Singapore continues to be the most attractive business hub for entrepreneurs worldwide. In July 2024 alone, about 4,100 new companies were registered, underscoring the city-state’s dynamic business environment. To maintain this status, Singapore is committed to ongoing efforts to keep its business regulatory ecosystem as pro-business as possible. In this blog post, we will review key regulatory updates, business events, new government services, business support schemes, and other updates that may interest entrepreneurs who already run a company in Singapore or plan to incorporate one.
Strengthening AI Governance for a Business-Supportive Ecosystem in Singapore
Singapore is taking significant steps to strengthen AI governance to create a more business-supportive ecosystem. The Ministry of Digital Development and Information (MDDI) is set to introduce new guidelines aimed at mitigating data risks associated with AI-enabled products and services. In her address at Personal Data Protection Week, Minister Josephine Teo highlighted the critical need for data and trust in AI, emphasizing the potential risks of bias and the regurgitation of personally identifiable information by generative AI models. These guidelines, which will form part of the AI Verify testing framework and software toolkit, aim to establish a common standard for transparency and testing in generative AI development.
The guidelines are designed to support businesses in deploying AI applications securely, fostering a foundation of trust that is essential for the continued innovation and adoption of AI technologies. The Infocomm Media Development Authority (IMDA) will consult industry stakeholders to ensure the guidelines are robust and relevant. Additionally, MDDI plans to promote the use of Privacy-Enhancing Technologies (PETs), which help optimize data usage while safeguarding personal information. The introduction of a PETs sandbox and a proposed guide on synthetic data generation by the Personal Data Protection Commission are key initiatives to help businesses understand and utilize synthetic data effectively.
Looking ahead, Singapore aims to release a new ASEAN guide on data anonymization early next year. This guide is expected to serve as a vital resource for businesses across the region, enabling more responsible and extensive use of data. By addressing data risks and fostering trust in AI, Singapore is positioning itself as a leader in AI governance, ensuring a supportive environment for businesses to thrive in the digital age.
MAS Invests S$100 Million in Quantum and AI Capabilities
The Monetary Authority of Singapore (MAS) is committing an additional S$100 million to enhance quantum and artificial intelligence (AI) capabilities within the financial sector. This investment, part of the Financial Sector Technology and Innovation Grant Scheme (FTSI 3.0), aims to support manpower costs, technology solutions, and the establishment of AI innovation centers in Singapore. A key component of this initiative is the creation of a quantum track, which includes grants for technology centers, technology innovation, and security. These grants will provide significant funding support for establishing quantum computing functions and enhancing cybersecurity readiness for the quantum era.
In addition to financial support, MAS is working closely with institutes of higher learning and the Institute of Banking and Finance (IBF) to develop talent in quantum technologies. The initiative also includes the development of frameworks and platforms for secure, privacy-protected data exchange, facilitating industry-wide collaboration on AI and quantum technology use cases. By investing in these cutting-edge technologies, MAS aims to position Singapore as a leader in financial sector innovation, fostering a robust and forward-thinking ecosystem.
Strengthening Singapore’s Accountancy Sector: The AWRC Report Release
The Accountancy Workforce Review Committee (AWRC) Report, newly published by ACRA, outlines strategic recommendations to bolster the attractiveness of the accountancy sector in Singapore. To grow the pool of skilled accounting professionals, ACRA will collaborate with stakeholders to ensure rewarding careers through compensation reviews and purposeful job redesign. The report emphasizes creating quality pathways for candidates from diverse educational backgrounds, enhancing work-study opportunities for early industry exposure, and strengthening professional capabilities to equip accountants with future-ready skills. These initiatives aim to meet the evolving demands of the industry and position Singapore as a hub for accounting talent.
ACRA’s efforts to reshape perceptions of the accountancy profession were highlighted in a commentary by Assistant Chief Executive Evan Law, published in The Straits Times on 17 May. Law dispelled the notion that accountancy is solely about number-crunching, underscoring the broad expertise and advisory roles accountants play in financial planning, analysis, treasury, taxation, and corporate governance. Further reinforcing these efforts, ACRA supported the Institute of Singapore Chartered Accountants’ Accounta-Poly Career Day on 8 June, where Dr. Germin Ong, ACRA’s Director of Sector Capability and Development, shared insights on the sector’s appeal. She highlighted the robust demand and diverse opportunities available, encouraging students and professionals to consider accounting as a dynamic and rewarding career option.
HSBC and Singapore Business Federation: Supporting Local Business Expansion Overseas
HSBC and the Singapore Business Federation (SBF) have signed a memorandum of understanding (MOU) aimed at helping local businesses seize new growth opportunities in key trade corridors, including the Greater Bay Area, India, and the Middle East. The partnership leverages SBF’s local network and HSBC’s global connections to facilitate Singapore businesses’ entry into these emerging markets. This collaboration also enables Singapore-based business leaders to benefit from HSBC’s expertise in overseas business expansion and sustainable finance, supporting their international growth and net-zero transition goals.
At the signing ceremony on July 24, HSBC Singapore CEO Wong Kee Joo emphasized the importance of integrating local businesses into global trade flows, particularly in under-tapped markets like India and the Middle East. SBF CEO Kok Ping Soon highlighted the diverse growth opportunities in these regions, from components manufacturing and semiconductors to fintech. To commemorate the occasion, HSBC launched a guide providing insights on six major markets within ASEAN and detailed information on conducting business in the key trade corridors. This initiative marks HSBC as the first global bank to sign an MOU with SBF, reinforcing its commitment to supporting Singapore’s local businesses in their global expansion efforts.
Boosting Digital Innovation: ACRA’s New API Marketplace
ACRA has recently launched its new API Marketplace, designed to provide a secure, scalable, and efficient environment for accessing ACRA’s API services. An API, or Application Programming Interface, is a set of rules and tools that allows different software applications to communicate with each other. By using APIs, businesses can integrate ACRA’s data services directly into their own applications, streamlining processes and enhancing functionality.
The API Marketplace is developed with the needs of data users in mind. It offers mock APIs, which allow users to test various data services before committing to subscriptions. This user-centric approach ensures that businesses can make informed decisions about the data services that best meet their needs. The Marketplace also simplifies the management of subscriptions and monitoring of data consumption, providing a seamless experience for users.
ACRA plans to progressively introduce more data and API services, expanding the capabilities and benefits of the Marketplace. By fostering a more efficient and user-friendly environment, ACRA’s API Marketplace is set to drive digital innovation and support the evolving needs of businesses in Singapore.
Advancing ESG Standards through Enhanced Collaboration
The intersection of accounting with Environmental, Social, and Governance (ESG) issues was a central theme at the 2024 Illinois International Accounting Symposium and Nanyang Business School Accounting Conference, held in Singapore. ACRA’s Assistant Chief Executive, Ms. Kuldip Gill, delivered a compelling presentation on the regulation and climate-related disclosures, emphasizing the urgent need for corporate action on climate change. She highlighted the pivotal role that institutes of higher learning play in advancing progress in this critical area.
Ms. Gill also provided insights into Singapore’s climate reporting and assurance roadmap, underscoring the collaborative efforts required to drive meaningful change in sustainability reporting. She stressed that enhanced collaboration between regulators, educational institutions, and corporations is essential to develop robust ESG standards and practices. By integrating ESG considerations into accounting practices, Singapore aims to lead in sustainability and governance, ensuring that businesses not only thrive but also contribute positively to global environmental and social goals.
Industry Insights: Enhancing ACRA’s Data Services at the Shareback Event
On June 12, ACRA hosted an Industry Shareback event, providing a platform to showcase innovative concepts and ideas from the Data Ideation workshop held in March. This workshop brought together industry groups to brainstorm and co-create ideas aimed at enhancing ACRA’s data services. During the Shareback event, industry partners recapped their ideation journey, highlighting the process of refining workable concepts for prototyping and experiencing the innovative potential of these concepts first-hand.
The event underscored the importance of collaboration in fostering innovation and improving data services. ACRA highlighted that it extends its appreciation to all partners for their valuable contributions and looks forward to continued collaboration and innovation in the future. By engaging industry stakeholders in the ideation and development process, ACRA aims to create more effective and user-centric data services that meet the evolving needs of businesses in Singapore.
Strict Measures Against Unethical Corporate Service Providers
On July 2, 2024, Parliament passed the Corporate Service Providers Bill and the Companies and Limited Liability Partnerships (Miscellaneous Amendments) (CLLPMA) Bill, initiated by the Ministry of Finance (MOF) and ACRA. These legislative changes are designed to close regulatory gaps and hold Corporate Service Providers (CSPs) accountable for illegal and unethical activities. A key amendment mandates that all business entities providing corporate services in Singapore must register with ACRA as CSPs. This includes entities not previously required to register, such as those not involved in filing transactions with ACRA, as well as entities providing accounting-related services. Non-compliance with this registration requirement can result in severe penalties, including fines up to S$50,000, imprisonment for up to two years, or both, with additional fines for continuous offenses.
The new legislation also imposes strict compliance obligations on registered CSPs, including adherence to Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Proliferation Financing (PF) standards. These requirements align with the Financial Action Task Force’s (FATF) recommendations and the United Nations Act 2001. Fines for breaches of these obligations can reach up to S$100,000 per violation, with senior management held equally accountable. Furthermore, the amendments regulate nominee directors, requiring that their appointments be arranged by registered CSPs, which must assess their suitability. Disclosure requirements for nominee directors and shareholders are also enhanced, with increased fines for non-compliance. These comprehensive measures aim to prevent the misuse of nominee directorships for creating shell companies used in money laundering and ensure a robust and transparent regulatory framework for all CSPs in Singapore.
The Importance of Tax Compliance: Director Imprisoned for GST Evasion
On July 18, 2024, Desmond Ng Teng Poh, the 51-year-old sole shareholder and director of Studioholic Private Limited (SPL), was convicted of assisting SPL in evading S$351,506 in Goods and Services Tax (GST). Ng was also found guilty of providing falsified documents during an audit with the intent to evade GST, and an additional charge was considered for sentencing. His fraudulent actions included making false entries in SPL’s quarterly GST return for March 2018 by claiming input tax for non-existent purchases and submitting falsified documents to IRAS auditors in July 2018. For these offenses, Ng was sentenced to 38 months in prison and ordered to pay S$2,458,537 in penalties.
The case underscores the severe penalties for GST evasion and non-compliance. Offenders who wilfully submit false GST returns by overstating input tax, understating output tax, or making fictitious claims face penalties of up to three times the tax undercharged, fines up to S$10,000, and imprisonment for up to seven years. Enhanced sentencing frameworks consider factors such as the quantum of tax evaded, the degree of planning, and the duration of the offense. Additionally, providing false information to IRAS during audits can result in similar penalties. Businesses and individuals are urged to fully cooperate with IRAS and report any past tax mistakes to mitigate potential actions.
Facilitating Digital Trade: Singapore and EU’s New Agreement
Singapore and the European Union (EU) have successfully concluded negotiations on a groundbreaking digital trade agreement, jointly announced by representatives from both parties on July 25, 2024. This EU-Singapore Digital Trade Agreement (EUSDTA) marks the first of its kind between the EU and an ASEAN country, reinforcing Singapore’s role as a leader in digital economy agreements. The EUSDTA builds upon the EU-Singapore Digital Partnership established in February, expanding the scope and depth of digital trade facilitation between the two entities.
The EUSDTA aims to provide clarity and legal certainty for companies and consumers regarding digital trade rules, enhancing digital connectivity and interoperability between the digital markets of Singapore and the EU. This agreement includes high-standard commitments to ensure open and secure data flows, facilitate end-to-end digital trade, and establish trusted digital systems for businesses and consumers. With similar treaties already in place with Australia, South Korea, the United Kingdom, and a joint one with Chile and New Zealand, Singapore continues to solidify its position as a global hub for digital trade and innovation.
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