Singapore undoubtedly is the first choice for doing business. This is affirmed by the fact that Singapore was ranked 2nd on World Bank’s Ease of Doing Business report in 2017.
While the procedure of company incorporation in Singapore and doing business is easy, all companies are required to comply with statutory requirements laid down by the Accounting and Corporate Regulatory Authority (ACRA) as well as Inland Revenue Authority of Singapore (IRAS). Both authorities are in charge with the statutory compliance and tax matters of companies in Singapore respectively.
In this post, we’re discussing 7 important statutory compliance requirements for Singapore companies that are essential to follow in accordance with Singapore laws and policies.
By complying with these regulations, your company avoids not only penalties and legal consequences, but also unnecessary damages to your brand name.
1. Singapore registered office address
One of the statutory requirements for Singapore companies is to have a Singapore registered office address. This is submitted to the Accounting and Corporate Regulatory Authority (“ACRA”) during the incorporation process.
A registered office address in Singapore should fulfill the following criteria:
- It is open for at least five hours during ordinary business hours on each business day
- It should be a physical office address located in Singapore
- It cannot be a P.O. Box
Companies that do not have registered office address in Singapore can choose to take Singapore registered office address service.
In addition, given that all government bodies and entities will be sending their correspondence to the company’s registered office address, the company should ensure that the incoming mail sent to its registered office address (or registered office address service) is checked regularly.
2. Determining financial year end
A company’s fiscal year is the same as its financial year. While 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, in Singapore, companies have to determine what will be the date of their financial year end (FYE), where it also means the completion of an accounting period.
3. Holding Annual General Meeting
The Singapore Companies Act (Cap.50) states that every company is required to hold the Annual General Meeting (“AGM”) once in every calendar year or 15 months from the date of the last AGM, whichever is the earliest.
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, if applicable
- To declare dividends, if any
- To transact any other business
4. Filing of Annual Returns
As one of the statutory compliance requirements for Singapore companies, they must 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
- Principal 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
5. Appointment of auditors
One of the essential statutory compliance requirements in Singapore is that all Singapore incorporated companies must appoint an auditor within three months of the date of incorporation- unless it is exempted from audit requirements.
A private limited company, in order to qualify for the audit exemption, must satisfy at least two of the three conditions for each of the two preceding financial years:
- Total annual revenue for the financial year of not more than $10 million;
- Total assets for the financial year of not more than $10 million;
- The number of employees for the financial year, not more than 50.
For a company which is part of a group, the group to which it belongs would have to qualify as a small group and fulfill the thresholds on a consolidated basis. This means that the entire group must satisfy at least two of the three criteria on a consolidated basis in each of the two preceding years. A ‘group’ also includes the ultimate holding company and that would include a group where the ultimate holding company is a foreign company.
The above audit exemption is in effect for Company’s financial years commencing on or after 1 July 2015.
Read more about audit exemption.
If your Singapore company is not exempted from audit, your company accounts must be audited by a Certified Public Accountant of Singapore.
6. Disclosure of the Company’s Registration Number
Since 1 January 2009, all entities that are registered in Singapore have been issued a Unique Entity Number (UEN) as its identification number.
According to Singapore companies act, one statutory compliance requirement in Singapore is that every company must have the registration number in addition to its registered name on all business letters, statements of account, invoices, official notices, and publications.
The UEN is used as a single identification number for interaction with the Government, such as filing of corporate tax returns, applying for permits or submitting their employees’ CPF contributions. UEN replaces all other identification numbers issued to them by different government agencies. Existing companies will retain their ACRA Registration Number as their UEN.
7. Business Licenses and Permits
A business license is a permit issued by a Singapore government agency that allows you to conduct a specific type of business. While not all businesses in Singapore require business license, depending on the type of business your company does, obtaining business license in Singapore may be mandatory before you can start doing business in Singapore.
In order to fulfill this statutory compliance requirement in Singapore, a company registered with ACRA can apply for a business license in Singapore.
While the above list is not exhaustive, these are no doubt some of the essential statutory compliance requirements that all Singapore companies must follow in order to act in accordance with Singapore business laws and policies. Not complying with these requirements may result in serious legal consequences, including suspension of company operations.
At Precursor, our expertise is to provide in-depth consultancy on compliance requirements that your company needs to fulfill. No matter what stage your company is, experts at Precursor can do a deep analysis of conformity status of your company and advise if there are any critical items you are required to address in order to stay compliant. With years of hands-on expertise and the track record of serving some of the top multinationals, you can rest assured of high-quality services, friendly communication and corporate advisory provided by us.
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