Challenges of International Compliance in Singapore for Foreign Entrepreneurs

Many business owners may feel pressured by the international compliance challenges 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:

What are the Challenges of International Compliance in Singapore

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

1. Hiring a secretary
2. Having a local resident director
3. Getting an address
4. Appointing auditors
5. Registering for GST
6. Applying for business licenses
7. Keeping track of accounting records
8. Filing annual taxes

1. Hiring a Corporate Secretary in Singapore

After incorporating a company in Singapore, you must appoint a locally resident company secretary within 6 months. The secretary should be trained and experienced to handle company functions and compliance.

Responsibilities include:

• Administration of the company
• Informing directors and shareholders of statutory obligations, including annual return filings
• Maintaining and updating company registers and minutes
• Administering, attending, and preparing minutes for directors’ and shareholders’ meetings
• Updating on relevant changes in corporate regulations

2. Having a Local Resident Director

When establishing a company in Singapore, at least one director must be ‘ordinarily resident in Singapore’. The director can be a Singaporean citizen, Permanent Resident, or holder of an EntrePass or Employment Pass.

Requirements for a local director:

• At least 18 years old
• Singaporean citizen, Permanent Resident, or valid pass holder
• Of full legal capacity
• Not disqualified from directorship

Responsibilities include:

• Managing company affairs
• Setting the company’s strategic direction
• Ensuring accurate record keeping
• Preparing financial statements
• Complying with corporate filings and disclosures

3. Getting a Physical Office Address

Foreign companies setting up in Singapore must have a registered office address. This address must be open and accessible to the public during normal working hours.

As required by the Singapore Companies Act, the address must be included on all business correspondence and displayed outside the company’s place of business in Singapore, along with the company’s name and place of incorporation.

4. Appointing Auditors

Companies must appoint an auditor within three months of incorporation, unless exempt from audit requirements. To qualify for an audit exemption, a company must:

• Have individual shareholders
• Have fewer than 20 shareholders
• Have an annual turnover of less than $5 million

5. Registering for GST in Singapore

Goods & Services Tax (GST) applies to the selling price of goods and services provided by GST-registered businesses. GST registration is required if:

1. The company’s turnover exceeds $1 million in the past 12 months
2. The company’s turnover is expected to exceed $1 million in the next 12 months

You are not required to register for GST if:

• Your taxable turnover is primarily from zero-rated supplies and you apply for an exemption

6. Applying for Business Licenses

Depending on your business operations, you may need specific licenses. For sectors such as health or tobacco, obtain the necessary licenses from the relevant Singaporean authorities.

7. Keeping Track of Accounting Records

Companies must maintain accounting records for up to 7 years after transactions are completed. These records should include balance sheets and profit and loss accounts to accurately reflect sales and business transactions. Furthermore, companies can outsource such needs to accounting services in Singapore. This will automate the companies’ annual accounting and keeping clean records.

8. Filing Annual Taxes

Companies must file annual tax returns with the Revenue Authority and annual returns with the Company Registrar. Adhering to these compliance requirements is crucial for business growth and development.