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30 MAY 2019

Doing Business in Singapore - 2019 Update

TOPIC : Incorporation

Singapore has been unchallenged at #2 position in the latest World Bank rankings for ease of doing business, close behind New Zealand, for the third consecutive year.

In the economic ranking of 190 countries, Singapore featured among the three Asian economies in the top 10, with Hong Kong in fourth place and South Korea in fifth. Denmark ranked third, with Georgia, Norway, the United States, the United Kingdom and Macedonia completing the top 10.

Singapore's score of 85.24 (218) was mildly higher than 84.97 in the previous year (2017). In its Doing Business 2019: Training for Reform Report, the World Bank mentioned two improvements that enhanced Singapore's accomplishment: doing away with corporate seals, which solves one of the problems of doing business in Singapore and implementing an integrated law on voluntary mediation, thus easing the compliance of contracts.

Incidentally, these were also the two factors that pushed Singapore to a high rank: overall at number three, for setting up a startup and number one for affecting contracts.

The pain areas comprise; addressing bankruptcy (27th), obtaining credit (32nd) and cross-border trade (45th). Singapore's cross-border trade suffered dents due to its comparatively expensive border compliance.

Singapore stands invincible, as a realistic financial and commercial capital of Southeast Asia. After proving its mettle by creating a competitive niche in the form of the ground zero for setting up a regional headquarters, branch offices and management firms in Asia, Singapore’s legal and tax regulations remain among the most market-oriented globally.

By bringing with the reach of foreign investors; highly-skilled manpower, English-speaking business scenario, tremendous technological base and transport facilities and more than 80 Double Taxation Avoidance Agreements (DTAs), Singapore is going full speed ahead as the footbridge to ASEAN, China, India, and the whole of rising Asia for foreign investors.


The Budget 2019 Value Add

With volatile challenges from worldwide trade intensities and the fluctuating economic scenario, how will your business continuously open new avenues and take advantage of new growth prospects?

Budget 2019 inducts further steps and measures to help businesses strengthen their capacities, prepare and nurture a channel of global-ready aptitude, in addition to building a business ecosystem for regional businesses to succeed.


Improved Business Competencies


1.       Automation Support Package

  • Firms can benefit from the Automation Support Package to cover the expense of extensive positioning of automation solutions.
  • Facilitates businesses to automate, propel output and expand with the help of increased grants, tax benefits and loans.


2.       Enterprise Development Grant (EDG)

  • Improved 70% support will be stretched till 31 March 2023.
  • Supports more SMEs as they undertake a deeper and more ambitious transformation in this current phase of our economic restructuring.
  • To begin from 1 April 2020, EDG will launch benefits such as higher salaries, for workers.


3.       Enhancing SG

  • Growth partnership schemes with private and public sectors for business collaboration with fast developing regional companies to determine and establish new functionalities, to break new ground, develop and go global.
  • Companies that qualify on the set parameters will be supported by adept partners and will also have access to resources and networks and business mentors.
  • As much as 70% support for program cost.



Access Financing (to be launched)


Enterprise Financing Scheme (EFS)

  • Organized financing support programs to ascertain that companies get funds at all stages of growth.
  • A comprehensive scheme having a combination of six different financing domains – operating capital, fixed assets, venture debt, trade, projects, and mergers and acquisitions.
  • EFS will offer provisions of additional support with increased risk share from Government in two sectors:
    • New firms will get government risk sharing of a maximum 70% along with Participating Financial Institutions (PFIs).
    • An increased risk share will be granted to fixed assets, project, and M&A financing in markets.           
  • The highest insurance cover for foreign project financing as per the EFS will be increased to S$50 mil and the validity period will be extended to 15 years.
  • Another benefit of this scheme will be an increased upper limit loan cover of S$50 mil for M&A projects so that companies can quickly come up with new capabilities for international expansion.
  • The SME Working Capital Loan scheme will get an extension till 31 March 2021 and will be effective under the new EFS.



Cultivate Talent


1.       Global Ready Talent (GRT) Program

  • Form a channel of global-ready talent for Singapore companies by getting more Singaporeans to take up internships and work-abroad opportunities.
  • Singapore undertakings that offer practical training to students from the Institute of Technical Education (ITE), Polytechnics and Universities can apply for a maximum of 70% funds on the monthly allowance.
  • Singapore companies that offer Management Associate Programs qualify for a maximum of 70% funding for the overseas package and basic monthly salary of the budding talent.


2.      Productivity Solutions Grant (PSG)

  • Support of maximum 70% is proposed to extend till 31 March 2023.
  • The broader scope will be inclusive of a training grant that makes up for 70% support for actual training expenses, which is a maximum amount of S$10,000 per enterprise.



Push innovation


1.       Centres of Innovation for Aquaculture and Energy

Two new Centres of Innovation (COI) for Energy and Aquaculture are to be set up so as to make the technology of front-line innovations more commercial so as to enable Singapore companies to lead the competition in the global market.

2.      Innovation Agents Program

  • Industry professionals with technical expertise and global businesses experience will be hired to mentor regional companies.


Company Incorporation Singapore, Singapore Incorporation Services, Setting up a company in Singapore


Business Ecosystem

The ‘doing business in Singapore’ environment is studded with awards and international rankings like the World Bank’s Doing Business Report, the World Economic Forum’s Global Competitiveness Report and Global Information Technology Report and also Economist Intelligence Unit’s Country Forecasts Report.

These rankings speak about Singapore’s capabilities and infrastructure. Consequently, thousands of multinational corporations (MNCs) have made Singapore their Asia Pacific headquarters, according to the statistics of Singapore’s Ministry of Trade & Industry (MTI).

·         The World Bank’s rating of Singapore as #2nd in its ‘2019 Ease of Doing Business Report’ shows that its policies are highly productive for doing business amongst 190 economies all across the world. Doing business in Singapore requires just two procedures and 24 hours. The best benefits are in the areas of cross-border taxes and trading. Singapore ranks at #8 for paying taxes and was rated as #1 for adhering to contracts.

·         The prestigious Forbes magazine ranked Singapore #8 in its ‘2018 Best Countries to Do Business’ report. Doing business in Singapore has minimal restrictions, monetary policies, property rights, advanced technology, red tape intrusions, it safeguards investors, has negligible corruption and does not involve annoying taxes.



Taxation

Singapore has personal tax structure that can best be described as reformist. Marginal rates range from 0 – 22% and residents can benefit from numerous reliefs, to reduce their net payments.

Singapore also proposes the Not Ordinarily Resident (NOR) Scheme. It presents an advantageous five-year tax handling for those eligible and working in Singapore. These people, employed by a Singapore incorporated company, have a minimum yearly income of S$160,000 and spend a minimum of 90 days per year outside Singapore for business reasons. Accordingly, IRAS does not charge taxes on the income earned during the time spent outside Singapore for business.


Corporate Tax Rates that Invite

Apart from its huge network of open market and tax treaties, Singapore has one of the world’s most attractive corporate tax structures. Despite its marginal rate being the third lowest in the world, its actual tax rate is even lesser, as against other advanced countries.

No tax is charged from overseas companies for the initial three years. This is known as ‘zero tax’ jurisdiction. Avoidance of Double Tax Agreements (DTAs) is an add-on by the Singapore government with other worldwide rules so as to ascertain that the country succeeds and prospers financially.

With their international HQs here, companies gain from Singapore’s network of 76 wide-ranging Double Taxation Avoidance Agreements. They also draw from Singapore’s several free trade deals and the Investment Guarantee Agreements.



Safeguarding Intellectual Property

·         Singapore has transformed into a comprehensive service center for enterprises to manage their intellectual property assets due to its strong copyright security system. According to Forbes magazine, Singapore stands at #7 for property rights in its ‘2018 Best Countries for Business’ directory.

·         In WEF’s ‘2018 Global Competitiveness Report’ Singapore is placed at #4 for its intellectual property protection system.



World Level Competing Power

·         In its ‘2018 Global Competitiveness Report’, the WEF described Singapore as the world’s second most competitive economy. Singapore’s educational institutions were graded as the world’s best and the country is also known to be corruption-free and have the most efficient governance. It stood at the first and second positions respectively, for using its goods and labor markets efficiently. It is placed at #2 for its money market performance, whereas its infrastructure is classified as the second best around the world.

·         The Heritage Foundation’s ‘2018 Index of Economic Freedom’ ranked Singapore at #2. Singapore excelled in nearly every field, including the ease of ability to start, run and wrap up a business; ease of carrying out cross-border trade; resolute in defending proprietary rights and eradicating corruption. Singapore’s corporate income tax is capped at 17%. Government expenditure formed 10.8% of Singapore’s GDP in 2017.

·         Singapore was positioned at #2 in IMD’s ‘2018 World Competitiveness Yearbook’, as the world’s most competitive economy.

 


An Environment that Drives Innovation

The ‘2018 Global Innovation Index’ published by INSEAD and the Confederation of Indian Industry defined Singapore as the seventh among the most innovative economies in the world. Factors that consolidate Singapore’s success in innovation were its open market basics and zero level corruption environment.

 


Stable Governance

·         Capable governance in Singapore makes it a better place for your investment. As per the WEF, Singaporeans trust their politicians a lot due to minimal government regulations and extremely transparent state policies.

·         In Transparency International’s ‘2018 Corruption Perceptions Index’, Singapore was placed at #3.



Doorway to Global Trade

Singapore has signed FTAs (free-trade agreements) with:

·         United States

·         Trans-Pacific Economic Partnership

·         Australia

·         Japan

·         China

·         Jordan

·         New Zealand

·         Korea

·         India

·         Cooperation Council for the Arab States of the Gulf

·         Costa Rica

·         European Free Trade Association (Switzerland, Iceland, Liechtenstein, and Norway)

·         Panama

·         Peru

 

As stated by IE, Singapore has contracted 42 Investment Guarantee Agreements and 75 Avoidance of Double Taxation Agreements, all over the world.  Singapore is also part of the ASEAN-Australia-New Zealand-Free Trade Area, the ASEAN-China Free Trade Area, the ASEAN-India Free Trade Area, the ASEAN-Korea Free Trade Area and the ASEAN-Japan Comprehensive Economic Partnership.

At the Global Trader Dialogue in 2015, Singapore’s former Trade and Industry Minister shared Singapore’s plans to expand as a key worldwide trade hub since it is the third-biggest foreign exchange market, having Asia’s finest US dollar liquidity and the biggest offshore Yuan center.

FTA is an international contract that enhances business liaisons between participating nations. Doing business in Singapore makes it easier to access key international markets and establish substantial business liaisons. The purpose behind the creation of FTAs is also to make tariffs, quota limitations, and other trade provisions simpler.

 

 

Human Resources

·         Reports say that Singapore is at the peak of BERI’s ‘Labor Force Evaluation Measure’ since the past 31 years. Thus, it is evident that has the best human resources in the world.

·         WEF reports place Singapore at the 2nd best position, in terms of labor-employer relations and highly productive workforce in the world.

·         In conformity with the IMD’s ‘World Competitiveness Yearbook 2017’, Singapore holds the 2nd rank for business-friendly labor rules.



Better Quality of Life

·         Lately, Singapore has been a chartbuster in various polls, determining the quality of life and placing itself as Asia’s top business terminus for foreigners.

·         Singapore offers the ‘Best Quality of Life’ for Asian expats, as reported by the ECA International’s ‘2019 Location Rating System’.

·         Gallup’s ‘2016 Potential Net Migration Index’ described the city-state as the most appealing nation for immigrants.

·         Mercer Human Resource Consulting’s ‘2018 Quality of Living Survey’ credits Singapore with ‘The best Quality of Life in Asia.’

·         As specified in the ‘2018 IMD World Competitiveness Yearbook’, foreigners consider Singapore as the world’s 3rd best work destination.

·         HSBC’s ‘Expat Explorer Survey 2018, positions Singapore at the 2nd spot.



Conclusion

A vibrant business environment is vital for starting and growing a business. While making the choice of a location for conducting business activities, one should be cautious in evaluating whether the country has the capability to put up with any unavoidable internal or external economic crisis that can emerge and slacken its growth.

Doing business in Singapore is lucrative for large multi-nationals, as well as small start-ups. Singapore’s flourishing business environment is also galvanized by a government that empowers its local and foreign entrepreneurs by simplifying provisions, improving business and industry policies and boosting innovative endeavors.

Forging ahead, Singapore is consistently trying to put in place more initiatives that will add to its status of ‘dream business destination’. The country is all set for large-scale investment into the nonstop success of its business infrastructure.

Come 2019 and Singapore is still every entrepreneur’s favorite place in Asia and the world over, when it comes to doing business and a lot more.

 

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Ship registration procedure and shipping industry in Singapore

The Singapore Registry of Ships makes it easy and fast for you to register your ship in Singapore. Once all relevant documents have been submitted, ship registration will be completed within two hours, and there will be various benefits if registered as a Singapore ship. Relevant Act ∙ Regulation - Merchant Shipping Act - Merchant Shipping (Registration of Ships) 1996 Procedure for ship registration Step 1. Check eligibility for ship registration in Singapore Step 2. Prepare application form -       Approval for vessel's name -       Apply for vessel’s official number and call sign / signal letters Step 3. Submit the relevant documents for provisional or permanent registration Step 4. Pay the initial registration fee and annual tonnage tax Step 5. Vessel Registered Prerequisites for registration Owner Only the following persons may be registered as owners of Singapore vessels: 1. Citizens / Permanent Residents (PRs) of Singapore 2. Companies incorporated in Singapore A vessel may be registered under the ownership of a foreign, or a locally owned, Singapore incorporated company 1) A foreign owned company is a company incorporated in Singapore in which more than 50% of its equity is owned by non-citizens of Singapore 2) A local owned company is a company incorporated in Singapore in which more than 50% of its equity is owned by citizens of Singapore, or by another local owned company Vessel Generally, ships less than 17 years would be considered for registration Provisional registration The Provisional Certificate is valid for a maximum period of one year with no possibility of extension. The vessel must be transferred to the permanent register before the end of this period. Documents to be submitted for Provisional Registration: -       Application Form -       Business Profile reported to Accounting and Corporate Regulatory Authority (ACRA) Appointment of A Manager Owners must appoint a manager whose residence is in Singapore. All communications relating to the vessel will be directed to the manager. The manager will be responsible for the operations of the vessel for all matters related to the crew, safety and prevention of pollution. ∙ An individual owner may appoint himself as the manager. ∙ A corporate owner may appoint a person in the company to be the vessel’s manager. ∙ If a company is appointed as the vessel’s manager instead, the name of the person in the company with the ultimate responsibility for the vessel and his status in the company must be clearly indicated. If there is any change in the manager, the owner must complete a new appointment of manager form and submit it to the Registrar within 7 days of the change.   Evidence of Ownership - (New vessel) A copy of the Builder’s Certificate - (Existing vessel) A copy of the Bill of Sale or the transcript of its former registry, or any other similar document that can demonstrate its ownership   Value of the Vessel The owner must declare the value of the vessel in Singapore dollars under the company’s letterhead if this is not already reflected in the other documents submitted (i.e. Bill of Sale).   Tonnage Certificate All vessels must have their tonnages determined in accordance with the provisions of the Merchant Shipping (Tonnage) Regulations (which gives effect to the International Convention on Tonnage Measurement of Ships, 1969 (TM 69)). A tonnage certificate may be issued by the MPA’s Shipping Division or any of the classification societies authorized by the MPA (Maritime and Port Authority of Singapore) to do so.   Class Certificate Class certificate may be accepted as evidence of seaworthiness. - (New vessel) Interim class certificate or Statement of entry - (Existing vessel) Statement of class maintained Tax benefits of SRS (Singapore Registry of Ships) To encourage companies to develop businesses in Singapore, ship registry offers benefits to Singapore-registered vessels. Withholding Tax (WHT) Exemption To further promote the growth of the maritime sector, qualifying shipping enterprises will enjoy automatic WHT exemption on interest and related payments made in respect of arrangements obtained to finance the purchase or construction of vessels, or the purchase of containers and intermodal equipment. Tax exemption Profits derived from the operation of a Singapore vessel are exempt from Singapore income tax.   Singapore shipping industry Singapore registry of ships Source: MPA (Maritime and Port Authority of Singapore) BY NUMBER BY '000 GT 2008 3,843 43,702 2009 3,950 45,632 2010 3,978 48,783 2011 4,111 57,360 2012 4,232 65,018 2013 4,379 73,615 2014 4,595 82,249 2015 4,739 86,300 2016 4,717 88,023 2017 4,578 88,808 2018 4,456 90,944 2019 Jan 4,468 92,133 Feb 4,469 92,486 Mar 4,472 93,075 Apr 4,471 93,926 May 4,465 95,411 Jun 4,460 95,808 Jul 4,461 96,234 Aug 4,447 96,116 Sep 4,446 96,885 Oct 4,463 97,736     Vessel Arrivals Source: MPA (Maritime and Port Authority of Singapore) BY NUMBER BY '000 GT 2008 131,695 1,621,065 2009 130,575 1,784,669 2010 127,299 1,919,408 2011 127,998 2,120,282 2012 130,422 2,254,353 2013 139,417 2,326,121 2014 134,883 2,371,107 2015 132,922 2,504,155 2016 138,998 2,662,695 2017 145,147 2,799,585 2018 140,768 2,791,966 2019 Jan 11,678 248,250 Feb 10,275 214,560 Mar 11,509 229,405 Apr 11,243 226,032 May 11,697 235,454 Jun 11,138 227,457 Jul 11,554 238,851 Aug 11,739 236,774 Sep 11,547 244,462 Oct 12,026 250,282     ▶ The largest container ports worldwide in 2018, based on throughput (in million TEUs)   Largest container ports worldwide - by volume of cargo handled 2018 The port of Shanghai was the largest container port in 2018, handling containers with a capacity of 42 million Twenty-foot Equivalent Units (TEU). In 2018, nine out of the ten busiest container ports were located in Asia. The world's largest container ports The busiest container ports in Asia include Shanghai, Singapore, and Hong Kong. In the United States, the neighboring ports of Los Angeles and Long Beach form the largest container hub in the country. The cities of Rotterdam, Hamburg, and Antwerp are home to the largest ports in Europe. The world's largest container terminals Singapore’s PSA International is ranked among the world’s leading marine terminal operators, followed by Hutchison Port Holdings, which is headquartered in the British Virgin Islands. PSA International operates several ports around the world, generating about four billion Singapore dollars in revenue in 2018. If you have any questions about Singapore company incorporation and investment, please contact us via Contact Us page. We will provide you with a variety of solutions for efficient business operations as well as practical advice on legal requirements. 

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All About Employment Pass in Singapore 2020

The Employment Pass (EP) is a work permit scheme aimed at skilled overseas employees with professional expertise, managers, and company directors who want to work and live in Singapore. This article spreads out specific information on the EP, including the overall perspective, criteria to apply for employment pass and registering a company and applying for an employment pass. Employment Pass – The Overall Perspective The Employment Pass (EP) is meant for expats who work as officers, managers and qualified experts in Singapore. First-ever applicants may get an EP for the first two years, following which it can get a renewal for a maximum of three years at one go. The EP is assigned to persons having employment offers, inclusive of a monthly salary of at least SG$3,600 (US$2.629). Aspirants with higher experience are offered more salaries so that they are eligible for this work visa. Nominees that have been offered a salary of SG$6,000 (US$4,383) or more per month, qualify to apply for a dependent’s pass for their legitimate spouse and unmarried children below the age of 21 years to be with them in Singapore. Applicants keen on bringing their parents, common-law spouse, or stepchildren should file an application for the Long Term Visit Pass (LTVP).The requirements are similar to those for dependent’s pass, nevertheless, only those with a minimum fixed monthly salary of S$12,000 (US$8,768) are eligible to get their parents into the country.  No foreign employee tax or quota is allowed for this particular work permit. Additionally, it takes a maximum of 5 weeks to process EP applications. This process takes three weeks if done online. Conditions to Apply for Employment Pass Employment Pass in Singapore - Eligible or Not You qualify to file an application for an Employment Pass for Singapore, provided you fulfil all the conditions given below: You will work as a manager, an executive or a professional. You will fulfil the least Employment Pass salary conditions: If your work experience is less or you are a fresh graduate, your salary must be at least S$3,600. If you are older and more experienced, the EP lowest monthly salary benchmark will be higher. It is compulsory to be sufficiently qualified, such as having a university diploma, special competencies, or specialized skills. The Ministry of Manpower takes a call on whether an applicant fulfils the conditions of a Singapore Employment Pass. There are no approved institutes where you can take up work. Rather, the MOM considers other standards to determine your eligibility to get the EP, for instance, your employer’s ratings and labor standards, or your own requisite skills. If you are considering applying for the EP, you may undertake an assessment test the Self-Assessment Tool (SAT) on MOM’s website for determining whether you qualify or not. Fill in your details, your employment track record, education, and your prospective salary. The tool will let you know if you fulfil the requirements for the Employment Pass or any other pass. Documents Required for the Employment Pass While applying for a Singapore Employment Pass, the following supporting documents are a must: Filled Application Form for Employment Pass that can be downloaded from the MOM’s website. It must have yours (the foreign employee) and your employer’s (or an authorized person from the company) signatures. It must have the hiring company’s stamp. Photocopy of your passport’s personal information page and the issue/expiry date. Your academic certifications, like diplomas and degree qualifications. Corroboration for your academic certifications and paperwork, available at Dataflow or other worldwide verification authorities. At times, a notary certificate is not sufficient. If you are a Chinese citizen, a verification from China Higher Education Student Information and Career Center or China Academic Degrees & Graduate Education Information will suffice. The latest resume. Fresh passport-size photograph, according to the Singapore photo criterion. Copy of your prospective employer’s business profile. A narrative of your job responsibilities/duties. Letter of Support or Registration from a Registration Agency, Professional Body, or Accreditation Agency. On the basis of occupation, these letters of support can be availed from the following professional associations: Singapore Medical Council (Doctors) Singapore Dental Council (Dentists) Allied Health Professions Council (Diagnostic radiographers, Occupational therapists, Physiotherapists, Radiation therapists, Speech therapist) Singapore Nursing Board (Nurses) Singapore Pharmacy Council (Pharmacists) Traditional Chinese Medicine Practitioners Board (TCM Practitioners) Legal Services Regulatory Authority (Lawyers) Sport Singapore (Football player or coach) For the staff members of an eatery setup: A copy of the license from the Singapore Food Agency (SFA). Additional Documents Required In addition to the already mentioned documents, when you apply to get your Employment Pass issued, you will need to present: Your passport details. Details about your Short-Term Visit Pass or immigration pass. Your address of residence in Singapore. Your Embarkation/Disembarkation Card. If required: A medical examination form or a health declaration form. (As mentioned in the IPA letter, you will require a medical checkup. This must be done in Singapore.) Your IPA letter. Remember that those who process your application have the right to ask for further papers after they have the application. Documents in a language other than English are required to be translated into English. A scheme for registering a company and applying for employment pass Company Establishment + Employment Pass Application Service In the case of foreigner business professional inclined to start a company and move to Singapore to manage its operations, the following criteria need to be met: 1.      Incorporation of a Singapore company 2.      Acquiring a Singapore Employment Pass work visa Singapore Company Setup Requirements ·         A local registered office address ·         1 resident director ·         At least 1 shareholder ·         1 company secretary ·         A paid-up capital of at least S$1 In the case of foreigner business professional inclined to start a company and move to Singapore to manage its operations, the following criteria need to be met: 1.      Pearson & Partners can help you set up your Singapore company and we can help you hire a resident nominee director as a provisional solution, till you get your Employment Pass 2.      Submit your Employment Pass application 3.      Transfer the directorship after receiving your Employment Pass 4.      Move to Singapore and initiate your business Conclusion So essentially, the Employment Pass (EP) is a primary form of work visa that the Singapore government has for qualified professionals, executives, managers, owners and directors keen on taking up specialty positions in Singapore. We are a registered filing agent who provides custom-build solutions to new businesses in Singapore. If you are employing foreign workers and if you have questions regarding Singapore work visa, contact us for further info. We can help you with all company registration issues, in addition to applying for a work pass without you being physically present in Singapore.

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Fintech Guidelines in Singapore: Regulations, Compliance and Sandbox

For fintech companies to get to work in Singapore, it important to be in line with the financial services-based rules, along with Singapore’s corporate laws. This article presents an outline of the regulations, compliance issues and sandbox guidelines, directly related to Fintech companies in Singapore. Fintech Regulations The ecosystem in Singapore provides all the support to businesses. The main controller for the majority of fintech enterprises is the MAS. Fintech businesses may come under the ruling of one or more of the following statutory provisions: ·         Commodity Trading Act ·         Moneylenders Act ·         Trust Companies Act ·         Insurance Act ·         Securities and Futures Act ·         Finance Companies Act ·         Banking Act; ·         Financial Advisers Act; ·         Companies Act; ·         Business Trusts Act; ·         Payment Services Act (PSA) substitutes the Payment Systems (Oversight) Act and the Money-Changing and Remittance Businesses Act The new PSA aims to create provisions for a better-suited atmosphere for innovation in financial settlements and also ensure the reduction of risks throughout the payments value chain. Controlled financial settlements comprise cash transfers, issue of digital money and payment tokens. Key Compliance Issues Largely, Fintech entities must think through these key regulatory compliance issues: ·         Consequences of financing (for instance, venture capital investments transformed into Fintech entities). ·         Copyright issues (for instance, administration and protection of intellectual property). ·         Financial regulatory and compliance (for instance, the kind of license required from the concerned agency or licensing reliefs that apply to a Fintech product or service). ·         Data security (for instance, the conditions enforced on Fintech enterprises, concerning personal client information that they deal with. Additionally, Singapore also has a general data protection scheme, framed by the Personal Data Protection Act 2012). ·         Consumer/technology agreements (for instance, software licensing contracts or terms of use of the Fintech product or service that cover matters of consumer protection). Also, the Cybersecurity Act 2018, is aimed at governing systems that provide basic services in Singapore. The MAS Fintech Regulatory Sandbox is a distinctive licensing system designed for Fintech entities. For a Fintech product or service to function in the Regulatory Sandbox, the MAS supplies the required regulatory support by reducing specific legal and regulatory necessities for the period of the Regulatory Sandbox. A Fintech company that applies for entry into the Regulatory Sandbox, must know about its lack of compliance with specific statutory and legal provisions while presenting the Regulatory Sandbox application. It must ensure that a plan exists for fulfilling these conditions. By and large, the Regulatory Sandbox will cease operations, if the Fintech company lacks compliance with the concerned statutory and legal standards by the close of the Regulatory Sandbox timeline.   Fintech Regulatory Sandbox Guiding Principles To convert Singapore into a smart financial center, the Monetary Authority of Singapore (MAS), lately came out with the Fintech Regulatory Sandbox Guidelines. Earlier, a consultation paper was published by MAS. This paper was to simplify the legal provisions required by Fintech companies while testing innovative financial products and services regulated by the MAS. Based on the public discussion, the MAS has issued the final legal set of rules. These rules ease governing and legal obligations due to Fintech participants wanting to test and enforce innovative financial services in Singapore. The Regulatory Sandbox As explained by Ms Jacqueline Loh, the Deputy Managing Director of MAS, “The regulatory sandbox offers a favorable atmosphere for supervisory requirements to be business-friendly, enabling them to test budding innovations within the legal provisions.” This method is advantageous because FIs and startups are not required to surrender up-and-coming innovations just because they are not aware of its compliance with the statutory and legal criteria. The MAS’s directives list the main steps right from applying for the sandbox till its operation. Easing Regulatory Criteria According to the MAS, it will ease the legal criteria for applicants who succeed to the Sandbox. The directives underline the regulatory requirements that MAS may ease. These comprise: 1.      Creditworthiness 2.      Fund credibility and capital sufficiency; 3.      Cash equilibrium. 4.      License Fee; 5.      Asset maintenance obligation; 6.      Board constitution; Main Stages of the Sandbox 1.      Application Stage The applicant presents the sandbox application to the MAS that checks the application and lets the applicant know the decision within 21 days. 2.      Evaluation Stage If the applicant is practically right for the sandbox, the MAS will evaluate the application. After assessing it, the MAS will advise in writing to the applicant, to go ahead with the sandbox, or drop the idea. 3.      Experimentation Stage After approval of the application, the sandbox is sent for the experiment, where the sandbox entity should apprise its customers about the financial service it operates sandbox and also about the corresponding risks. The entity must get a confirmation from the customers that they are clear about all risks. Evaluation Criteria The evaluation criteria in the guidelines to be filled by the applicant are: 1.      The projected financial facilities use innovative technology, a rising technology or any prevailing technology differently; 2.      The projected financial service focuses on specific matters or benefits consumers or the domain; 3.      Once an applicant leaves sandbox, the intention is to expand the proposed financial service in Singapore; 4.      The experiments and intended results of the sandbox tests must be well-defined, and the sandbox entity must update on the developments to the MAS consistently; 5.      The corresponding limitations should be precisely stated; 6.      The applicant must identify and eliminate the serious threats owing to the projected financial service 7.      A satisfactory exit and changeover plan must be clear, in case the projected financial service is to be stopped. Promising Clarity, Flexibility & Transparency As per the MAS statement, the regulatory sandbox instructions will accomplish: 1.      Better Transparency – The instructions cover examples and details specifying MAS’ expectations, like the criteria for accessing entry into the sandbox; 2.      Increased Flexibility – The instructions cover higher flexibility and making the evaluation criteria easy for businesses keen on entering the sandbox. It also facilitates modifications while experimenting. Conclusion Despite the fact that Singapore lacks fintech-focused regulations, fintech firms are required to comply with the running laws that govern the financial services industry. These comprise ensuring the appropriate licensing, keeping personal data requirements updated, according to the Personal Data Protection Act and complying with AML/CFT notices. It is important to know that fintech is always going through innovations. Singapore lawmakers are always coming up with new ways to secure firms and consumers. Aspirants must always be updated with the latest compliance regulations as this new industry is always on the move. We would love if you get in touch with us to know everything about the Fintech domain in Singapore.

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