumstances, you can suffer monetary loss. Hearings and appearances in court can have a significant negative impact on your company’s operations. Hire a compliance specialist to make sure you comprehend all legal requirements.
MANDATORY COMPLIANCE STANDARDS FOR SINGAPOREAN BUSINESSES
The following business regulations are necessary for Singaporean firms.
1. Registered Office
A local registered office address is required if you want to conduct business in Singapore lawfully. It cannot simply be a post office box number. Additionally, the office must be available to the general public during regular business hours for at least three hours each business day.
2. Company Secretary
A corporation in Singapore is required to have at least one company secretary, who must be a local citizen. The Singapore company secretary’s responsibility is to make sure the company complies with Singapore’s reporting and regulatory standards. The position of a company secretary cannot be unfilled for longer than six months at once.
As long as he or she is not the only director of the company, a director may also act as a secretary.
3. Resident Director
At least one director of a Singapore firm must be a citizen or permanent resident of Singapore, meaning they must live there most of the time. A foreigner who has a current Employment Pass (EP) and who is employed by the company for which they are a director may, under certain conditions, serve as the resident director.
Moreover, the director needs to:
- Possess a minimum age of 18
- Not having an unpaid bankruptcy
- Not currently be barred from serving as a director by the government of Singapore
4. Data Protection and Data Protection Officer
Every organization is expected to have a data protection policy and designate at least one data protection officer (DPO) under the Singapore Personal Data Protection Act (PDPA).
5. Company Name and Unique Entity Number (UEN) Display on Necessary Documents
A Unique Entity Number (UEN), a number used for government interactions such as tax filing, is given to a firm when it is incorporated by the Accounting and Corporate Regulatory Authority (ACRA).
Every document that a Singapore firm produces, including letters, invoices, statements of account, and official notices and publications, must include both the company’s name and UEN.
Although a company is not needed to have a seal, if it does, the name of the company must be visible on it.
6. Maintaining Records and Registers for the Company
A Singapore company must maintain specific company registers, some with ACRA and some at the company’s registered office.
The business must register with ACRA and keep accurate records of its directors, chief executive officers, secretaries, and auditors. ACRA requires the company to file specific shareholder resolutions that bind a class of shareholders as well as any charges made against the company’s assets.
There are three distinct register types:
- A list of major stockholders
- Register of registrable controllers (essentially, any individual or group that owns at least 25% of the corporation)
- Any director who is used to acting by the views, instructions, or directives of another person—whether formally or informally—is considered a nominee director in the Register of Nominee Directors
In Singapore, a license is necessary for many enterprises to function. Depending on the sector in which the business operates, different regulatory authorities in Singapore are in charge of issuing licenses.
A private corporation must convene its annual general meeting (AGM) no later than six months following the conclusion of its fiscal year. Within four months of the conclusion of the fiscal year, a publicly traded firm is required to hold its AGM.
Some private corporations are exempt from the requirement to hold an AGM if, for instance, the firm is dormant or the members vote resolutions exempting the company from holding one. But an AGM is generally required by businesses.
A Singapore firm must, unless exempt, submit an annual return to ACRA using the BizFile+ platform. In the case of a private company, the annual return must be submitted within seven months, and in the case of a public company, within five months of the financial year’s conclusion.
Exempt private companies (EPC) are allowed to file a streamlined annual report without submitting financial statements if their annual financial accounts are not audited. A private firm known as an EPC is one with no more than 20 stockholders, none of which are corporations.
All other businesses must provide their financial statements in XBRL filing (eXtensible Business Reporting Language) format in their yearly returns. The financial accountants or auditors of the organization will often convert the financial statements to XBRL.
10. Accounting and Bookkeeping
Every business in Singapore is required to implement the following accounting and bookkeeping compliance standards:
- General accounting
- General ledger, accounts payable ledger, and fixed assets ledger maintenance
- Keeping track of your outstanding debt
- Banks are compared
- Cash flow and planning
- Monthly reports and financial statements
- Annual and quarterly reviews
- Cleaning up books
- Financial analysis and management reporting
11. Date of Financial Year-End
Every business should choose a fiscal year-end. The 31st of December is the customary year-end date in Singapore, thus many businesses will use that day. This, however, relates to the conclusion of a company’s yearly accounting cycle, which does not always occur on December 31.
Unless the Registrar grants a request from the company, a company’s first financial year cannot be more than 18 months.
12. Appointment of Auditors and Audit Exemptions
If a firm is not exempt as a small company, the directors must name an auditor within three months of the company’s incorporation. Every AGM for the company reappoints the auditor.
Private companies that met two of the following three requirements in the two fiscal years prior are considered small businesses:
- The company’s annual income is no more than $10 million
- At the end of each financial year, the company’s total assets are not worth more than S$10 million
- At the end of each fiscal year, no more than 50 workers are working for the company
13. Maintaining Accounts and Records
All Singaporean businesses are required to maintain accurate financial records of all transactions for a minimum of five fiscal years.
14. Employment Law
The Singapore Employment Act outlines the rights and responsibilities of employers and employees in Singapore and must be followed about any matters involving the workforce of the organization.
Even though the business is not required to withhold income taxes from employee salaries, it is nevertheless required to provide a statement of earnings for each employee to the IRAS at the end of each calendar year.
The employer is required to make contributions to the Central Provident Fund at the appropriate contribution rate for any employees who are Singapore citizens.
15. Corporate Income Tax
Every company, including branches of foreign corporations, is required to file an annual income tax return. The filing deadlines are as follows:
- Eleven months after the company’s fiscal year ended (if filing a paper return)
- The company’s fiscal year ends on the 15th day of the 12th month following that (for online filing)
16. GST Registration
A consumption tax known as the Goods and Services Tax (GST) in Singapore is imposed on the majority of goods and services offered there.
A business must register for GST with the Inland Revenue Authority of Singapore (IRAS) if its taxable revenue for the previous year was more than S$1 million. Companies that don’t meet the turnover requirement might nonetheless register.
The list above includes each criterion for compliance for Singapore companies to conduct business in Singapore. Relin Consultants, led by experts in the field of regulatory compliance, addresses all compliance needs for your business. Contact us right away to meet your compliance needs.