Guide to Statutory Compliance Requirements for a Singapore Company
Singapore’s hassle-free company incorporation procedures and high standard of living have motivated many foreign entrepreneurs to relocate to this country. However, these companies need to comply with the statutory requirements of the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).
We understand that it is challenging for you to possess an in-depth knowledge of the legal and compliance issues. That is why we are here. Our professional compliance service providers at Jaanik will help you comply with the annual filing requirements of the ACRA and IRAS. These requirements are mandatory for both the active and dormant companies in Singapore. Read on to learn more about the statutory compliance requirements in Singapore.
You need to appoint a company secretary within six months of incorporation. The secretary should be a resident of Singapore and possess all the knowledge about the regulatory compliances stipulated by ACRA and IRAS.
As a new company, you are required to appoint an auditor within three months of the date of your incorporation. Note that you will be exempt from the audit requirements if you have total individual shareholders less than 20 and if your annual turnover happens to be less than S$5 million. You will also be exempt if your business qualifies as a small company with a total annual revenue that is $10m or less than that.
Office Address in Singapore
You are required to have a physical office in Singapore. Your office should be open during working hours. All your company’s correspondence will be sent to this address.
Local Resident Director
You should appoint at least one director who is a resident of Singapore. Your resident director should be 18 years or above and can be a Singaporean citizen, Permanent Resident, EP holder, DP holder or an Entrepreneur Pass Holder.
You need to have a registration number called the Unique Entity Number (UEN), which will be present on all your statements of account, invoices, business letters and official notices among others.
GST Registration in Singapore
Goods & Services Tax (GST) is the tax levied on the import of goods and the supply of goods and services in Singapore. However, financial services as well as the lease or sale of residential properties are exempted from GST in Singapore. The requirement for GST can also be waived if most of the goods and services are exports.
You are required to register with Singapore Customs and get a CR number if your company is into export, import or trans-shipment inside and outside Singapore.
Registration with Central Provident Fund and Skill Development Fund
If your employee is a Singapore citizen or a PR and is earning more than $50 per month, you and the employee are required to contribute a certain percentage of his/her monthly salary to the fund. This compulsory pension fund scheme is called the Central Provident Fund (CPF). Note that employment pass holders are not required to contribute to the CPF.
Apart from CPF, you are also required to pay a fee to the employees up to the first $4,500 of their gross monthly salary at the rate of 0.25 percent or S$2. This is known as the Skill Development Fund (SDF). These are payable not only to Singaporean employees and PRs but also to foreign employees, including casual and part-time workers employed in Singapore.
Determine Your Financial Year-end
A company in Singapore has to decide its financial year-end or FYE. Based on the FYE:
- Your financial statements will be prepared
- The deadline for your accounting requirements’ submission will be determined
Your company can decide whether your financial year-end is the end of December or the end of the quarters, such as June 30 or September 30. Your fiscal year will be the same as your FYE. Our experts at Jaanik suggest that you keep your FYE within the 365 days of the calendar date. It will enable you to enjoy a full tax exemption on $100,000 of normal chargeable income for your first three consecutive YA.
Submitting Estimated Chargeable Income (ECI)
ECI is the estimate of your company’s chargeable income for the Year of Assessment (YA). As per IRAS guidelines, you are required to submit your ECI within three months after the end of the financial year. Irrespective of the amount of your income, you should submit an ECI. In case, you have no income, you need to file a ‘nil’ ECI.