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03 AUG 2019

Company Registration in Singapore for Entrepreneurs 2019

Singapore is one of the most happening global business centers – and just the perfect country for a foreigner to set up a business. For the registration of a company in Singapore, there are a number of essential legal processes and documents that are to be completed. For this, there are also legal formalities that need to be fulfilled by all Singapore-registered incorporation service providers (also called filing agents) to carry out KYC (know-your-client) due diligence.


Though generally you are not required to be physically present in Singapore for registering a Singapore company, however, there may be exceptions when an additional inquiry is required. It is best to seek help from a team of professionals who can guide you through the entire process, ensuring completion in the most professional, convenient manner.


The process of Singapore company incorporation involves two key participants. A shareholder and a Director. Shareholders, one or more, hold ownership rights of the company. Anything that belongs to the company – its assets, money, stock and the profit from its business, eventually belongs to its shareholders.


Director is similar to a manager of the company, who is the decision-maker. At the same time, the director is responsible for everything that happens in the company (to be more specific, responsibility for the company’s activities/operations/decisions/results does not lie with the shareholder). However, the in majority of the cases, the director and the shareholder are one and the same.


Any person (more than 18 years old), or a company, or any other commercial entity (For instance, a firm or a trust) can set up and run a company in Singapore provided that it is in compliance with the Singapore law. The individual can either become a foreign director of the company and at the same time, can also be a shareholder in the same company.


For company incorporation in Singapore, one does not have to be a Singapore resident and neither does one have to be specially qualified. The only thing that matters is a clean track record that is free from any scam or illegal activity and that the concerned entrepreneur should not be a reinstated bankrupt.


Similar to a person, any foreign corporate body or business entity is also allowed to subscribe to shares in the Singapore Company and add in the same. To put it across simply, anyone can incorporate a company in Singapore, as long as they are in compliance with the above-mentioned conditions. Furthermore, it’s a point to be emphasized that the Singapore companies Act has provisions to make foreigners 100% of owners of companies.


Consequently, all the assets and profits that come from the business will be completely owned by a foreign individual or entity. Neither any particular qualifications nor visas are needed for the registration of a company in Singapore.


Singapore Company Registration, Singapore Company Incorporation


Requirements for Registration of a Company in Singapore

If you are a foreigner looking to incorporate a company in Singapore, you will be glad you noted the following points:


Fundamental Provisions

Director

A director manages the company. A director (or a board of directors) supervises the activities of the company. All Singapore-based companies are required to have at least one director who must be a citizen of Singapore or a permanent resident of Singapore or an employment pass holder.

Foreign citizens can be hired as foreign directors along with the local director. Any person aged 18 years or more is eligible to be a director. However, a bankrupt who has not been discharged or an individual convicted of any misconduct is not allowed to be a director.


Singapore Company Secretary

Every Singapore Company must have a secretary, who must be an individual and a Singapore resident. The secretary looks after the administration of the company and manages all compliance-related issues. The company secretary is required to maintain all the registers, resolutions, minute books of the firm. The company secretary is a senior-level legal post and should not be mistaken for the commonly described subordinate assistant positions.


Shareholder

For company incorporation in Singapore, at least one shareholder is required. A shareholder can either be a person, or a business entity. Shareholders are equivalent to owners of the company. They may be or may not be directly involved in the daily operations of the company. In conformity with the Singapore Companies Act, a company can have foreigners as all its shareholders. Majority of the small limited liability partnerships have the same person as the shareholder, as well as the director.

Since shareholders are also owners of the company, shareholding is not affected by hiring a nominee Director. The shareholder still remains to be the owner of the company.


Capital Stock

Share capital must at least be $1, but as a matter of fact, the share capital will be according to the type of business and its long-term plans.


Registered Domestic Address

A local Singapore address is to be provided for registering a Singapore company and most importantly, this address cannot be a PO Box.


Consider this for Company Incorporation in Singapore

· To begin with, it is essential for a foreigner to get an appropriate work visa/pass similar to an Employment Pass (EP) or EntrePass. These passes will make it possible for you to work/set up a business in Singapore.

· Over and above that the EntrePass holder can choose to function within the capacity of the local director of a Singapore-based business (which is an important prerequisite of Singapore company incorporation).

· An individual above 18 years of age is eligible to register a company in Singapore, as long as he has no past record of being sentenced for any legal violation or being bankrupt.

· The whole procedure of Singapore company incorporation is electronic in nature which is carried out via this very online filing system only.

· This is the reason that it is recommended for foreigners to hire the services of a Singapore company incorporation company that can put forward the application on their behalf. They have the experienced incorporation experts who can confidently provide all-inclusive solutions to foreigners on company incorporation in Singapore.

· If the foreigner is keen on running a business in Singapore without moving his residence there, he does not need to acquire an EP or EntrePass. Despite that, he can hire a local nominee director to meet the compliance conditions of Company registration in Singapore.



Which is Your Kind of Business Structure?

a) Sole-Proprietorship

If you would like your business structure to be a sole-proprietorship in Singapore you would require a designated official (who is an original resident of Singapore, (i.e., Singapore citizen, Permanent Resident or EntrePass holder) even though your resident is outside of Singapore. If you wish to make Singapore your domicile and also run your business there, an EntrePass is one of the things that you would require to configure your sole-proprietorship.


b) Partnership

Apart from sole-proprietorships, you also have the choice to do business in the form of a partnership in Singapore. The prerequisite for this type of a business entity is that one of your partners should be an ordinary resident of Singapore. Just like sole-proprietorships, there has to be an authorized representative (an original Singapore resident, i.e., Singapore citizens, Permanent Residents and EntrePass holders) at the same time as you live outside of Singapore. However, if you are keen to live as well as do business in Singapore, you will need an EntrePass as one of the provisions to register your business.


c) Subsidiary

One of the most popular type of business configurations for foreign entity is a subsidiary company. In Singapore, a subsidiary company falls within the category of a limited liability company, in a manner that its foreign parent company can own 100% of its shares. A subsidiary company is a different entity from its foreign parent company.


d) Branch Office

A branch office has formal legal status after it has been registered, where generally a branch is an extension of its parent company. It is mandatory for a branch office to appoint at least one Singapore resident as its employee. Nevertheless, a branch office is linked to its parent company (unlike a subsidiary company) such that all its debts and liabilities are billed to the parent company.


e) Representative Office

True to its name, a representative office is set up only with the aim to conduct market and feasibility research without allowing profit-making business activities.
Additionally, a representative office has not a separate legal identity apart from its foreign parent company and it can only employ five employees.



You ‘Must’ do this to Incorporate a Company in Singapore

To make incorporation of a company in Singapore as easy as can be for foreigners, here is what they must do:


Hire the Specialists

It is not possible for foreigners to register a company entirely on their own in Singapore. They must take the services of a professional firm to help them submit documents and complete all the formalities related to the incorporation process.


Not Worry about a Special Visa

This is what you do not need for the purpose of incorporation; a special visa. A visitor visa to Singapore will be sufficient for you to complete the formalities. Besides, once the company has been incorporated, the visitor visa can also be used to visit Singapore for short term business trips.


Get an Singapore Employment Pass

To be able to work for your Singapore Company on a permanent basis, an employment pass becomes most important. The consultant company that you may hire to help you set up your business in Singapore would step in to help you file your application for the employment pass, corresponding to the new company.


Physical Workplace

In the case of the majority of businesses, there are no stringent norms to have a physical workplace for your Singapore Company. A company can operate through a virtual address.


Know that it is not required to hire employees

There is no compulsion to hire employees for a Singapore company. It can have all its operations controlled from overseas.


The Essentials

· If you are keen on expanding your already running business, you can establish a Branch Office of the holding company. In order to get this done, it is best to take the help of an incorporation consultant for direction and advisory service.

· You can get in touch with the Economic Development Board (EDB) to get a lucrative commercial space in Singapore. There, you may pick your choice from a variety of location options.

· Singapore government has a splendid range of cash allowance offerings aimed at providing financial support to start-ups. It is a good idea to get in touch with the different government agencies like Standards, Productivity and Innovation Board (SPRING) and International Enterprise Singapore (IE Singapore). The best part is that a foreigner can benefit from these schemes without any restrictions. This unfolds a window of opportunities for those wanting to know more about starting a business in Singapore and its advantages.

· According to the Fair Consideration Framework (FCF) of MOM, you have to hire a good number of local employees prior to taking foreign professionals on your company’s payroll. That is where online job portals step in as a source to look for aspirants or to announce available vacancies.

· During your stay in Singapore, it is mandatory to conform to the regulations of administrative authority. Also, stringent compliance with the laws of ACRA, MOM, IRAS (Inland Revenue Authority of Singapore) at all costs is applicable.


Pre Incorporation Requirements

· A minimum of 1 resident director

· A minimum of 1 shareholder

· A minimum of 1 company secretary

· At least $1 in the opening paid-up share capital

· Registered office address


Incorporation Documents for Foreigners

For a foreigner seeking company incorporation in Singapore, the following documents would be required to be submitted:

· Details about the business activity

· Memorandum and Articles of Association (M&AA)

· Copy of passport

· Address proof of residence outside Singapore, bank reference letter, personal and professional profile, Detailed information of directors, company secretary, and shareholders


What after Company Registration in Singapore?

Once you succeed in getting your company registered, you receive an email from ACRA. This email has all the applicable information about your company. The agent you hire can make this information available to you in the form of hard copies for a nominal fee. Prior to commencing with your business operations, you must do the following post-incorporation tasks:


· Acquire a numeric tax ID for your Singapore business

· Get a free GST business registration

· Open a corporate bank account

· Open Central Provident Fund (CPF) account and top it up

· Register for the Skills Development Levy (SDL) and pay the fees

· Hire an auditor in a time span of 3 months



Conclusion

Singapore tops the list of blue-ribbon financial hubs and also features as a well-known marketplace at a global level. In the World Bank’s report of 2019, Singapore is ranked 2nd among 190 economies of the world on the ease of doing business indicators. It is on the White List of OECD (Organization for Economic Co-operation and Development) that is seen as a see-through offshore jurisdiction.

It is no surprise that the foreign businesspeople are on the lookout for the simplest means to incorporate and run a business in Singapore. It is a goldmine of opportunities for the dedicated entrepreneur to make their dream a reality.

Singapore is attracting so much corporate interest for business incorporation. When setting up a company in Singapore, it is important that you engage the services of the correct team to assist you. In conclusion, foreigners are more than welcome to incorporate a company in Singapore.


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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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