Business compliance requirements in Singapore

1. Local Singapore office address and hours

First, concerning the Business compliance requirements, Section 142. (1) of the Companies Act 1967 states that :
“every company must have a registered office within Singapore to which all communications and notices may be addressed and which must be open and accessible to the public for no less than three hours during ordinary business hours, every business day”.

However, companies which do not own or rent a physical office in Singapore may choose to use a virtual office services.

2. Local resident director

According to section 145 of the Companies Act 1967, the appointment of at least one director, ordinarily resident in Singapore, is required. The director could be a citizen, a permanent resident or a Singpass owner. In the event of sole proprietorships, the foreigner holding an “Entrepass” or the local resident may be appointted as director.

In addition, under the provisions of the same article, the director shall:

3. Company secretary

Every company must appoint at least one corporate secretary, each of whom must be a natural person who has their principal or only place of residence in Singapore, within six month of a Singapore company’s incorporation (Section 171 (1) of the Companies Act 1967). Their main role is to represent the company to the Singaporean authorities.

4. At least one shareholder

Except for sole proprietorships, it is required to have at least one shareholder (natural person or legal entity), and up to 50 shareholders. Furthermore, it is possible that all shares are held by foreign shareholders. Beyond 50 shareholders, the company becomes a public company.

5. Unique Entity Number (UEN)

When a company is incorporated, the Accounting and Corporate Regulatory Authority (ACRA) will provide the company with a Unique Entity Number (UEN) which is an identification number used for government interactions such as tax filing. According to the Companies Act, the UEN needs to be listed on all business letters, statements of account, invoices, official notices, publications, etc in order to comply with the business compliance requirements.

All companies engaged in export, import, or trans-shipment activities in Singapore are required to register the company with Singapore Customs as an importer, exporter, common carrier, and others to obtain a UEN.

The UEN makes businesses appear more legitimate to customers, suppliers and potential business partners.

It is required for companies to protect all processed Personal Data (PD) belonging to their clients, employees, or any other individuals. The two main legal standards in this area are the Personal Data Protection Act (PDPA) and the General Data Protection Regulation (GDPR).

Under the Singapore Personal Data Protection Act (PDPA), besides the adoption of a protection policy, companies must appoint at least one Data Protection Officer (DPO). For all EU residents’ personal data collected and processed, companies must comply with the GDPR requirements, one of the most important business compliance in Singapore.

In addition, other legal requirements may be expected in some cases.

1. Copyright/patents

Some companies, such as technology-based start-ups, need to acquire a license agreement that provides a company the right to commercially use intellectual property (patent or copyright).

2. Business licenses and permits (if required)

Certain business activities are regulated by government authorities, and thus require a Singapore Business license or permit to operate, such as real estate agencies, importers/exporters, hotels, wholesalers, and retailers of liquors.
In general, licenses may take between two weeks to two months to be issued.

General requirements

1. Record keeping of the company

The provisions of section 395 onwards of the Companies Act govern the form and type of records that each company must keep. Certain records must be provided to ACRA such as contact details.

These may include a:

2. Annual General Meeting (AGM)

A general meeting called AGM must be held after the end of each accounting period starting from the sixth month of the incorporation of the private company (Section 175 (1), Companies Act).

3. Annual filing requirements

Annual returns with ACRA: Following the AGM, a Singaporean company has one month to deliver its annual return to ACRA in XBRL format via the BizFile+ portal, which includes the company’s financial statements.

Where financial statements cannot be audited, companies less than 20 shareholders may be exempted from providing an annual return (section 205, Companies Act) according to Singapore’s business compliance.

4. Appoint an auditor

Within three months after incorporation of the company, the directors of a company must appoint one or several accounting entities to be the auditor of the company (Section 205. Companies Act). Small companies can be exempt from this requirement.

Under the Companies Act, a company is considered as a small company if:

First, it is a private company throughout the financial year.

Then, it meets any two of the following requirements for each of the two fiscal years preceding the fiscal year:

Accounting requirements

1. Accounting record keeping

Singaporean companies are subject to the same accounting record requirements (Section 199, CA 1967). Records must show financial statements and transactions. As such, balance sheets must comply with accounting standards (Section 209A, CA 1967).
Also, the company directors are obliged to lay the financial statements for the previous financial year, before every annual general meeting.

2. Fiscal year determination

According to Section 198 of the CA, as soon as a company is set up, an accounting year end must be decided, known as the financial year end (“FYE”).
Accounting periods can be as short as twelve months (ending on 31 December) or as long as 52 weeks (ending on 30 December). The most common FYE is 31 December.

3. Bank account opening

With the exception of sole proprietorships, companies are a separate legal entity from their directors and shareholders. As such, it is necessary for proper accounting to open a bank account for the company.

1. Annual filing requirements

Annual taxes with IRAS: Each year, companies, with the exception of sole proprietorships, must submit an annual income tax return with the Inland Revenue Authority of Singapore (IRAS). There are three types of forms : Forms C-S, Forms C-S Lite, Forms C. The form’s selection is based on certain criteria including annual income.
The deadlines for filing are:

2. Goods & Services Tax (GST)

The GST is an indirect tax, set at 7% in Singapore, applied to the selling price of goods and services provided by some business entities. The Goods and Services Tax Act (1993) governs matters relating to this tax.

Any company registered in Singapore with an annual turnover in excess of SGD 1 million must register to collect the GST with the IRAS.

3. Estimated Chargeable Income (ECI)

ECI is an estimate of your company’s taxable earnings (after subtracting tax-deductible costs) for a certain tax year (YA). With some exceptions, a Singaporean company must file its ECI within three months of the financial year end.

The main Singapore legislation influencing the terms of employment agreements that a company signs with its employees is the Employment Act (EA). The law covers both local and foreign employees. The Employment of Foreign Manpower Act, which establishes an employer’s additional responsibilities and obligations for employing foreigners, applies to foreign employees who have a work permit.
Every company must comply with the applicable obligations imposed on employers under the EA, such as payroll management or working conditions. In addition, although a Singapore incorporated company is not required to deduct any tax from payroll, it is required to make a contribution to the Central Provident Fund (CPF) and the fund of Skills Development Levy (SDL) for each Singapore citizen or permanent resident employee.

1. Competition Act

Finally, every company, especially foreign ones, must comply with the legislative norms on competition in the course of its activities. To this end, the Competition Act 2004 provides legal rules in the event of mergers/acquisitions, price fixing, etc.