Important Compliance Tips For Singapore Companies

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.

Conclusion

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.