Singapore has consistently upheld its stellar reputation as a country known for its clean, efficient, and attractive business environment. Whenever its image encounters rough patches, the government takes a proactive approach by analyzing, identifying, and addressing the root causes of such issues. One such step was the introduction of the Corporate Service Providers Act 2024, which came into force in June 2025. This law was enacted to strengthen Singapore’s anti-money laundering framework and improve its ability to tackle financial crime.
This post explains the vital role CSPs play in Singapore’s business ecosystem and the enhanced regulatory measures introduced by the new legislation to govern their professional activities more effectively.
The Role of Corporate Service Providers
In Singapore, a corporate service provider (CSP) is a company that offers essential corporate secretarial services to business entities. The most common services provided include:
- Incorporation of companies with ACRA (Accounting and Corporate Regulatory Authority)
- Acting as a company secretary
- Providing a registered office address
- Maintaining statutory registers and records
- Handling corporate tax and filing services
- Providing payroll and accounting services
A Singapore Corporate Service Provider (CSP) is authorized to conduct transactions on behalf of its clients through the government’s BizFile+ portal and must be registered as a Filing Agent (FA). Filing Agents can include law firms, accounting firms, or corporate secretarial firms. These CSPs utilize various government online portals to manage the necessary statutory filings for their client companies.
There are currently about 2,900 CSPs registered with the regulator. With some 617,000 corporate entities registered in Singapore, CSPs are integral to the country’s regulatory infrastructure.
Spotlight on Unethical Practices by Certain CSPs
Despite the vital role corporate service providers play and the fact that most CSPs in Singapore are law-abiding, there have been instances of a handful of bad players in the CSP sector with unethical practices that put Singapore’s reputation as a safe and transparent business hub under threat. Some of the most severe offenses conducted by these CSPs are knowingly assisting with money laundering and scams. A notable incident was the “Fujian gang” case, where a CSP created a complex web of companies used to launder S$3 billion.
The Accounting and Corporate Regulatory Authority has been proactively combating malpractices and poor professional standards among Corporate Service Providers (CSPs). Between 2021 and 2023, ACRA canceled the registrations of 17 entities. In November 2023, ACRA established a specialized unit to use data and technology to detect irregular activities when companies are set up, enhancing surveillance and enforcement.
New Measures Implemented by Singapore
As part of the measures to close regulatory gaps and hold CSPs accountable for bad practices, the Singapore government passed a new Corporate Service Providers Bill on July 2, 2024. The legislative amendments introduce the following key changes:
Mandatory Registration with ACRA for All Corporate Service Providers
Under the new legislative amendments, all business entities providing corporate services in Singapore must register with ACRA as Corporate Service Providers (CSPs). This now includes even those not involved in filing transactions with ACRA, as well as entities providing accounting-related services.
Non-compliance with the registration requirement can result in severe penalties, including fines up to S$50,000, imprisonment for up to two years, or both. Continuous offenses may incur additional fines of up to S$2,500 per day.
This amendment addresses the regulatory gap where CSPs not filing with ACRA were not subjected to registration obligations, potentially facilitating illicit activities. The changes ensure a comprehensive regulatory framework for all CSPs, creating a level playing field and enabling ACRA to enforce compliance effectively.
Compliance Requirements for Registered CSPs
All registered CSPs are required now to adhere to strict compliance obligations, including those related to Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Proliferation Financing (PF). These obligations also extend to the prevention of financing the proliferation of weapons of mass destruction.
The specific requirements will be detailed in subsidiary legislation, ensuring alignment with the Financial Action Task Force’s (FATF) recommendations. This alignment guarantees that registered CSPs comply with the standards set forth in the United Nations Act 2001, thereby enhancing Singapore’s regulatory framework and reinforcing its commitment to global security standards.
Introduction of Fines for Breaches of AML, CFT, and PF Obligations
New law introduces stringent fines for registered CSPs and their senior management who breach AML, CFT, PF obligations.
Key Points:
- Fines for CSPs: Registered CSPs found in breach of AML, CFT, or PF obligations face fines up to S$100,000 per violation.
- Senior Management Liability: Senior management failing to ensure compliance with these obligations also face fines up to S$100,000 per breach.
Regulation of Nominee Directors and Fit and Proper Assessments
New measures prohibit individuals from acting as nominee directors for companies unless their appointments are arranged by a registered CSP, which must assess them as fit and proper.
Key Points:
- Nominee Directors by Registered CSPs: A person cannot act as a nominee director for a company unless appointed through a registered CSP. Violating this requirement results in a fine of up to S$10,000.
- Fit and Proper Assessment: Registered CSPs must ensure that nominee directors are fit and proper, considering factors like legal disqualifications and other criteria set by subsidiary legislation. Failure to comply can lead to fines up to S$100,000.
These changes aim to prevent the misuse of nominee directorships for creating shell companies used in money laundering, targeting CSPs that enable unqualified individuals to act as nominee directors.
Disclosure Requirements for Nominee Directors and Shareholders
New regulations mandate the disclosure of nominee directors’ and nominee shareholders’ statuses and the identities of their nominators to ACRA.
Key Points:
- Mandatory Disclosure: Companies and foreign companies must file all information from their registers of nominee directors and nominee shareholders with ACRA.
- Public Availability: The nominee status of directors and shareholders will be made publicly available, including in business profile extractions.
- Access for Public Agencies: Only public agencies may access the full information maintained by ACRA for the administration or enforcement of any written law.
Increased Fines for Register Compliance
The new measures significantly increase fines for non-compliance with requirements related to maintaining registers of registrable controllers, nominee directors, and nominee shareholders.
Key Points:
- Increased Penalties: The maximum fines for offenses have been raised from S$5,000 to S$25,000.
- Scope of Fines: These fines apply to:
- Registers of registrable controllers, nominee directors, and nominee shareholders for companies.
- Registers of registrable controllers for limited liability partnerships.
These changes aim to ensure the accuracy of information in these registers and align the penalties with the FATF’s recommendations, making them more dissuasive and effective in promoting compliance.
A Timely Action
The implementation of these measures is a timely and necessary action to uphold Singapore’s reputation as a trustworthy and transparent business hub. By ensuring CSPs adhere to high ethical standards, Singapore reinforces its commitment to integrity and compliance in the corporate sector.
Mr. Leong, who heads ACRA’s compliance and legal group, emphasized the importance of swift action, stating, “One thing that we have learnt in the past few years is, at least for the CSPs, we should move faster to root them out early, because if they continue to have the registration, they can continue to incorporate companies.”
How We Can Help
Our team provides professional support to businesses looking to set up and maintain a company in Singapore. We offer dependable and ethical corporate services to help you meet compliance requirements and operate in line with local regulations. If you need assistance or would like to learn more about how we can support your business, please contact us.
About CorporateServices.com
Headquartered in Singapore, CorporateServices.com, empowers global entrepreneurs with information and tools necessary to discover Singapore as a destination for launching or relocating their startup venture and offers a complete range of company incorporation, immigration, accounting, tax filing, and compliance services in Singapore. The company combines a cutting-edge online platform with an experienced team of industry veterans to offer high-quality and affordable services to its customers. Contact Us if you need assistance with setting up a new Singapore company or if you would like to transfer the administration of your existing company to us.
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