• Challenges of International Compliance

Many business owners may feel pressurised when moving their operations to another country. All the regulations, laws, and compliance issues, such as accounting, need to be met in order to move the business entirely to the new country. This is where most businesses face trouble – international compliance.

Compared to other countries, Singapore has a great ease of doing business rating, thanks to the flexible government regulations. What some may see as challenging compliance issues here, some might see as the easiest and the most convenient.

Here are some compliance requirements that all businesses need to adhere to if they plan to expand their operations to Singapore:

FUN FACT: Singapore ranks 2nd out of 190 countries in the World Bank’s ‘Ease of Doing Business’ list

What are the Challenges of International Compliance

Some of the challenges commonly faced when dealing with international compliance in Singapore are:

  • Hiring a secretary
  • Having a local resident director
  • Getting an address
  • Appointing auditors
  • Registering for GST
  • Applying for business licenses
  • Keeping track of accounting records
  • Filing annual taxes

Hiring a Secretary

After incorporating a company in Singapore, you must hire a locally resident company secretary within 6 months from the date of incorporation.

A company secretary must be appointed within 6 months from the date of incorporation. The company secretary must be trained and qualified to handle all the functions, and must have enough local business experience to help the business comply with other requirements.

They are responsible for:

  • Administration of the company
  • Ensuring that all the directors and shareholders are informed of their statutory obligations such as the filing of annual returns
  • Maintain and update the company’s registers and minutes books
  • Administer, attend and prepare minutes of meetings of directors and shareholders
  • Update directors and shareholders on relevant changes in corporate regulations

Having a Local Resident Director

A foreign corporation setting foot in Singapore can have any number of directors. However, at least one director should be one who is ‘ordinarily resident in Singapore’.

The requirements for a local company director are:

  • At least 18 years old
  • Singaporean citizen, Permanent Resident, Entrepass or Employment Pass holder
  • Of full legal capacity
  • Not disqualified from acting as a director of a company

They are responsible for:

  • Managing the affairs of the company
  • Setting the company’s strategic director
  • Ensuring accurate and timely record keeping
  • Preparing Financial statements
  • Complying with corporate filings and other disclosures

Getting an Address

Foreign companies planning to set up operations in Singapore must have a registered office, which should be open and accessible to public in normal working hours.

This is required according to Singapore Companies Act and must mention its name and the place of incorporation on all its business correspondence ad also outside its place of business in Singapore

Angela - Chief Marketing Officer
TIP: You can opt for a virtual office in Singapore if you don’t require a physical office.

Appointing Auditors

Each company should appoint an auditor within three months from the date of incorporation, unless it is exempted from audit specifications. In order to exempt audit requirements, a company should:

  • Have individual shareholders
  • Have less than 20 shareholders
  • Have less than a $5 million annual turnover

Registering for GST

General Sales Tax (GST) is an indirect tax applied to selling price of services and goods, provided by GST-registered business entities. GST registration is required if:

  • The company’s turnover is more than $1 million for the past 12 months
  • The company’s turnover will exceed $1 million during the next 12 months

You would not be required to register for GST if:

  • Your taxable turnover is derived wholly or mainly from zero-related and you apply for exemption from registration

Applying for Business Licenses

Depending upon the nature of your operations, your company may or may not require a business license. If you are planning to enter the health sector, or tobacco industry, you might require securing a license from the respective Singaporean authority.

Keeping Track of Accounting Records

Each company should be able to maintain accounting records for up to 7 years after the completion of transactions. These accounting records should include balance sheets, and profit and loss accounts to represent sales and other business transactions adequately.

Angela - Chief Marketing Officer
RECOMMENDATION: It is recommended for companies to outsource accounting functions so they can focus on growing their business.

Filing Annual Taxes

Every company must file annual tax returns with the Revenue Authority and annual returns with the Company registrar. You will need to come up to these compliance standards to make sure that you grow and develop as a business.

Ready to set up your company in Singapore or looking for any corporate services from corporate secretary, taxation, or accounting? Contact us for a free consultation today.

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FAQs

Is there any assistance that Singapore provides to start ups?2021-09-21T13:34:01+08:00

In Singapore, there is a tax incentive of 75% tax exemption on the first $100,000 and 50% exemption on the next $100,000 in profit for the first 3 years from Year of Assessment 2020 onwards.

Is it compulsory to register my company for GST?2021-09-21T13:33:37+08:00

No not necessarily, unless your turnover in the last 12 months (or in the next 12 months) will exceed $1 Million. If desired, you can voluntarily register for GST at any time.

Must I be in Singapore to operate the business?2021-09-21T13:32:52+08:00

Foreigners are free to form companies in Singapore and are not required to relocate to do so as they can operate their company from overseas.

Can a foreigner incorporate a company in Singapore and own 100% of the equity of the company?2021-09-21T13:32:03+08:00

Yes. Shareholders can be a local or foreign, individual, or corporate entity. These shareholders can own 100% of the equity of the Singapore company.

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