SG Company Incorporation: Guide to Know Your Customers (KYC) Regulations
Since company incorporation and registration in Singapore are convenient, there have been increasing cases of money laundering and financing terrorism. Some investors establish unusual business structures while shareholders conceal their transactions.
That is why The Accounting and Corporate Regulatory Authority (ACRA), together with an international governing body called the Financial Action Task Force (FATF), issued a series of regulations to combat the issue. The objectives of this framework are to raise standards professionally and defend the financial system from ill-usage.
KYC Initial Requirements
Anyone intending to incorporate a company in Singapore must comply with the Know Your Customer (KYC) regulations to ensure that your identity is legit and transparent. Before the screening process, companies should provide the following:
- Identification proof (Valid IDs, Residence, Date of Birth, Nationality of shareholders and members of the beneficial owners)
- Copy Board of Directors’ resolution
- Business profile copy
- Copy of the company’s Memorandum and Articles of Association
The corporate service provider would evaluate and identify your customers. They would check your background and recent transactions if:
- Hassle-free contact with existing clients
- Politically Exposed Persons (PEP) clients
- Unusual or complex company structure
- The clients tolerate unusual transactions.
- Avoidance with meetings
- If the capital is going in and out of the company’s records
Regular Monitoring and Record-Keeping
Once the requirements and essential documents are verified, corporate service providers should monitor the customer’s transactions. This includes the evaluation of business history and risk profile if necessary. Agencies would observe the highest form of risks.
In line with the monitoring, copies of information and supporting documents about the client identities shall be kept—including the term of the business relation, at least five years from the ceasing date.
Penalties for Non-compliance
The ACRA has the right to investigate a company if it failed to fulfil the KYC regulations, and the agency identifies a suspected break in the process. If specified for non-compliance, the corporate service provider would face penalties and cannot perform services. Moreover, the business establishment is heavily affected. This includes:
- Cancellation or suspension of the company registration with ACRA.
- Denial of access with ACRA’s Bizfile business interface.
- The imposition of financial fines.
- Disruption of business operations.
Since KYC regulations in Singapore companies tackle illegal business transactions and non-compliance to the constitution, here are some laws related to the subject. Individuals or investors found guilty would receive the consequences of the following regulations. The penalty and specifications may vary on the pieces of evidence gathered.
- The ACRA Act and Singapore Company Constitution.
- The Corruption, Drug Trafficking, and Serious Crimes Act.
- The Terrorism Act.
- Other legislation related to arrest of money laundering or funding of terrorism.
Incorporate Your Business in Singapore
Despite being globally known as the leading destination for business establishments and corporations, Singapore has to deal with insulting owners and opportunists of its company constitution. Fortunately, organizations and government bodies impose enhanced frameworks to ensure the identities of the investors.
Therefore, business people should choose their corporate service providers thoroughly. It would be most successful in being led by the premier provider of business services if you want a company incorporate in Singapore. Moreover, 3E’s Accounting is a team of qualified professionals that would ensure your establishment’s transparency and proper compliance. The team would take care of your company’s registration and the post-establishment process.