Compliance for Singapore Companies
The article given below provides an overview of the statutory compliance needs that apply to all the Singapore private limited companies. In order to ensure proper working of your company all the compliance criteria need to be fulfilled.
Every Singapore company must appoint a qualified, certified and a duly licensed company secretary. The said company secretary must have the needed knowledge, and the caliber to precisely perform all the functions of a company secretary. This position holds a very important place in the operations of a company, because a company secretary handles almost all legal nuances of a company.
Singapore Resident Director
There is no limit to the number of directors, a Singapore company can hold. However, there should be at least one local resident director, who is Singapore Citizen, Singapore Permanent Resident, or a person who has been issued an Entrepreneur Pass or Employment Pass. Any one above 18 years of age can be appointed as the director of a Singapore company. The person to be appointed should not have a history of felony, conviction, or undischarged bankruptcy.
Registered Address in Singapore
Every company in Singapore must have a valid physical address in Singapore. It should remain open and accessible to public during the office hours. The address cannot be a P.O. Box. It also cannot be an HDB apartment address used without prior approval. There are many residential developments, which do not permit the use of a residential address for business purpose.
Setting a Financial Year End
Every Singapore company should fix its financial year end date (FYE). If a Singapore company is a subsidiary then its FYE must correspond to the FYE of its parent holding company. Else, it is up to the company to decide its own FYE.
Appointing an Auditor
Excluding the exempt private companies (EPCs), all other types of companies are required to appoint an auditor within 3 months of its incorporation. To be exempt from the auditing requirements, a company should fulfill the following parameters –
- The company should have an annual turnover of less than S$5 million
- Number of shareholders must be less than 20
- All shareholders must be individuals; no corporate bodies should be the shareholders
Registration of GST
GST (Goods and Service Tax) is also known as VAT (Value Added Tax) in many other countries. It is tax which is imposed on consumption of goods and services in Singapore. Currently, it stands at a rate of 7%, and is imposed as an addition on the selling price of the goods and services. Only GST registered entities can garner this tax, and file a return to the government on a regular basis, which is quarterly.
- GST registration is required if:
- The turnover for the past 12 months was more than S$1 million, which is also known as retrospective basis or
- The expected turnover for the next year is expected to exceed S$1 million, also known as prospective basis
Procuring a Business Specific License
The requirement of a business license mainly depends on the type of business you intend to carry out. You may or may not require a license. If your company needs a license, then you need to apply for it and obtain the authority’s approval before you start the business. However, in Singapore only a few types of businesses require a license to operate.
Financial Record Keeping
It is mandatory for every company in Singapore to maintain all the accounting and financial records, including the profit and loss account balance sheet. These records put forth the financial position of the company. These records must be maintained for a period of 5 years. The directors have the rights to reopen and inspect the records, at any time.
The directors can disclose to the company certain information that he thinks will avoid conflicts of interest or the perception of conflicts of interest. He can disclose any material personal interest that he may have, which relates to the affairs of the company.
Notification of Changes to the Authorities
Any change made to a Singapore company has to be notified to the Registrar of Companies. All the information available with Registrar should be current and updated. Failing to do so will result in penalties.
Company’s UEN Disclosure
Every company in Singapore must have the registration number and the company’s registered name displayed on all business letters, statements of account, invoices, official notices, and publications.
Starting 1 January 2009, all the Singapore registered companies are given a Unique Entity Number (UEN). This number serves as the company’s identification number. This is a single number which is unique for every company. With this number the company can interact with the government, file corporate tax returns, apply for permits and submit their employees CPF contribution. This UEN number replaces all the different identification numbers issued by various government bodies. For companies that are incorporated before this period, their ACRA registration number will be their UEN.
Annual Filing Requirements
A company incorporated in Singapore is required to file its annual return with the Singapore’s company Registrar, ACRA. Besides, it also should file the annual tax return with the Singapore’s IRAS.