All are not over yet! Even after choosing the company name and completing the registration process and paying your fees, you are still left with a bunch of compliance requirements stipulated by Accounting and Corporate Regulatory Authority (ACRA) and Inland Revenue Authority of Singapore (IRAS), and also some other compliances to be religiously met on an ongoing basis.
Statutory requirements and companies act are primarily aimed for ensuring good governance of the company’s business and monitoring business health periodically both by the company owner and Singapore regulatory authorities for continued growth and sustainability of an organization.
Failure in complying with the requirements generally attracts hefty fines and other penalties. The compliance requirements encompass many business perspectives and range from reporting of Balance Sheet, Financial Statements to maintaining Beneficial Owners’ Registers.
The statutory compliance requirements applicable to your newly registered company in Singapore are mentioned below.
Now that you have done with your new Singapore company registration and also opted for the financial year-end, it is time to finally confirm the same or else notify both ACRA and IRAS about any changes that you would like to make.
It is mandatory for all Singapore registered companies to file annual business reports with ACRA and IRAS, based on your Financial Year End (FYE), the timeline for submitting newly registered company’s annual business performance to the authorities.
The fiscal or financial year-end commonly determined by Singapore companies is either 31st December or 31st March however, you may also choose 30th June or 30th September as your financial year-end.
Unless otherwise approved by the Registrar, the FYE for a company shall not exceed 18 months in the year of its incorporation. However, it is recommended that you choose to keep your FYE within 365 days for enjoying tax exemptions for the initial three years of assessment.
Final confirmation on FYE is stipulated to prevent companies from changing their FYE on a later date and as a safeguard.
All companies incorporated in Singapore must appoint an auditor within 3 months of the date of incorporation unless they are exempt from auditing requirements.
Exemptions apply to small private companies. A company will be considered a small business if it is a private corporation in that fiscal year and it meets at least 2 of the following 3 criteria in the last 2 consecutive fiscal years
- Its total annual revenues do not exceed SGD10 million;
- Its total assets do not exceed SGD10 million;
- The number of employees does not exceed 50.
If your company is a part of a group, it is eligible for the audit exemption when
- The entity qualifies as a small company;
- The whole group must be a “small group”.
Singapore company law requires that every company must have the company registration number, known as the Unique Entity Number (UEN), on all business letters, bank statements, invoices, official notices, publications, etc.
The Company Secretary needs to be a natural person and must reside in Singapore. The Singapore Companies Act requires companies to appoint a Company Secretary within six months of company formation.
New start-ups and SMEs usually engage a CSP services firm in Singapore for company secretarial services. You can derive many benefits by engaging a company secretary services Singapore.
Though as a Singapore Private limited company; you have one minimum resident director who is a resident of Singapore e.g. a Singaporean citizen or a permanent resident of Singapore or a person holding an Employment Pass / EntrePass, the resident director can not function as your company secretary.
Besides being a natural person, the company secretary must be a qualified person under the Legal Profession Act, public accountant registered or deemed to be registered under the Accountants Act, a member of the Singapore Association of the Institute of Chartered Secretaries and Administrators, a member of the Institute of Singapore Chartered Accountants (formerly known as the Institute of Certified Public Accountants of Singapore), a member of the Association of International Accountants (Singapore Branch), a member of The Institute of Company Accountants, Singapore a secretary of a company for at least 3 of the 5 years immediately preceding the above mentioned date of my appointment as secretary of the above named company.
In the event of the resignation of your company secretary, you must fill the vacancy within six months.
The Singapore Companies Act requires every company to maintain certain registers. These statutory registers are a part of the company’s informative records and are usually updated and maintained as official books together with the Constitution of the Company, Share Certificates, Common Seal, all Minuted Resolutions, etc.
The following information is mandatory to be maintained in the statutory registers
- Updated information about company members including your directors, auditors and secretaries in the form of Electronic Register of Members (EROM) and must contain the date of appointments and resignations, as appropriate.
- Shareholding and share transfers information. https://www.acra.gov.sg/docs/default-source/default-document-library/legislation/companies-act-reform/companies-(amendment)-act-2014/NoticeToUpdatePaidUpShareCapital.pdf,.
- Information about any loan secured by the company.
- Beneficial ownership information in the form of a Register of Registrable Controllers (RORC), and to make the information available to public agencies upon request.
Appointed company secretary needs to be assigned the duty for creating, updating and maintaining the company’s statutory registers.
All Singapore companies require to prepare and present financial statements in strict compliance with the Singapore Financial Reporting Standards (SFRS), which has converged to the International Financial Reporting Standards (IFRS).
This is a measure taken by the Accounting Standards Council (ASC) to reinforce Singapore’s status as an international financial centre and to remain informed of your company’s financial health and profitability, and tax liabilities.
You can use Zoho Books as an online accounting software with complete accounts payable and accounts receivable functionality for managing your finances and automating business workflows and complying with all applicable SFRS requirements.
Certain business activities in Singapore are subject to regulation by government agencies. Even if your company is registered, you cannot establish your company if you do not have the necessary permits and/or licenses from the relevant government authorities. For instance, if you are in an Import Export Business you need to be registered with Singapore customs for obtaining CR, Central Registration number license.
For verifying a company and applicable business licenses and permits you can visit a Singapore Government Agency Website.
Obtaining necessary permits may not be that easy and straightforward sometimes and usually, it is a good idea to engage a professional corporate service provider to ensure that you are on the right track during your Singapore company incorporation.
The Central Provident Fund (CPF) Singapore is a statutory pension scheme where employers and employees pay a percentage of their monthly salary in the fund.
Employer contributions to the CPF are mandatory for all local employees who are either Singaporeans or permanently resident and earn more than SGD 50 per month.
The maximum contribution rate to the CPF for the employer and employee is 17 per cent and 20 per cent respectively and may be lower depending on certain factors such as the age of the employee, permanent residence status, etc.
Employment Pass holders do not need to contribute to the CPF.
Your newly registered company) is also mandated to contribute to the Skills Development Fund (SDF). Employers must pay a contribution to the SDF of 0.25% for all employees up to the first USD 4,500 of gross monthly salary.
ECI as defined by the IRAS is the valuation of your company’s taxable income for the financial year. The ECI statement shall include the income of the company, excluding items such as capital gains from the sale of fixed assets.
A business entity needs to submit an estimate of its taxable income (TCI) within 3 months of the end of the tax assessment year. Even if the corporation estimates its taxable income to be zero, it must still file ECI “NIL” return.
IRAS provides an option for flexible payment to companies that submit their ECI declarations in advance enabling them to pay taxes in instalments. The earlier you file your ECI return, the greater the number of instalments allowed for you.
After the 3 months waiting period, if your company doesn’t comply with this requirement, IRAS will issue a Notice of Assessment (NOA) based on its estimate of the revenues of your company. Your company then will have one month from the date of issuance of NOA to file its written objection if it does not agree with the estimated IRAS assessment. If your company does not agree, NOA will accept the valuation as final, despite the differences in the revenue information provided in both the Form C and the subsequently submitted statements.
Though an AGM must be held physically and anywhere in the world, the Covid 19 pandemic mandates no necessity for a physical meeting to organise an AGM.
So long there is a means to exchange your documents e.g. electronically, it shall be adequate.
The following matters are to be discussed at an AGM:
- Approval of the report/audit report of the directors
- The company’s Profit and Loss and cash flow statements and details of sales, expenses and profit
- Balance Sheet detailing the assets, liabilities and equity
- Approval of the fees, remuneration and emoluments of the directors
- Re-elect the director(s) as appropriate
- The renewal of the term of office of the statutory auditors
- Explain any dividend announced and any changes in equity
- Any other business transactions
ACRA, the Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) have updated the checklist to guide issuers and non-listed entities on the conduct of general meetings arising from the latest updates from the Multi-Ministry Taskforce to ease safe management measures to facilitate business operations.
Following links can provide more information
The deadline for filing the tax return is 30 November. The documents need to be submitted are the audited or unaudited report and the tax calculation (Form C).
To simplify the declaration process for small companies, IRAS has introduced the C-S form, a simple and shortened three-page tax return form for small businesses that are entitled to declare their income to IRAS.
From the 2017 tax year, companies can submit the C-S Form if they meet all of the following conditions:
- The company must be registered in Singapore.
- The company must have an annual income not exceeding SGD 5 million.
- The company only has income taxable at the applicable corporate income tax rate of 17%.
The company is not claiming any of the following in the Year of Assessment:
1. Deferment of shares/loss of capital from the current year
2. Group Relief
3. Investment grant
4. Foreign Tax Credit and Tax Deducted at Source
You need to prepare the following documents for form C-S
- Financial statements
- A declaration statement
- Tax computation and supporting documents
- Any other claim forms e.g. R&D expenses, M&A expenditures, Double Tax deductions etc.
Under the Singapore Companies Act, all locally registered companies are required to file their annual returns.
Information required to be submitted for filing annual returns are
- Company Name and registration number
- Registered address
- Main activities
- Type of company during the year
- Summary of share capital and shares with changes in share structure, if any
- Recorded expenditure
- Information about company managers
- Information about shareholders
- Dates of the annual reports, the General Meeting and the annual accounts
- Company's financial statements in XBRL format when applicable
The AR should be filed no later than 7 months after FYE confirmation and after the AGM.
Penalties for failure in submitting AR are heavy and can be SGD 300 for every breach and can even be SGD 600 on the repetition of failures.
Your company would need to file its financial statements in XBRL format during the filing of the annual return if your company:
- Becomes Insolvent with liabilities exceeding assets.
- It has at least one shareholder in the company for the year and is not dormant.
All companies must keep proper accounting records for minimum years.
A lot of tasks need to be performed once you register your new company in Singapore for the first time. Besides the 12 compliance requirements mentioned, there would be other requirements to comply with too e.g. GST Registration, Company Seal, Registered office hours etc. and engaging a one-stop professional corporate service provider is strongly recommended.