Statutory Compliance for Singapore Companies

Last modified: June 27, 2016

Statutory-Compliance-for-Singapore-Companies

The entrepreneurs, investors, and qualified professionals from the varied fields look upon Singapore as an investment and career destination. The regime offers lower tax rates and politically stable governance. It caters to the infrastructure and communication requirements of the modern businesses.

Singapore’s geographical location allows the businesses to participate in increasing amount of foreign trade. Global corporate set up a company in Singapore to keep an eye on the vast Asian consumer base. Though Singapore is a pro-business regime, it also asks the companies operating under its jurisdiction to follow strict statutory compliance requirements.

Corporate Secretary

A newly incorporated Singapore company must hire an experienced and qualified company secretary to take care of its compliance needs. The appointed professional must have the knowledge of the procedures and sufficient experience to discharge the duties required of a company secretary.

It is an important position and the professional is counted among the officers of the company and serves as the liaison between the organization and the authorities. The sole director of a company is not allowed to hold this position.

Singapore Resident Director

A Singapore company must hire a professional to act as its local resident director. Singapore business incorporation requires at least one shareholder. In the case of local incorporation, this entity can act in the director’s capacity. There are no restrictions on the number of directors, a company can appoint.

The foreign entrepreneurs or the representatives of the foreign corporate need Employment Pass or the Entrepreneur Pass (EntrePass) to relocate and work in Singapore. These pass holders can act as the directors of a Singapore company. Alternatively, foreigners can appoint a nominee local resident director, in order to comply with the requirements.

Registered Address in Singapore

As per the mandates of Accounting and Corporate Regulatory Authority (ACRA), a Singapore company must provide a registered local address for its offices. ACRA do not accept a P.O. Box address as a valid address for the purpose.

The entrepreneurs can use residential addresses of their URA and HDB apartments for the purpose under the Home Office Scheme. However, they must obtain permission from the proper authorities.

Fixing Company’s Financial Year-end

For the Singapore accounting purposes, every company must decide when its financial year will start and end. They are free to arrange their Financial Year-End (FYE) date as per their convenience. However, Singapore companies that are established by the foreign-registered companies must set their FYE to match with the FYE of their parent.

Auditor

It is required for the Singapore companies, unless exempted, to appoint an auditor within the 3 months from the date of their incorporation. Only Exempt Private Companies (EPCs) are exempted from this requirement.

GST Registration

Singaporeans have to pay 7% of tax on consumption of goods and services in Singapore. It is known as the GST (Goods and Services Tax), which in other countries is known as the VAT (Value Added Tax).

A company needs to ascertain if it needs to register for the GST. Only a GST registered business can levy 7% of GST to its customer. The business, then have to file it with the IRAS (Inland Revenue Authority of Singapore)

Applying and Acquiring Business Specific Licenses and Permits

A newly incorporated Singapore business may have to apply and get licenses and permits to conduct certain types of business activities. If it is the case, then, it is better to get them before starting company operations. Fortunately, only a few business activities in Singapore require licenses.

Financial Record Keeping

Maintaining up-to-date accounting and financial records of the daily transactions of the business is an essential part of the statutory compliance dictated by the IRAS. The businesses benefit from this practice as it enables them to have an intimate knowledge of their cash flow. It is mandated for them to maintain the financial records for 5 years.

Directors’ Disclosure

The directors of a company must disclose information about their affairs, which will enable the company to avoid conflict of interest or the perception of conflict of interest. They must also disclose any material personal interest that may influence the company affairs.

Filing Requirements

Every Singapore Company must file appropriate financial statements with the ACRA officials on or before the due dates. They must also file their taxes with the IRAS.

Notification of Changes

It is required for the companies to convey changes in the officers of the company and such information to the ACRA officials. The company details lodged with the Company Registrar must always show the latest information.

Company’s UEN Disclosure

Every newly incorporated Singapore company is provided with the Unique Entity Number (UEN). It is required that company’s letters, statements of accounts, official notices, invoices, and publications must carry UEN and its registered name. The companies incorporated before, 1 January 2009 should use their ACRA registration number for the purpose.