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Beginner’s Guide on Starting a Fintech Business in Singapore

The FinTech business in Singapore is one of the many thriving sectors available for entrepreneurs. Recently, the Monetary Authority of Singapore (MAS) announced robust incentives for FinTech companies that include investments of up to S$225 mil (US$158 mil) by the end of 2020. MAS also plans to develop a FinTech Innovation Lab that will double as an innovation hub.

Entrepreneurs passionate about the Fintech business will find their calling right here in Singapore. Thus, starting a Fintech company is one of the options many investors have started to pursue. With company registration in Singapore being simple and the city-state being one of the best places in Asia to start a tech business, there has never been a better opportunity to launch your Fintech business. It also helps that the country’s banks and financial service providers welcome Fintech enablers.

There is a very good reason why the country is encouraging more entrepreneurs to pursue the Fintech industry. That is because Fintech will boost the accountability and the efficiency of the financial services sector. If this sounds like something you would like to pursue, this guide is for you.

Aimed to help local and foreign FinTech companies to set up their companies here in Singapore, the Singaporean government has established the FinTech Office in May 2016. The FinTech Office is a virtual entity consisting of many different government entities: the Monetary Authority of Singapore (MAS), Economic Development Board, Infocomm Media Development Authority and Enterprise Singapore. The FinTech Office acts as the one-stop office that advises FinTech companies on FinTech-related government grants and schemes as well as assists them to stay in compliance with the regulatory requirements.

 

What the Industry Practice Is Like

Fintech stands for “financial technology”. It is defined as technology incorporated in financial services. Fintech focuses on using technology in the design and delivery of financial services and products. One example of a company that was a pioneer at applying Fintech into its services is PayPal.

Some examples of Fintech include artificial intelligence, cryptocurrency, insurtech, robo-advisers, and mobile platforms for payment applications. This includes services like Apple Pay and Google Pay. The Fintech business in Singapore is subject to several regulations that are based on your business model and operations.

Why should you consider starting a Fintech business in Singapore? Because FinTech is reshaping the way financial service providers interact with their customers by putting technologies at the heart of the services. This is where the future is and it is important for all businesses to get on board if they don’t want to be left behind.

For more guidance, you can contact a corporate service provider.

 

The Business Registration Process

Now that you want to start a fintech company, the Singapore company incorporation is going to involve certain steps. Per Singapore law, your business name must be officially registered with the Accounting and Corporate Regulatory Authority (ACRA) Singapore. You will then need to file your documents with ACRA. You can do this with BizFile, ACRA’s online web portal. This makes the process much easier. You will also need to choose a company name and choose your business structure during this process.

As part of your documentation for the registration process, you need to prepare the details and particulars of the company’s directors and shareholders. If you are a foreign entrepreneur, you will need to submit a copy of your passport and your address as proof of residence. When you receive your certificate of incorporation, you need to register for the Goods and Services Tax (GST).

Our 3E Accounting specialists can help you with this. After that, it is time to prepare and draft your incorporation documents, detailing the nature of your business activities. If done correctly, your business registration process in Singapore should take no more than a day or two to be finalised.

 

What Licenses and Permits Do I Need to Start a Fintech Business?

The Fintech business in Singapore needs to abide by the local regulations set out by the authorities. If you run a Fintech business, you can expect to be governed by some of the following:

• The Banking Act –  This is applicable if you provide financial services online, for example accepting money transactions.
• Finance Companies Act – This is applicable to businesses that accept fixed and saving deposits and/or credit facilities.
• Money-Changing and Remittance Businesses Act  – This is applicable to businesses that trade foreign currency and/or handle outbound payments.
• Insurance Act – This is applicable to businesses that leverage insurance.
• Moneylenders Act – This is applicable to businesses to money lending businesses.
• Personal Data Protection Act – This is applicable to businesses that collect, use, and/or disclose the personal data of individuals in their operations.
• Payment Systems (Oversight) Act – This is applicable to businesses that offer stored value or prepaid wallet services.
• Financial Advisers Act – This is applicable to businesses that offer information on investment products, arrange life insurance products, and/or market collective investment schemes.
• Securities and Futures Act – This is applicable to businesses that trade certain instruments, and/or deals in securities or manage funds of a certain amount, amongst others

Other Requirements

In addition to all the above, you will also need to comply with the anti-money laundering and terrorism financing standards by the MAS. The licenses and permits that you need will be based on your business model and your operations too. Per the Finance Companies Act, you must apply for a single license in Singapore. There are two license options to choose from:

• Capital market services license
• Financial adviser license

Your license approval will be subject to MAS on a case-per-case basis. As your trusted corporate service provider, 3E Accounting can advise you about what license you need depending on the area of your business. We will help you ensure that your license application goes through without a hitch. For more information, contact us today.