Table of Content
- Compliance Tips For Singapore Companies
- Appoint a Qualified Resident Company Secretary
- Provide a Local Physical Address as the Registered Address
- Nominate a Resident Director
- Determine Audit Exemption
- Hold Annual General Meeting (AGM)
- Register for Goods and Services Tax (GST)
- Obtain Necessary Business Licenses
- Maintainance of Registers
- Keep Accurate Accounting Records
- Disclose Material and Personal Interests and Avoid Conflicts of Interest
- Timely Updates of Company Particulars
- Include Unique Entity Number (UEN) in Company Correspondence
- File Annual Returns and Tax Returns
- Appointment of Data Protection Officer (DPO)
- Compliance with Employment Regulations
- Determining Financial Year End (FYE)
In pursuit of achieving operational efficiencies and fostering a robust foundation of corporate governance, “compliance” is unequivocal.
Companies operating in Singapore are fortunate to be governed by compliance rules renowned for their simplicity, logical structure, and absence of unnecessary bureaucracy. This is particularly beneficial for small to mid-sized businesses seeking to navigate the regulatory landscape effectively.
Companies must recognise the importance of adhering to these seemingly straightforward regulations, as non-compliance can result in severe consequences, including fines and even prosecution.
Here is a snapshot of essential compliance tips that companies in Singapore must consider to uphold the highest standards of corporate governance and ensure long-term success in this dynamic business environment.
Compliance Tips For Singapore Companies
1. Appoint a Qualified Resident Company Secretary
Within six months of incorporating your Singapore company, it is mandatory to appoint a qualified resident company secretary. The company secretary is crucial in ensuring compliance with regulatory obligations and maintaining proper corporate governance.
2. Provide a Local Physical Address as the Registered Address
Your company must have a local physical address as its registered address. This address should be open and accessible to the public during normal office hours. It is essential for maintaining transparency and facilitating communication with stakeholders.
3. Nominate a Resident Director
Singapore companies must have at least one resident director. The director of a Singapore company must be a Singapore Citizen, Permanent Resident, or hold an EntrePass/Employment Pass. The director should meet specific eligibility criteria, including being at least 18 years old, not bankrupt, and free of malpractice charges.
4. Determine Audit Exemption
Singapore companies can qualify for audit exemption if they meet specific criteria. Suppose the company’s total annual revenue is at most S $ 10 million. In that case, total assets are worth S$10 million, and the company has at most 50 employees; it may be eligible for audit exemption. This can provide cost savings for smaller businesses.
5. Hold Annual General Meeting (AGM)
Except for exempt private companies, Annual General Meeting (AGM) is mandatory for Singapore companies, held within specific timeframes after the financial year-end. Public-listed companies must conduct their AGM within four months, while other companies have to conduct it within six months. Compliance with AGM requirements ensures corporate transparency and accountability.
6. Register for Goods and Services Tax (GST)
If your Singapore company’s projected or actual annual revenue exceeds S$1 million, you must register for GST. GST-registered companies must charge GST (currently 8%) on goods and services provided and remit this amount to the tax authorities. The GST rate is set to increase to 9% from 1st January 2024.
7. Obtain Necessary Business Licenses
Depending on your business activities, you may need to obtain one or more business licenses before commencing operations in Singapore. Business activities such as restaurants, educational institutes, travel agencies, financial services, and import/export-related industries may require specific licenses. It is crucial to research and obtain the necessary licenses to operate legally.
8. Maintainance of Registers
Singapore companies must maintain specific registers and records to enhance corporate governance and transparency. These include the Register of Directors, Chief Executive Officers, and Secretaries, which lists the individuals holding these positions. The Register of Substantial Shareholders tracks significant shareholders, while the Register of Controllers identifies individuals with substantial interest or control in the company. Additionally, the Register of Nominee Directors records details of directors acting on behalf of another entity.
9. Keep Accurate Accounting Records
Companies need to keep necessary accounting records that can sufficiently explain the transactions and financial position of the business. These records must be maintained for at least five years after completing related transactions. Adequate record-keeping ensures compliance with financial reporting requirements and facilitates audits, if necessary.
10. Disclose Material and Personal Interests and Avoid Conflicts of Interest
Company directors should disclose any personal interests related to company affairs. They should also provide necessary information to avoid perceived conflicts of interest. Transparent disclosure and proactive management of conflicts of interest are vital for good corporate governance practices.
11. Timely Updates of Company Particulars
Any changes in company particulars, such as registered addresses, directors, shareholders, or company officers, should be promptly updated with the Accounting and Corporate Regulatory Authority (ACRA). Failure to correct these particulars within the specified timeframe can result in penalties.
12. Include Unique Entity Number (UEN) in Company Correspondence
Your company’s Unique Entity Number (UEN) or company registration number should be prominently displayed on all official company correspondence. This helps in the identification and facilitates efficient communication with stakeholders.
13. File Annual Returns and Tax Returns
Companies in Singapore must file annual returns with ACRA and yearly tax returns with the Inland Revenue Authority of Singapore (IRAS). Adhering to these filing requirements ensures compliance with statutory obligations and avoids penalties. Annual corporate tax filing is required, with a deadline of 30 November for filing the Income Tax Return. Adhering to these requirements ensures the fulfilment of corporate tax responsibilities.
14. Appointment of Data Protection Officer (DPO)
As per the Personal Data Protection Act (PDPA), every company must designate at least one Data Protection Officer (DPO) to oversee compliance with the PDPA. The DPO plays a vital role in ensuring that the company adheres to data protection regulations and safeguards the privacy rights of individuals. By appointing a DPO, companies demonstrate their commitment to responsible data management and protection in line with the PDPA requirements.
15. Compliance with Employment Regulations
Singapore companies must abide by employment regulations. This includes adherence to the Employment Act regarding hiring, retaining, or laying off employees. Additionally, if the company has employees who are Singapore citizens or Permanent Residents, it must contribute to their Central Provident Fund (CPF) accounts at the prescribed CPF contribution rate. Compliance with employment regulations ensures fair treatment of employees and fulfilment of CPF obligations for the welfare of the workforce.
16. Determining Financial Year End (FYE)
When incorporating a company, selecting a financial year end is necessary, which marks the conclusion of the company’s annual accounting period. It is optional for this date to be fixed on 31 December each year. Companies should consider their business cycles and taxation periods when deciding on the financial year-end. Opting for a financial year-end aligned with completing major transactions can provide a more accurate assessment of the company’s yearly performance. Thoughtful consideration of these factors ensures effective reporting and evaluation of the company’s financial status.
We understand the critical role of compliance in ensuring the success and sustainability of companies in Singapore. We offer a range of services to assist your company in meeting its compliance obligations. From corporate tax planning and filing to AGM preparation and CPF contribution management, our team of experts is equipped to handle all compliance aspects.
We can also guide on maintaining accurate company registers and records, ensuring transparency and good corporate governance. With our in-depth knowledge of Singapore’s regulatory landscape and years of experience working with diverse businesses, we can tailor our services to meet your compliance needs. Let us take the burden of compliance off your shoulders so you can focus on growing your business confidently.
- Private companies in Singapore are responsible for filing their annual returns within seven months after the conclusion of the financial year. This timely filing is crucial for ensuring transparent disclosure to all stakeholders. It is important to note that all companies, including those inactive or dormant, must comply with the annual return filing requirement. Regardless of whether IRAS has exempted the company from filing income tax returns, if its status is “live,” the annual return must still be filed. Fulfilling this obligation contributes to maintaining compliance and upholding transparency in corporate reporting.
- Companies must abide by their constitution’s provisions regarding the requirement to hold an Annual General Meeting (AGM). If the constitution mandates an AGM annually, the company must follow it, regardless of AGM exemption criteria under the Companies Act. However, if the constitution includes the specified wording, no amendment is needed to utilize the AGM exemption provided by the Companies Act. Compliance with the constitution ensures adherence to the company’s internal governance framework.
- Yes, changing a company’s Financial Year End (FYE) for FYEs ending on or after 31 August 2018 is possible. However, certain conditions apply. The company must notify the Registrar of the change and can only change the FYE for the current or immediate previous financial year. The change cannot be made if statutory deadlines for AGM, filing of Annual Return (AR), or sending of financial statements have passed. Approval from the Registrar is required if the proposed change would result in a financial year longer than 18 months or if the FYE was previously changed on or after 31 August 2018 for a financial year ending on or after 31 August 2018, and it is within five years from the end of the previously changed FYE. Compliance with these conditions is essential when considering a change in FYE.
- If your company has a financial year period that is not 12 months, such as 52 weeks, you should notify ACRA (Accounting and Corporate Regulatory Authority) regarding this. By indicating it in the incorporation or change of FYE transaction form (applicable from 31 August 2018), you can inform ACRA that your company follows a 52-week financial year period. This allows you to avoid changing your FYE every year. Ensure you comply with the notification requirements provided by ACRA for financial year periods that deviate from the standard 12-month period.
- Private companies with financial years ending on or after 31 August 2018 can be exempted from holding Annual General Meetings (AGMs) if they send financial statements to their members within five months after the Financial Year End (FYE). Dormant relevant private companies are also exempted from holding AGMs. However, an AGM must be held if a member requests it before the six-month period after FYE. Additionally, a general meeting must be held if a member or auditor asks it to lay the financial statements within 14 days after they were sent. Compliance with these provisions ensures adherence to the AGM exemption under the Companies Act.
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