Compliance requirements don’t end after you have completed registering your company in Singapore. There is still a lot more to be done, and this is just the beginning of a complex journey.
You still have to meet several compliance obligations set forth by the Accounting and Corporate Regulatory Authority (ACRA) as well as the Inland Revenue Authority of Singapore (IRAS).
Additionally, some other compliance requirements must be strictly adhered to on an ongoing basis, long after you have selected the company name, completed the registration process, and paid your fees.
To help ensure the development and sustainability of businesses, statutory requirements and the Companies Act in Singapore are primarily focused on maintaining strong governance of company operations and conducting routine business health checks with the business owners.
In general, breaking the rules can result in huge fines and other punishments. The standards for compliance cover many aspects of the company, from producing balance sheets and financial statements to keeping beneficiary owners’ registers.
Compliance Requirements After Company Incorporation in Singapore
The following lists the legislative compliance requirements that apply to your newly established company in Singapore.
Final Verification of Your Company’s FYE (Financial Year End)
It’s time to finalise your new Singapore business registration now that you’ve finished it and chosen the financial year end (FYE), or else you should let ACRA and IRAS know if there are any modifications you’d want to make.
Based on the FYE, which determines the deadline for reporting a newly registered company’s yearly company performance to the authorities, it is required for all Singapore registered firms to submit annual business reports to ACRA and IRAS.
The typical annual or financial year-end for Singaporean businesses is either the 31st of December or the 31st of March, but you can also pick the 30th of June or the 30th of September as the financial year-end.
How Do I Choose FYE?
A company’s first FYE cannot be more than 18 months from the year of its establishment unless the Registrar has given special permission. However, keeping your FYE inside 365 days will allow you to benefit from tax exclusions for the first three years of assessment.
Final confirmation of FYE is required as a precaution against enterprises modifying their FYE at a later time.
Selection of Auditors
All Singaporean corporations must appoint an auditor within three months after the date of establishment unless they are exempted.
Is Your Business Excluded?
Small private businesses are exempt. However, if a firm is still a private company within that financial year and has met at least two of the following three requirements in the previous two fiscal years, it will be regarded as a small business:
- Its yearly gross sales are less than SGD10 million.
- There are no assets worth more than SGD10 million.
- There are no more than 50 employees.
Your business qualifies for audit exclusion if it’s a member of a group when:
- The organisation is a small business.
- It is part of a “small group”.
The Publication of the Company’s Registration Number
According to Singaporean company legislation, all business correspondence, including letters, bank statements, invoices, official notices, and publications, must include a Unique Entity Number (UEN), which is the firm’s registration number.
Choosing a Company Secretary
The company secretary is required to be a Singaporean citizen and a natural person. According to the Singapore Companies Act, companies must appoint a company secretary within the first six months of their inception.
Fresh start-ups, as well as SMEs, typically use a corporate secretarial services provider in Singapore. However, by making use of a local business secretarial service, you can gain a lot of advantages.
How Should a Corporate Secretary Be Chosen?
Even though you must have at least one resident director for a Singapore private limited company who is a Singaporean citizen, a permanent resident of Singapore, or a foreigner with an Employment Pass or EntrePass, your resident director cannot also serve as your Company Secretary.
In addition to being a natural person, the company secretary must also meet the requirements:
- The Legal Profession Act,
- Be a public accountant registered or presumed to be registered under the Accountants Act, and
- Be a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators, the Institute of Singapore Chartered Accountants (previously known as the Institute of Certified Public Accountants of Singapore), or the Association of Inter-Professional Accountants.
If your company secretary were to leave, you would have six months to find a replacement.
Keeping Your Company’s Statutory Registers Up to Date
According to the Singapore Companies Act, every firm must keep certain registers. These official books, which also include the company’s constitution, certificates of shares, common seal, every minuted decision, etc., are typically updated and preserved as part of the company’s instructive records.
The following details must be kept up to date in the statutory registers:
- A current Electronic Register of Members (EROM) must include the dates of appointments and resignations of all company members, including your directors, auditors, and secretaries.
- Information about share ownership and transactions.
- Information about any loans that the corporation has obtained.
- The Register of Registrable Controllers (RORC) details beneficial ownership and makes the data available to governmental authorities upon request.
The responsibility for developing, updating, and maintaining the company’s statutory registers must be delegated to the appointed company secretary.
Audited and Unaudited Financial Reporting
The Singapore Financial Reporting Standards (SFRS), which have now been consolidated with the International Financial Reporting Standards, must be strictly followed by all Singaporean corporations when compiling and presenting financial statements.
This is a move made by the Accounting Standards Council (ASC) to uphold Singapore’s reputation as a global financial hub and to help keep you informed about the financial stability, profitability, and tax obligations of your own business.
Getting Licenses and Permits for Your Business
Governmental organisations in Singapore have the authority to regulate specific commercial activities. Therefore, even if your business is registered, you cannot begin operations if you lack the required permits and/or licenses from the appropriate government agencies.
For instance, to receive a CR, Central Registration number license for an import-export business, you must be registered with Singapore Customs.
You may check for a company’s information and any necessary business licenses and permissions by going to the relevant government department’s website.
To guarantee that you are on the right road during the registration of your Singapore business, it is typically a good idea to contact a professional corporate service provider. Obtaining essential licenses may not always be simple and uncomplicated.
Application for Membership in the Singapore Central Provident Fund (CPF) and Skills Development Fund (SDF)
It is required that both employers and workers contribute a portion of monthly salaries to the Central Provident Fund (CPF) in Singapore.
All local workers who are either Singaporeans or permanent residents who make anything beyond SGD50 per month are required to make employee payments to the CPF.
The maximum CPF contribution rate for an employer and employee is 17% and 20%, respectively. However, it may be less based on the employee’s age or status as a permanent resident, for example.
Holders of an Employment Pass are exempt from CPF contributions.
Additionally, your newly registered business is required to contribute to the Skills Development Fund (SDF). Employers are required to contribute 0.25 per cent of each employee’s first USD4,500 in gross monthly compensation to the SDF.
Estimated Taxable Income (ECI) Reporting to IRAS
According to the IRAS, ECI is the estimated taxable income for your company’s fiscal year. The company’s revenue and other factors like capital gains from the sale of fixed assets must be included in the ECI statement.
Who Must Submit the ECI?
A business entity is required to provide an estimate of its taxable income (TCI) within three months after the conclusion of the tax assessment year.
The corporation must nevertheless submit an ECI “NIL” return, even if it anticipates having no taxable revenue.
What Advantage Does Filing an ECI Provide?
Companies who submit their ECI disclosures in advance have the option of flexible payment through IRAS, allowing them to pay taxes in instalments. The earlier you file your ECI returns, the more instalments you can be granted.
What Occurs When You Don’t File Your ECI As Required?
If your firm doesn’t conform to this obligation after the three-month waiting period, IRAS may serve a Notice of Assessment (NOA) depending on its estimation of your company’s revenues.
If your firm disagrees with the estimated IRAS assessment, it will then have one month from the day the NOA was issued to file a written protest.
Despite the discrepancies in the revenue numbers supplied in both Form C and the later-filed statements, NOA will consider the value as final if your firm declines to submit any appeal.
Organising the Inaugural Annual General Meeting (AGM)
Due to the COVID-19 pandemic, a physical conference is no longer a requirement for an AGM, as long as there is a way for you to share your papers, such as electronically.
The following topics should be covered at an AGM:
- Approval of the directors’ report/audit report.
- Statements of the company’s profit and loss, cash flow, and information on sales, costs, and profit.
- Statement of financial position listing assets, liabilities, and equity.
- Approval of the directors’ fees, compensation, and employment.
- Re-election of directors as necessary.
- Extension of the statutory auditors’ tenure in office.
- Reporting of any dividends declared and any equity changes.
- Any other business deals.
Refer to our article on AGMs in Singapore to know about them in more detail.
Updated Meeting Procedures in Light of the Changing COVID-19 Situation
As a result of the most recent updates from the Multi-Ministry Taskforce to reduce safe management policies to support business operations, ACRA, the Monetary Authority of Singapore (MAS), as well as Singapore Exchange Regulation (SGX RegCo) have together revised their checklist to help issuers as well as non-listed companies on the conduct of general meetings.
Filing an Annual Tax Return With IRAS
The tax return must be submitted by 30 November of each year. The audited or unaudited report and the tax computation are the required documents (Form C or C-S).
The Form C-S: Simplified Tax Declaration
The C-S form, a straightforward and condensed three-page tax return form for small firms that are allowed to declare their revenue to IRAS, was created by IRAS to streamline the declaration procedure for small enterprises.
Companies can file the C-S Form beginning with the 2017 tax year if they satisfy all of the requirements below:
- The company’s registered address must be in Singapore.
- The business must earn no more than SGD5 million per year.
- Only the revenue that is subject to the appropriate corporate income tax rate of 17 per cent belongs to the corporation.
- The business is not claiming the following in the year of assessment:
- Postponement of shares and capital losses from the current year.
- Group Solace.
- Grant for investment.
- Foreign Tax Credit and Source Tax Deducted.
What Is Required to Prepare for Form C-S?
The following documents must be drawn up for Form CS submission:
- Financial records.
- An affirmative statement.
- Calculation of taxes and related documentation.
- Any additional claim forms, such as those for R&D costs, M&A costs, double tax deductions, etc.
Annual Return (AR) Filing With ACRA
All locally registered businesses are obliged to file their annual returns in accordance with the Singapore Companies Act.
The details that must be provided while filing yearly returns are:
- Name and registration number of the business.
- Official address.
- Principal pursuits.
- Kind of business conducted during the year.
- A list of the shares and share capital, including any modifications to the share structure.
- Registered expense.
- Information about corporate executives.
- Details regarding stockholders.
- Dates for the general meeting, the annual accounts, and the annual reports.
- Financial statements of the company in XBRL format, if relevant.
When Should You File an AR?
The AR must be submitted no later than seven months following the AGM and confirmation of the FYE.
Penalties for failing to submit an AR are severe and can range from SGD300 for a single violation to SGD600 for multiple offences.
To file the annual return, your business must submit its financial statements in XBRL format if:
- Its debts are greater than its assets, which means it has become insolvent.
- It is not inactive and has at least one shareholder for the whole year.
Every business must maintain accurate accounting records for a minimum of two years.
Introducing the Company Seal
A corporate seal may be used to sign and seal official documents.
These metallic, ink-free seals, sometimes referred to as “common seals,” are embossed with the firm’s name and registration number and should be used on official papers, including share certificates and loan documents.
The Board must provide its permission each time the seal is used, and it must be kept under the watch of the company secretary.
Usually, either two directors or one director and the company secretary must countersign any documents bearing the seal.
The GST (Goods and Services Tax)
The Goods and Services Tax (GST) is the same as the VAT in other countries. The current GST in Singapore is 7 per cent.
It is required for businesses with annual sales of SGD1 million or more to register for GST and submit quarterly GST returns. Only those who have registered for GST are eligible to charge for GST.
Depending on the kind of economic activity, a firm may also elect to register for GST voluntarily. However, there are restrictions placed on choosing to register for GST voluntarily.
One of the crucial things to undertake before you start operations is to understand Singapore’s GST and if you need to register your firm for GST.
Once you register your new business in Singapore, you must complete several duties, in addition to the 14 compliance criteria listed.
It is strongly advised that you work with a professional corporate service provider to help take you through the complexities involved.