As of June 2021, Singapore’s economy has nearly recovered the output lost during the first six months of 2020, and economic growth in 2021 is predicted to be more than 6 percent. Singapore government is also increasing support for the startup ecosystem. All of these factors are creating a new virtuous cycle and attracting foreign entrepreneurs. The startup sector in the country remains vibrant, with S$5.5 billion received in funding, nearly three times the amount from five years ago. If you are considering setting up a company in Singapore, we are here to help.
What is the macroeconomic situation in Singapore at present? What business support schemes have been introduced by the government recently? What regulatory changes came into effect in May? What startup success stories did Singapore see this month? You’ll find answers to these and other business-related questions in our newsletter below.
Business update
Promising times ahead: MAS releases its biannual macroeconomic review
The Macroeconomic Review is an analytical document issued by the Monetary Authority of Singapore (MAS) twice a year. This report is shared with market participants, analysts, and the wider public. It provides an analysis and assessment of macroeconomic developments in the Singapore economy. On April 28, 2021, MAS released its latest issue of the report and here are some key takeaways:
- Singapore’s economy has almost recovered the output lost during the first six months of 2020;
- Economic growth is likely to top 6 percent in 2021, exceeding the upper end of the 4 to 6 percent official growth forecast previously;
- Recovery across industries varies. Prospects for sectors that have been less affected by the lockdown, such as manufacturing, have brightened, but those for sectors that have been hard-hit, such as air transport and accommodation, have deteriorated somewhat due to the global rise in COVID-19 cases and the emergence of more contagious virus strains, particularly in India;
- According to MAS, Singapore’s growth for 2021 is likely to be robust, with external demand picking up and business sentiment among firms in the country turning positive.
You can find the full report of the Macroeconomic Review.
Update on COVID-19 and the travel situation in Singapore
Singapore is frequently cited as a model for fighting COVID-19. Thanks to quick and decisive security measures, the country minimized the impact on its residents, suffering only 32 deaths during the pandemic and one of the lowest per capita Covid deaths. As of the end of May 2021, the country counted about 500 active cases and had vaccinated more than 2 million people, about half of the adult population of the country.
Singapore’s borders are now reopening gradually to allow safe travel in limited numbers, with the necessary safeguards in place to protect public health.
Below is some general advice for visitors:
- Short-term visitors are not allowed to enter Singapore, except those coming in under the Green and Fast Lane arrangements, Air Travel Pass, Connect@Singapore initiative or with special prior approval.
- All approved travellers must abide by the guidelines for COVID-19 prevention and control; they must also follow the prevailing public health regulations of Singapore. More information on entry requirements for various countries can be found here.
- Singapore has also ceased port calls for all cruise vessels.
- Singapore residents, long-term pass holders, and visitors seeking to enter Singapore can check the Ministry of Health and Immigration and Checkpoints Authority websites for updates on the situation in the country, border control measures in relation to COVID-19, and measures for inbound travellers.
- Currently Singapore is in discussions with various countries and regions on developing bilateral arrangements for safe travel.
MAS to commit S$42 million for a new RegTech grant scheme
On April 30, 2021, MAS announced it would commit S$42 million for a new Regulatory Technology (RegTech) grant program. This incentive aims to accelerate technology adoption in the financial sector.
The RegTech grant will promote adoption and integration of technology solutions in the risk management and compliance functions of Financial Institutions (FIs). It is available to Singapore-based FIs.
The government assistance program will cover two tracks. Under the Pilot Track, FIs can seek funding to pilot potential RegTech solutions before embarking on full-scale integration of the product into its operating environment. Funding for this part of the grant will be capped at S$75,000.
Through the Production Level project track, FIs can seek funding to develop larger scale, customised projects that can be fully integrated into the FIs’ systems. Funding for this track will be capped at S$300,000.
You can find out more about this grant on the MAS webpage. If you are an eligible Financial Institution and would like to apply for this funding, please contact our incentives team.
Singapore joins the Regional Comprehensive Economic Partnership FTA
The Regional Comprehensive Economic Partnership (RCEP) Agreement is a Free Trade Agreement (FTA) among 15 countries: 10 ASEAN countries, as well as Australia, China, Japan, New Zealand, and South Korea. It is the world’s largest FTA, comprising about 30% of global GDP and about a third of the world’s population.
The agreement is intended to reduce tariffs and red tape. It includes unified rules of origin throughout the bloc, which may facilitate international supply chains and trade within the region. It also prohibits certain tariffs.
On April 9, 2021, Singapore ratified the RCEP agreement. According to MAS, this FTA will be very beneficial for Singapore: it will reduce tariffs and harmonise trade rules. Singapore and the region stand to gain from it by becoming more deeply plugged into global supply chains. RCEP is expected to increase regional trade flows and deepen cross-border production linkages among the 15 member economies. Given this new development, setting up an export-import company in Singapore becomes even more attractive. If you are interested in this option, please contact the CorporateServices.com team.
Regulatory update
Penalty framework for filing Annual Returns deferred
At the end of 2020, the Singapore government announced plans to implement a 2-tier penalty framework for filing annual returns and annual declarations by Singapore incorporated companies, Variable Capital Companies (VCCs), and Limited Liability Partnerships (LLPs), taking effect from April 30, 2021. Under this framework, these entities would incur a late lodgment penalty of S$300 if the annual return or annual declaration is filed within 3 months after the filing due date, or S$600 if the lodgment is filed more than 3 months after the deadline.
Recently, ACRA announced that implementation of the 2-tier penalty framework has been put on hold to allow more time for transition. The current penalty framework (flat rate of S$300 for Local Companies and 8-tier penalties ranging from S$50 to S$350 for Foreign Companies, VCCs, and LLPs) will continue to apply for late filing of annual returns and annual declarations.
New extension of COVID-19 arrangements for conduct of meetings
In March 2020, the Singapore Ministry of Law issued the COVID-19 Alternative Arrangements for Meetings Order, enabling various types of entities to convene and conduct meetings through electronic means, even if this is not normally allowed under the law that provides for the meeting. Initially this order was planned to be applied to the period starting on March 27, 2020, and ending on June 30, 2021.
Recently, the Ministry of Law announced that it would extend the duration of alternative arrangements for meetings beyond June 30, 2021. The aim of this extension is to provide entities with greater legal certainty to plan their meetings, and the option to hold virtual meetings and minimise physical interactions, amid the continuing COVID-19 situation.
Therefore, the Meetings Order will be in effect until it is revoked or amended by the Ministry of Law. To provide certainty to companies organising meetings, the government will give at least 6 months’ advance notice before the alternative arrangements cease to be available. Please visit this website for more information.
Revised XBRL filing requirements
All Singapore incorporated companies are required to file Financial Statements (FS) with ACRA, except those that are exempted. Since 2014, the Singapore government has required certain companies to file their FS in eXtensible Business Reporting Language (XBRL). XBRL is an XML-based format for financial documents that businesses use to exchange financial information. Therefore, some companies are filling a full set of FS in XBRL format, while some others file only key financial data in XBRL and a remaining set of FS documents is sent in PDF format.
In April 2021, ACRA announced that starting from May 1, 2021, companies that are filing FS in XBRL have to apply the revised XBRL filing requirements and data elements. Please find all the details on revised filing requirements on ACRA website.
Obligation to file RORC information by June 30, 2021
Effective from July 30, 2020, all Singapore companies and Limited Liability Partnerships (LLPs), unless exempted, are required to lodge the information maintained in their Register of Registrable Controllers (RORC) with ACRA’s central non-public register, in addition to maintaining their own RORC, either in their registered office address or at the office of their authorised filing agent.
ACRA reminds all Singapore companies and Limited Liability Partnerships, unless exempted, to file the information maintained in their RORC with ACRA by June 30, 2021. This can be done at the “Update Register of Registrable Controllers (RORC)” transaction in the BizFile+ portal.
We advise you to file the mentioned information by the due date to avoid penalties.
MAS warns public on crypto trading
On April 5, 2021, MAS published a reply to a parliamentary question on the crypto asset market. The reply was provided by Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS.
He noted that investors should exercise extreme caution when trading cryptocurrencies, as these assets can be highly volatile because their value is typically not related to any economic fundamentals. They are hence highly risky investment products, and not suitable for retail investors.
His comments come as cryptocurrency-related scams are on the rise in Singapore, as investor interest in the space grows with soaring crypto prices.
To address scams, as well as the Money Laundering and Terrorism Financing (ML/TF) risks associated with cryptocurrencies, MAS has taken the following steps on three fronts.
- Digital payment token service providers, which are entities involved in providing cryptocurrency-related services, need to be licensed by MAS. They must comply with AML/CFT requirements, such as obligations to perform customer due diligence and transaction monitoring. They are also required to file suspicious transactions reports with the Commercial Affairs Department (CAD).
- MAS has stepped up surveillance of the cryptocurrency sector to identify suspicious networks and higher-risk activities for further supervisory scrutiny.
- MAS and the CAD will raise public awareness on the risks of investing in digital payment tokens.
You may find the full version of the reply to the parliamentary question.
Startup update
GOOD Meat raises US$170 million to produce meat from animal cells
GOOD Meat is a Singapore-based subsidiary of the US-based sustainable food company Eat Just. The company’s main product is meat made from animal cells instead of slaughtered livestock. Josh Tetrick, the co-founder and CEO of Eat Just, asserts that meat produced without killing animals will replace conventional meat at some point in our lifetimes, and says that the faster we make that happen, the healthier our planet will be.
On May 19, 2021, the company announced it had secured US$170 million in new funding. Investors include UBS O’Connor, a hedge fund manager within UBS Asset Management, Graphene Ventures, and K3 Ventures.
GOOD Meat will use the new capital to increase capacity and accelerate R&D for high-quality, real meat without slaughter.
Biotech startup Hummingbird Bioscience closes its US$125 million Series C financing round
Hummingbird Bioscience is a Singapore-based clinical-stage biotech company focused on developing precision therapies against hard-to-drug targets to improve treatment outcomes. The startup claims that its novel data-driven, systems biology approach brings new precision to the field of antibody drug discovery and development.
On May 19, 2021, Hummingbird Bioscience announced the close of its US$125 million Series C financing round, led by Novo Holdings.
The round also saw participation from new investors, including Frazier Healthcare Partners, Octagon Capital, EDBI, AMGEN Ventures, and others. Existing investors including SK Inc., Heritas Capital, and Mirae Asset Venture Capital also joined the round.
The biotech startup will use fresh funds to advance the clinical development of its drugs against solid tumours.
FinTech startup Thunes bags US$60 million
Thunes is a Singapore-headquartered B2B cross-border payments company that connects 260 businesses in 110 countries. Their payment network interconnects financial institutions and businesses in developed and developing markets and allows any payment player to transfer money across borders instantly, without the need for complex integrations to multiple systems. Thunes’ platform is used by global banks, money transfer operators, platforms, and other businesses to make payments to bank accounts, mobile wallets, and cash pick-up providers around the world.
On May 19, 2021, the company announced it had closed a US$60 million Series B growth round, led by global private equity and VC firm Insight Partners. Existing shareholders, including GGV Capital, Helios Investment Partners, and Checkout.com, also participated.
According to Peter De Caluwe, CEO of Thunes, the new funds will help the company to speed up investment in their operations, product, and technology.
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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