Staying up-to-date with regulatory changes is vital for business owners. In March 2024, significant regulatory shifts unfolded across various sectors in Singapore, signaling the country’s dedication to transparency, efficiency, and adherence to international standards. Notably, the Ministry of Finance and the Accounting and Corporate Regulatory Authority proposed a new Corporate Service Providers (CSP) Bill and amendments to existing laws, aiming to bolster oversight within the CSP sector. Furthermore, other legislative amendments focusing on digital communications with businesses and efforts to promote punctual filing reflect Singapore’s commitment to modernizing its regulatory framework. In this blog post, we explore key regulatory updates from March 2024 that may be of interest to Singaporean company owners.
New Regulatory Regime for Corporate Service Providers
Singapore’s Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (ACRA) have proposed a new Corporate Service Providers (CSP) Bill alongside amendments to the Companies Act 1967 and Limited Liability Partnerships Act 2005. These initiatives aim to enhance regulatory oversight and transparency within the CSP sector. Public feedback on these proposals was sought from 12 to 25 March 2024.
The key proposals involve mandatory registration with ACRA for all entities providing corporate services in Singapore, accompanied by fines of up to S$100,000 for non-compliance with anti-money laundering and counter-terrorism financing obligations. Additionally, the misuse of nominee directorship arrangements is targeted, with individuals only permitted to act as nominee directors through registered CSPs, subject to assessment as fit and proper.
Furthermore, the proposed regulations emphasize corporate transparency by requiring disclosure of nominee status and nominator identities to ACRA. Penalties for breaches regarding the Register of Registrable Controllers, Register of Nominee Directors, and Register of Nominee Shareholders are set to be increased, signaling a commitment to integrity and compliance within corporate governance structures.
Proposed Legislative Amendments Relating to Digital Communications With Businesses
In a bid to modernize Singapore’s corporate regulatory framework, the Ministry of Finance and the Accounting and Corporate Regulatory Authority have introduced proposed amendments to the Accounting and Corporate Regulatory Authority Act 2004 and the Companies Act 1967. These proposals aim to streamline regulatory processes and enhance communication channels with businesses and stakeholders.
Key among these amendments is the facilitation of digital communications. The proposals advocate for statutory correspondences and notices to be transmitted and accessed through digital mailboxes. Additionally, there’s a provision mandating business entities, position holders, shareholders, and members to maintain updated email addresses with ACRA. This move not only promotes efficiency but also ensures that stakeholders stay informed in a timely manner.
Furthermore, the proposed amendments seek to improve filing convenience and data accuracy. Empowering the Registrar to utilize information from specified government agencies would enable ACRA to maintain accurate registers. Additionally, the amendments aim to enhance the accuracy of directors’ registers by allowing the Registrar to reflect individuals’ disqualification status for all types of disqualifications under the Companies Act. Lastly, streamlining financial reporting requirements for foreign companies is also on the agenda, showcasing Singapore’s commitment to creating a business-friendly environment while upholding regulatory standards.
ACRA Encourages Timely Filing of Annual Returns and Annual Declarations
In an effort to promote punctuality in filing Annual Returns and Annual Declarations, ACRA has initiated a proactive approach. The agency is now sending email reminders directly to office holders, urging them to submit their filings promptly. The objective is to reduce instances of late filings, which can incur penalties of up to S$600.
This initiative underscores ACRA’s commitment to ensuring compliance with regulatory requirements while minimizing financial penalties for businesses. By leveraging digital communication channels, ACRA aims to facilitate easier and more efficient interactions between businesses and the regulatory authority.
To take advantage of this service and stay informed about filing deadlines, office holders are encouraged to ensure their email addresses are updated on BizFile+, ACRA’s online filing system. This proactive measure not only helps businesses stay compliant but also fosters a culture of responsibility and accountability in corporate governance.
Key Changes Introduced by The FIMA Bill
The Financial Institutions (Miscellaneous Amendments) Bill (FIMA Bill) is a significant legislative proposal aiming to bolster the regulatory framework overseen by the Monetary Authority of Singapore. Introduced by Mr. Alvin Tan, Minister of State, the bill encompasses amendments across six key Acts administered by MAS, including the Financial Advisers Act 2001, Securities and Futures Act 2001, and Trust Companies Act 2005.
One of the primary focuses of the FIMA Bill is the enhancement of MAS’ investigative powers. By standardizing and strengthening investigation procedures across the MAS-administered Acts, the bill aims to enable MAS to conduct rigorous investigations into suspected violations effectively. Proposed amendments include empowering MAS to require individuals to appear for examinations and statement-recording, as well as allowing entry to premises without prior notice to prevent the destruction of evidence.
Furthermore, the FIMA Bill seeks to facilitate the transfer of evidence between MAS and law enforcement agencies, such as the Police and Public Prosecutor. This amendment aims to streamline the exchange of information, particularly in cases where criminal prosecution is warranted. By expanding MAS’ regulatory reach and enabling more efficient collaboration between agencies, the bill enhances Singapore’s ability to combat financial misconduct and maintain the integrity of its financial system.
Auto-Inclusion Scheme and Its Tax Filing Benefits
The Auto-Inclusion Scheme (AIS) plays a pivotal role in simplifying the tax filing process for over 2 million employees in Singapore. Employers are mandated to submit their employees’ income data to the Inland Revenue Authority of Singapore by 1 March each year to avoid penalties and prosecution. Failure to comply can result in fines of up to S$5,000 for employers and up to S$10,000 for key personnel, along with potential imprisonment for up to 12 months.
In 2023, despite repeated reminders, approximately 1 in 10 employers on the AIS failed to file their employees’ income data on time, leading to over 900 prosecutions and penalties exceeding S$1 million. Common reasons for late submissions included administrative challenges and changes in personnel handling AIS responsibilities. Notably, businesses in sectors such as restaurants, food courts, general contracting, and retail were among the majority fined.
The AIS not only benefits employees by streamlining the tax filing process through pre-filled tax returns or No-Filing Service (NFS) but also ensures accurate tax assessments. With approximately 110,000 employers expected to participate in AIS this year, IRAS urges timely submission of employment income information to avoid discrepancies and potential penalties. Additionally, employers are encouraged to voluntarily disclose any past errors or omissions to IRAS to mitigate penalties under the Voluntary Disclosure Programme.
Over 4,200 Applications Approved in First Year of Singapore’s One Pass for Top Foreign Talent
In its inaugural year, Singapore’s Overseas Networks and Expertise (One) Pass scheme has seen a remarkable uptake, with nearly 4,200 applications approved, according to Manpower Minister Tan See Leng. Introduced to attract top global talent across all sectors, the One Pass allows individuals to commence, manage, and work for multiple companies simultaneously. The scheme targets individuals with valuable networks, exceptional skills, and profound expertise, aiming to bolster Singapore’s talent pool and stimulate economic growth.
One Pass holders enjoy various privileges, including the ability to sponsor dependents and secure employment for their spouses through a Letter of Consent. Moreover, they are exempted from job advertising requirements under the Fair Consideration Framework and the Complementarity Assessment Framework for Employment Pass holders. To qualify, applicants must command a minimum monthly salary of S$30,000, either within the past year or with a prospective employer in Singapore.
Dr. Tan emphasized the significance of top talent in driving economic prosperity, referring to One Pass holders as “rainmakers” who create opportunities and generate high-quality jobs. While the current cohort of One Pass holders is relatively small, they are influential figures concentrated in vital sectors such as finance and information technology. Despite the predominance of conversions from existing passes among One Pass holders, there is a growing interest in the scheme, indicating its potential to attract and retain top talent in Singapore’s competitive landscape.
Singapore’s Moves to Tighten Foreign Worker Quota and Raise Levies in Specific Industries
Singapore is taking steps to reduce its marine and offshore engineering sector’s reliance on foreign labor and enhance productivity by tightening the sector’s dependency ratio ceiling (DRC) and increasing foreign worker levies starting from 2026. Minister for Trade and Industry Gan Kim Yong announced these measures during the Ministry’s Committee of Supply debate. The DRC, which specifies the maximum proportion of S Pass and Work Permit holders in a company, will be lowered to 75%, aiming to encourage the sector to pivot towards higher-skilled and higher-value activities and reduce its dependence on foreign manpower.
Foreign worker levy hikes initially announced in 2013 but deferred due to sectoral challenges and the Covid-19 pandemic will now proceed as planned. These measures aim to prompt the marine and offshore engineering sector to reevaluate its operational model, embracing transformation to remain productive, globally competitive, and well-positioned to seize new growth opportunities. Minister Gan emphasized the significance of supporting this transition, announcing a S$100 million support package over the next five years to facilitate the sector’s evolution.
Additionally, Singapore is capitalizing on emerging growth opportunities, such as offshore wind, projected to expand rapidly until 2030. The government plans to identify and harness opportunities along the value chain, anchoring them in Singapore. This initiative includes funding for innovation, building offshore wind capabilities, and enhancing productivity through mechanization tools. Efforts to improve the sector’s branding, promote workforce transformation, and develop local talent are also underway, with initiatives such as the Marine and Offshore Engineering Industry Digital Plan, Jobs Transformation Map, and the Marine Digitalisation Champion Programme aimed at enhancing sectoral competitiveness and sustainability.
Extended SkillsFuture Credit Top-up: No Expiry for Those Aged 40 to 60 Until 2025
Singapore has announced a significant extension to the SkillsFuture Credit scheme, aimed at facilitating mid-career reskilling and promoting lifelong learning. The one-time S$500 SkillsFuture Credit top-up provided in 2020 to individuals aged 40 to 60 will no longer expire by the end of 2025, as originally planned. Instead, any remaining balance from this allocation will be combined with the upcoming S$4,000 top-up announced in Budget 2024, providing more flexibility and opportunities for mid-career individuals to enhance their skills.
Under the revised scheme, SkillsFuture Credit will be structured into two tiers. Singaporeans aged 25 and above will receive a base tier of S$500, which will remain valid indefinitely and can be utilized for a diverse range of over 28,000 approved courses. Additionally, starting from May 1, a new mid-career tier will be introduced, offering a S$4,000 top-up specifically for individuals aged 40 and above. This mid-career top-up will also have no expiry date, allowing mid-career professionals to leverage the credit strategically to enhance their employability and adapt to evolving industry demands.
Assurance Against GST Increases: DPM Lawrence Wong’s Pledge until 2030
Deputy Prime Minister and Finance Minister Lawrence Wong has affirmed that there will be no necessity for further increases in the Goods and Services Tax (GST) until 2030. Addressing concerns raised during the Budget debate in Parliament, he emphasized that the two-percentage-point GST hike, implemented in stages from 2023 to 2024, is designed to address the fiscal gap up to 2030. The revenue generated from this increase will be directed towards meeting Singapore’s medium-term needs, particularly in healthcare and social spending.
The assurance against GST increases until 2030 provides stability and predictability for individuals and businesses in Singapore. DPM Wong clarified that the intention behind the GST hike was to ensure fiscal sustainability and balance revenue with expenditure in the coming years. He emphasized the importance of prudent fiscal management, highlighting the government’s commitment to maintaining a sound fiscal system while meeting the evolving needs of the nation. Additionally, measures such as the Assurance Package have been implemented to alleviate the impact of the GST hike on Singaporeans, particularly low-income groups, by deferring its effects for over five years.
Conclusion
As Singapore continues to refine its regulatory framework and enhance its business environment, businesses must stay informed and adapt to evolving requirements. The recent proposals and initiatives outlined in this regulatory update highlight Singapore’s commitment to fostering transparency, efficiency, and compliance across various sectors. From new regulations for corporate service providers to amendments facilitating digital communications and bolstering financial regulations, these changes reflect Singapore’s dedication to maintaining its status as a global business hub.
In navigating these regulatory changes and ensuring compliance, businesses can rely on trusted partners like CorporateServices.com. With expertise in Singapore company incorporation and administration services, we offer tailored solutions to meet the diverse needs of businesses looking to establish and expand their operations in Singapore. For more information, please contact our team.
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