“Know-Your-Customer,” says ACRA to Singapore Incorporation Service Providers
Since 2009, Singapore is steadily improving its regulatory framework to bring more accountability to the Singapore companies. ACRA (Accounting and Corporate Regulatory Authority), took it a little further by implanting changes in it, in July 2015.
The express purpose of the new changes is to keep Singaporean rules and regulations in stride with the developments at the global scene. They are focused on lessening the disadvantages felt by the entities in other global jurisdiction and at the same time, providing ample protection to the shareholders of Singapore companies and its taxpayers.
Doing Business in Singapore
Of course, lower tax rates, least amount of corruption, great educational system, excellent infrastructure, and communication links with the outside world, and its geographical location are few of the important factors of the Singapore rise as the financial hub of Asia. In addition to the honest and hardworking business owners, it also attracts undesirable elements like money launderers. The changes implemented in July 2015 are aimed at curtailing such activities that can finance terrorism.
Enhanced Regulatory Framework for the Singapore Company Incorporation
One of the USP of Singapore company incorporation process is that it is simple and fast. Each year, service companies assist in the registration of literally thousands of Singapore companies. In the past, some of these entities were used to launder money. In a bid to put a stop to the money laundering activities, ACRA has made it mandatory for the service companies to obtain KYC (Know-Your-Customer) from the aspiring entrepreneurs. The move has enabled the banks, financial institutions, and other corporate service providers from being party to such activities.
Following are the components of KYC certificate.
- Full Name, Identification Proof (such as NRIC or Passport copy) and Nationality of each of the Directors, shareholders, and the Ultimate Beneficial Owners of the company;
- A resolution by the company’s board of directors;
- Copy of Company’s certificate of incorporation;
- Copy of the company’s business profile; and
- Copy of the company’s M&AA
The Monetary Authority of Singapore and ACRA insist that the corporate services provider diligently ensure the identity of their customer and then only, proceed with the registration of their companies. The providers are also advised to be alert and check that:
- Contacting their existing clients is easy and hassle-free
- Whether existing or the new clients are Politically Exposed Persons (“PEP”)
- If the client is too secretive and is avoiding a face-to-face meeting
- If client has issued unusual instructions regarding cash or loans; or
- If the company structures is overly complex or unusual
- If the client is accepting losses though unusual transactions; and
- If the money going in and out of the company’s accounts
Yes, the new compliance measures are going to make life a little bit difficult for the entrepreneurs interested in Singapore business incorporation. It is important to note that, a number of countries are also taking similar steps to prevent money laundering and financing of terrorist activities.
Double Taxation Agreements
Singapore has signed more than 80 DTAs (Double Taxation Agreements) with its trading partners. The DTAs have simplified cross-border economic activities between Singapore and other countries to a great extent. These agreements have contributed to the island nation’s attractiveness as the investment destination for the global investors.
Singapore is well-known for the ease of doing business. It is ranked as the second in the list of the most competitive economies that is prepared by the World Economic Forum. This island nation is going to keep on attracting the investors and entrepreneur.