What Every Startup Needs to Know About Compliance in Singapore

Starting a business in Singapore? Congratulations! Known for its business-friendly environment, Singapore is a global hub for innovation and entrepreneurship. However, ensuring compliance with local laws and regulations is crucial to the success and sustainability of your startup. Here’s what you need to know:

1. Business Registration

• Register your company with the Accounting and Corporate Regulatory Authority (ACRA).
• Choose the right business structure (e.g., sole proprietorship, partnership, private limited company).

2. Employment Compliance

• Follow the Employment Act for work passes and fair labour practices.
• Ensure timely contributions to the Central Provident Fund (CPF) and Skill Development Levy (SDF) for employees.
• Provide statutory benefits (e.g., annual leave, medical leave, overtime pay, maternity benefit).

3. Tax Obligations

• File annual corporate tax returns with the Inland Revenue Authority of Singapore (IRAS).
• Register for Goods and Services Tax (GST) if annual revenue exceeds S$1 million.
• Maintain records of all financial transactions and documents for at least five years.
• Comply with Singapore Financial Reporting Standards. 

As a new start-up you can enjoy tax exemptions by keeping your company’s FYE within 365 days. (75% tax exemption on the first SGD 100,000 of normal chargeable income and an additional 50% tax exemption on the next SGD 100,000 of normal chargeable income for its first three consecutive YA).

For ease of business the IRAS has introduced tax exemption scheme for start up companies which they can enjoy for their first 3 assessment years. For further details please refer to IRAS-website.

While tax exemptions provide great benefits to startups, they do come with some limitations.

• Duration: The tax exemption benefits are available only for a specified period (normally three years). After that, the benefits are gradually reduced.
• Shareholding changes: Altering the shareholding structure could impact the startup’s eligibility for tax exemption.
• Cessation of CIGAs: If the startup ceases its qualifying core activities, the tax exemption might be affected.

Thus, planning for the transition to regular taxation is crucial. This can be done by assessing the financial impact of increased tax liability and making necessary adjustments to the business’s financial strategies.

4. Data Protection

• Comply with the Personal Data Protection Act (PDPA).
• Obtain consent before collecting or using personal data.
• Implement and communicate clear privacy policies.

For details please refer to Data Protection Obligations under PDPA.

5. Industry Licenses & Permits

• Check if your business requires specific licenses (e.g., Fintech, F&B, retail, healthcare etc.)
• Apply for and renew licenses through relevant government agencies like MAS, Health Sciences Authority etc.

6. Annual Filing and other compliance requirements under the Companies Act

• File annual returns and financial statements with ACRA.
• Hold annual general meetings (AGMs) if applicable.
• Maintain proper records for audits and inspections and update accordingly.

7. Securities Law

• If your start-up intends raising capital check for any licensing requirements under the Securities and Futures Act.
• Comply with MAS requirements for prospectus filing/registration exemptions

Stay compliant to unlock the full potential of Singapore’s business-friendly ecosystem!

For more information, visit ACRA’s website.

Written by: Debashis Banerjee

Co-authored by: Swapna Umakanth

Disclaimer

The information provided on this blog is for general informational purposes only and is not a substitute for professional legal advice. We are not a law firm and are not authorized to practice law in your jurisdiction. Laws and regulations are complex and constantly changing, and information that may be true in one jurisdiction may not apply in another. Before acting on any information you read here, you should consult with a qualified lawyer practicing in the relevant jurisdiction for your specific legal issues or concerns. While we strive to provide accurate and up-to-date information, we make no guarantees that the information on this blog is completely current or error-free. We disclaim any liability for any actions taken or not taken based on the information on this blog.