Singapore Company Compliance Standards
Here you will get the required information regarding the basic statutory requirements that a Singapore Private Limited Company must meet.
MAINTAINING COMPLIANCE IN SINGAPORE
A Singapore Private Limited Company is required to maintain compliance with the Singapore Company law. Any active or dormant Singapore company is required to perform timely filings.
The moment a Singapore company is incorporated, it has to comply with all the requirements of the Singapore Companies Act and make annual filings to the ACRA and the IRAS. Complying with the statutory requirements helps a company to avoid late penalties, composition fines or court prosecution.
FINANCIAL YEAR END
Every Singapore Company must plan its Financial Year End (FYE) that represents the completion of its accounting period. It is not essential that the FYE of a Company matches with the regular annual calendar. It could fall on any day of the year.
The fiscal year of a Company is taken as the financial year. It is up to the Company to decide its FYE, and most Singapore Companies assign 31st December, 31st March, 30th June or 30th September as the ending date of their fiscal year.
It is in the best interests of a Singapore Company to fix their FYE within 365 days. This helps the Company to take advantage of the Zero Tax Exemption offered for new startups. The Singapore Law offers an exemption to new start-ups for their first SGD $100,000 regular chargeable income for the first three years of assessments.
A Singapore Company must have an auditor appointed within three months of its incorporation. However, this requirement is not essential for Companies exempted under audit requirements. The following conditions help a Company get exemption from audit requirements:
- There is no corporate shareholder in the Company
- The overall number of shareholders is below 20
- The Company has an annual turnover of less than SGD 5 million.
DISCLOSING COMPANY REGISTRATION NUMBER
The Singapore Companies Act makes it mandatory for every Company to print their Unique Entity Number (UEN) on all their official print materials including invoices, business letters, statement of accounts, official notices and publications among others.
NOTIFICATIONS OF CHANGES
A Singapore Company has to notify the Registrar about any changes with regard to its share capital, shareholders or officers in a specific time period laid down by the ACRA. Penalties are imposed if the Company fails to comply with this requirement.
BUSINESS LICENSING AND PERMITS
Certain business activities in Singapore are required to be regulated under the Government Law. A registered business cannot commence operations unless it has received the licence or approval from the respective Government department(s).
Registered Office and Working Hours
Every Singapore Company is required to have a registered office in Singapore to which all communication and notices may be addressed and which shall be open and accessible to the public for at least 3 hours a day during regular business hours on weekdays.
Central Registration Number
A Singapore company that has business activities involving import/export/Transshipment within or outside Singapore, it is necessary to have a Central Registration (CR) number from the Singapore Customs.
Registration of Goods and Services Tax
A company that imports goods or services into Singapore will have to pay Goods and Services Tax or GST. Any goods and services provided/exported from Singapore are exempted from this tax. The current rate of GST stands at 7 percent.
Every Singapore Company with an annual taxable income of over SGD 1 million needs to register for GST. A company that currently produces taxable goods or services and expects its annual taxable income to be above SGD 1 million should also register for GST. It is important that a company registers for GST within 30 days of becoming eligible for this tax.
It is also possible to register voluntarily for the GST. However, voluntary GST registration is approved under the judgment of the IRAS Comptroller. After approval, it is mandatory to maintain the registration for a minimum of 2 years.
Registering for Singapore Central Provident Fund and SDF
The Central Provident Fund (CPF) is a mandatory pension fund scheme where the employee and the employer contribute a certain percentage of the salary to the fund. The scheme makes it essential for the employer to contribute to the CPF for all the local employees such as Singapore permanent residents and citizens who earn over SGD 50 per month. The highest contribution rate for the employer is 16% and for the employee is 20%, and it could be lower based on factors like the age and permanent resident status of the employee.
Employment Pass and Work Pass holders are exempted from this scheme, but the employer must make a contribution to the Skill Development Fund or SDF for all the employees. This contribution is mandatory by the employer for each employee up to their first SGD 4,500 gross monthly income. This contribution is .25% or SGD 2, depending on which is higher.