When you incorporate a company in Singapore, you are obliged to comply with the statutory requirements stipulated in the Singapore Companies Act, and to submit annual filing requirements to Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). It is imperative for all companies to stay in compliance with the statutory regulations to avoid penalties and quite possibly, legal repercussions.
Financial Year End
Each company in Singapore has to determine its Financial Year End (FYE). The FYE is the completion of an accounting period. A company’s financial year-end does not necessarily need to fall on December 31, and can actually fall on any day throughout the year.
A company’s fiscal year is the same as its financial year. The date for the company’s FYE is left for the company to decide. Most companies use either the end of the calendar year (December 31) or the end of any of the quarter (March 31, June 30, or September 30) as their fiscal year end date.
Did You Know? It is best 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 $100,000 of normal chargeable income for its first three consecutive YA).
Appointment of Auditors
All Singapore incorporated companies must appoint an auditor within 3 months from the date of incorporation, unless it is exempted from audit requirements. To be exempted from audit requirements, a company must satisfy all of the following criteria:
- The Company does not have any corporate shareholder;
- Total number of individual shareholders must be less than 20;
- Annual turnover of the company must be less than S$5 million.
Company Registration Number Disclosure
Singapore Companies Act requires every company to have the Company registration number, known as Unique Entity Number (UEN) on all business letters, statements of account, invoices, official notices, publications, etc.
Notification of Changes
It is the company’s responsibility to update the Registrar (ACRA) of any changes in the company pertaining to the company’s shareholders, share capital and officers within the stipulated time. Failure to do so will incur penalties.
Business Licenses and Permits
Some business activities in Singapore are subject to regulation by government authorities. Even if your business firm has been registered you cannot begin operation unless you have the necessary approval or license from the relevant government authorities.
Registered Office Hours
All Singapore Company must have a registered office address in Singapore and the office must be opened to public for minimum of three hours per day during normal business hours on weekdays.
Central Registration (CR) Number
If your business activities involve import and export or Tran-shipment in and out of Singapore, your company will have to register with the Singapore Customs and obtain a CR Number.
Singapore Goods and Services Tax Registration
Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. Goods exported from Singapore and international services provided from Singapore are exempt from GST. The current GST rate is 7%.
All Singapore companies must register for GST if their annual taxable revenue is more than S$1 million, or currently making taxable supplies and the annual taxable revenue is expected to be more than S$1 million. The business must register for GST within thirty days from the time it is deemed liable.
You may also choose to register for GST voluntarily. Approval for voluntary registration is at the discretion of the Comptroller in IRAS. Once approval is given, you must remain registered for at least two years.
Registration with Singapore Central Provident Fund (CPF) & SDF
The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and employee contribute a percentage of the monthly salary to the fund. CPF contribution by the employer is mandatory for all local employees who are Singapore citizens or permanent residents earning more than S$50 a month. The maximum CPF contribution rate for employer and employee is 14.5% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status, etc.
Employment pass holders do not have to contribute to CPF.
However, the employer (company) is required to contribute a fee to the skill development fund(SDF). SDF contribution is payable by employers for all employees up to the first $4,500 of gross monthly remuneration** at the rate of 0.25% or $2, whichever is higher.
Annual General Meeting (AGM) and Filing of Annual Returns (AR) in Singapore
Every Singapore Company needs to hold its Annual General Meeting (AGM) every calendar year and its financial statements are to be tabled at the AGM for the shareholders’ approval.
The Singapore Companies Act (Cap.50) states that every company is required to hold the Annual General Meeting (“AGM”)
- once in every calendar year
- 15 months from the date of the last AGM, whichever is the earliest
EXCEPTION:
Newly incorporated companies are allowed to hold the first AGM within 18 months from the date of incorporation.
An AGM can be:
- physically held anywhere in the world, whereby the shareholders meet, or
- by way of written resolutions, whereby a meeting is not required.
The following matters are discussed in an AGM:
- To approve the Director’s Report/ Audit Report
- To approve Directors’ fees, remuneration and emolument;
- To re-elect the Director(s) (if applicable)
- To reappoint auditors
- To declare dividends, if any
- To transact any other business
Requirement for Accounts
Where an AGM is held, directors of the company are required to lay before the shareholders, the relevant documents such as the company’s annual financial statements compiled in accordance with the Financial Reporting Standards of Singapore which must consists of:
- Report of Directors & Statement by Directors
- Independent Auditors’ Report (if required)
- Balance Sheet
- Profit and Loss Statement
- Statement of Changes in Equity
- Cash flow Statement
- Corresponding Notes to Financial Statements
Note: Section 201 of the Companies Act states that the financial statement must not be more than 6 months old from the date of the AGM.
Requirements of Directors Reports/Audited Accounts:
A company is not required to prepare an audited report if
- The sales turnover does not exceed the $5 million
- It has not more than 20 shareholders
- It does not have a corporate shareholder at any point in time for the particular financial year
The company which meets with the above requirements can prepare an unaudited report which is commonly known as directors’ report.
Audited reports must be prepared if the Company has
- a corporate shareholder
- Sales turnover exceed S$5 million
- has more than 20 shareholders
Note: A company is considered dormant during a period in which no accounting transaction occurs. Dormant companies can be exempted from preparing audit reports, but will still be required to prepare unaudited report.
Requirement for Annual Return
All locally incorporated companies are required file their annual returns under the Companies Act, within one month of holding the AGM or the passing of written resolutions in place of the AGM.
The following information of the Company is required for filing of annual returns:
- Name & Registration Number
- Registered address
- Principle activities
- Company type during financial year
- Summary of Share Capital and shares
- Registered Charges
- Information of Officers of the Company
- Information of Shareholders
- Dates of Annual Returns, Annual General Meeting and Accounts
- Financial statements (XBRL), if necessary
Filing Financial Statements in XBRL
The company would be required to file their financial statements in XBRL format during the filing of Annual return, if your company is:
- insolvent (Total Assets – Total Liabilities = Negative Value)
- has a corporate shareholder for the financial year
Extension of Time
If your company requires more time to comply with the requirements for preparation of the financial statements for the holding of AGM and the filing of AR, a one time extension of time of either one or two months before the deadline to hold the AGM can be applied.
Failure for non compliance
Failure for non compliance with the requirements for holding of AGM and filing of AR will incur penalty and/or court prosecution. The penalties imposed are dependant on the length of default and the number of sections (175, 197 and 201) of the Companies Act you have breached.
| Length of Default (Days) | Late Lodgement Fee |
| Not more than 30 days | $60 |
| Between 31 days to 60 days (Both days inclusive) | $120 |
| Between 61 days to 90 days (Both days inclusive) | $170 |
| Between 91 days to 180 days (Both days inclusive) | $220 |
| Between 181 days to 365 days (Both days inclusive) | $250 |
| Between 366 days to 730 days (Both days inclusive) | $350 |
| Between 731 days to 1095 days (Both days inclusive) | $350 |
| More than 1096 days | $350 |
Note: Obligations of a Director under S175, S197 and S201 Singapore Companies Act
Local companies to prepare accounts for Annual General Meeting (AGM) and file their Annual Returns under S175, S197 and S201 of the Companies Act
- Section 175 -to hold its AGM within 18 months of its incorporation. Thereafter, once every calendar year but not later than 15 months from the date of the last meeting.
- Section 201 -the accounts must not be made up to a date more than 6 months from the date of the AGM.
- Section 197 -to file the Annual Return within 1 month after holding the AGM.
Failure to comply – Late filing penalties and/or composition fines
- Fine of $5,000 & default penalty-s 175 & 197
- Fine of $10,000 or up to 2 years imprisonment for s 201
Disqualification for persistent default: 3 convictions within 5 years
Certificate of Compliance
Effective April 2010, companies that comply with all the 3 requirements under sections 175, 197 and 201 of the Act will have a green tick (
) reflected in ACRA’s online Directory and will be eligible for a Certificate of Compliance whilst those not in compliance with any or all the requirements will receive a red cross (
) and will not eligible for the certificate.
Need Help with Filing of your AGM, AR and XBRL in Singapore?
Rikvin’s can assist you with the preparation and filling of your AGM, AR and XBRL. Please contact us at info@rikvin.com or +65 6438 8887.
Annual Filing requirements with Inland Revenue Authority of Singapore (IRAS)
ECI is an estimate of a company’s chargeable income for a Year of Assessment (YA). IRAS requires each company to submit an ECI for the Year of Assessment within three months after the financial year ends. It is mandatory to file an ECI regardless of the amount of income. A company with a zero income will file a ‘NIL’ ECI.
Accounting Records
All Singapore Company must prepare the accounts which must consist of Profit and Loss Account, Balance Sheet, Cash Flow Statement, and Equity Statement in accordance with the Singapore Financial reporting standard (SFRS). The accounting records must be kept for 5 years.
Tax Return Filing
The filing deadline for corporate income tax return is 30 November. Documents to be submitted are audited or unaudited Report and tax computation (Form C).
Submission of Financial Report – audited and unaudited
Every company is required to submit a Financial Report. The report consists of financial statements such as balance sheet and income statements; supporting notes and disclosure of significant accounting policies applied by the company; disclosure of company’s operations; and shareholders and directors’ interests
Unaudited Report
A company is not required to prepare an audited report if the sales turnover for the financial year does not exceed the $5 million; it has not more than 20 shareholders and does not have a corporate shareholder.
Audited Reports
A Company must audit its accounts, if the Company has a corporate shareholder and or the, sales turnover exceed S$5 million and has more than 20 shareholders
Failure for non compliance
Failure for non compliance with the above requirements will incur penalty and/or court prosecution.
Depending on the type business you would like set up in Singapore, it is sometimes necessary to obtain a license and/or permit when you register your business with Accounting and Corporate Regulatory Authority (ACRA). ACRA’s automated system will indicate if another approving authority is required to grant a license or permit during the application for name approval.
Although most businesses do not require licenses or permits to operate, there are a handful that do as they are regulated by the approving authorities. Some of these are private schools, travel agencies, liquor distributors, moneylenders, banks, childcare centres, importers/exporters, wholesalers and retailers of liquors.
For more information on how to apply for licenses and permits for your business please email us or call our Business License Specialist at +(65) 6438 8887.
We have also included a series of articles on the setup of various types of businesses and where to obtain the necessary licenses and permits to operate.
For a quick guide to find out the approving authority for a specific business, please refer to our Referral Authority Chart below.
| Cases Requiring Referrals | Referral Authority |
|---|---|
| If company name or service is related to architectural services | Board of Architects (BOA) |
| If company name or activities are related to real estate. | Inland Revenue Authority of Singapore (IRAS) |
| If company name or activities are related to commodities futures trading, brokerage, clearing etc. | International Enterprise Singapore (IE Singapore) |
| If the proposed activities involve community services for the elderly, families, youths, disabled and children | Ministry of Community Development, Youth and Sports (MCYS) |
| If the proposed business name contains terms such as “Military” or “Defense”. | Ministry of Defense – Defense Technology and Resource Office |
| Organization rendering educational or training services of academic nature. Names of such establishments containing terms such as ‘college’, ‘national’, ‘Singapore’, ‘university’ etc. | Ministry of Education – Private Schools Section |
| If the proposed name contains the acronym ASEAN | Ministry of Foreign Affairs |
| If the proposed company is to be engaged in financial services and with name containing terms related to financial services such as ‘Bank’ ‘Futures Exchange’, ‘Clearing House’ and ‘Securities Exchange’ or other similar terms | Monetary Authority of Singapore (MAS) |
| If the name and activities contain or involve “Islam” and “Muslim” | Majlis Ugama Islam of Singapore (MUIS) |
| If the business activities are related to arms, explosive chemicals and ammunition | Singapore Police Force – Licensing Division |
| If the proposed name or tourism related activities involve the term “Merlion” | Singapore Tourism Board (STB) |
| If the proposed name or activities are related to law or legal services | The Law Society of Singapore |
Certain business activities require prior approval from the relevant authorities before registration with ACRA:
| Cases Requiring Referrals | Referral Authority |
|---|---|
| If the proposed name and activities contain accounting services | Institute of Certified Public Accountants of Singapore (ICPAS) |
| If the proposed name and activities contain the term “Co-op” or “Co-operative” | Registry of Co-operative Societies |
| If the proposed name and activities contain the terms ‘Medical’ or ‘Clinic’ | Ministry of Health (MOH) |
