How Recent Regulatory Changes Affect Singapore Companies
If you have been considering opening an offshore company in Singapore then having knowledge of the recent regulatory changes can be of great help. Singapore government has, in the last few months, implemented a series of legislative changes, deployed online services, and signed some international agreements, including the introduction of new incentives to entrepreneurs. All these have been undertaken to improve the ease of doing business within the country.
If you are pursuing engagement in some commercial activity in Singapore, then knowing the changes can be of great help as that will help you know about how the changes can impact your plan for incorporation of a company in Singapore.
Introduction of new digital banks
The monetary authority of Singapore in August 2019 introduced a plan to put in place a new digital bank license. These banks are allowed to take deposits and also provide a range of financial services to retail and non-retail customers. The competition for digital bank licenses is open for both the local and foreign applicants who are interested in venturing into the field. Such services are a welcome development as it will enable Singapore-based companies to reduce their costs of operations as they also increase efficiency with the new digital services.
Cancellation of compulsory quarterly reporting for the majority of listed companies
Singapore exchange regulation also announced that the quarterly reporting would no longer be necessary for the listed companies unless the companies are associated with some higher risk. The new approach will replace the quarterly reporting requirements that are currently needed for companies that have a minimum market capitalization of $75 million.
Any listed firm from now on are expected to undertake quarterly reporting if it lacks clean auditing opinions or if it faces some financial or regulatory compliance issues. There are instances where companies are required to only file semi-annual reporting. This new development is aimed at bringing Singapore at par with other global markets such as the EU countries, U.K, Hong Kong, and Australia.
The overseas digital service providers are required to register for GST in Singapore, and the tax should be charged on the sales of digital services to Singapore companies and individuals. Before this change, digital services that are provided by the local firms were subject to GST while that provided by overseas companies were not. One is considered as a digital service provider if they are delivering services over the internet or through a private electronic network that either requires minimal or no human intervention, and provision of the service would be impossible without the use of information technology.
In the year 2019, the government of Singapore updated the double taxation agreements (DTA), which helped with simplifying the tax obligations for companies that operate in more than one country. The changes included an agreement with countries such as Germany, the republic of Korea and Ukraine. The new tax agreements with the specific countries are aimed at reducing taxes for the companies that operate within Singapore.