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Singapore company audit, financial statements, accounting, consulting in Singapore

Singapore is a city-state in Southeast Asia, an island in the Indian Ocean and the world’s financial centre. Singapore has a developed economy, high technology and an absence of corruption. It attracts foreign investors with its tax incentives, advanced government services and document management system, and its ability to access Asian markets. A private limited company is the most suitable legal form of doing business in Singapore: such companies can get an exemption from the mandatory annual audit if certain conditions are met.

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Service packages Legislation Tax System Audit Services
Preparation and submission of dormant accounts (for a dormant company)
1650 EUR
Preparation and submission of dormant accounts (for a dormant company)

(Min – EUR 2 090)

EUR 100-400 per hour
Company's audit by a Singapore auditor

(Min – 10 000 EUR)

EUR 100-400 per hour
Consulting services and support during tax audits
EUR 100-400 per hour
Liquidation of a company
from 1 500 EUR

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General requirements

Each Singaporean company must comply with the following requirements of the legislation:

file an annual return(AR) and annual financial statements with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore;

hold an annual general meeting of shareholders;

file an annual tax return with the Inland Revenue Authority of Singapore (IRAS).

Since not all jurisdictions have an analog to annual return, we consider it necessary to clarify this term. Annual return (AR) is a short report on the current structure of the company that is prepared by the company’s secretary annually. Normally, it includes:

  • Identification data (date of incorporation, registered address);
  • information on directors and their resignations;
  • information on secretaries and their resignations;
  • information on the authorized capital, par value of shares, number of issued shares;
  • information on shareholders and transfer of shares.

In Singapore, an annual return shall be signed by director and secretary within 1 month of the date of the annual general meeting. The return contains data of the company’s activity and structure; the company’s financial statements shall be filed along with the annual return.

Directors must present at annual general meeting financial statements prepared in accordance with the Singapore Financial Reporting Standards and the Singapore Financial Reporting Standards for SME issued by the Accounting Standards Council.

Financial statements must give truthful and objective representation of the company’s financial position and results of its activity. Financial statements consist of:

  1. statement of comprehensive income;
  2. statement of financial position;
  3. statement of changes in equity;
  4. statement of cash flows;
  5. notes containing the main principles of the accounting policy and other explanatory information.

The following types of legal entities must file financial statements:

  • sole proprietorship;
  • partnership;
  • limited liability partnership;
  • limited partnership;
  • private limited company;
  • exempt private company;
  • public company limited by shares;
  • public company limited by guarantee;
  • branch;
  • representative office.

A dormant company can be exempt from filing financial statements. Dormant company is a company that does not conduct activity and whose total assets do not exceed 500 000 SGD (Singaporean dollars) and it is not a listed company or a subsidiary of a listed company.

Transactions that do not affect the dormant status of a company:

  • appointment of company secretary;
  • appointment of auditor;
  • maintenance of registered office;
  • keeping registers and books;
  • payment of duties to the Registrar or any fine or penalty to the Accounting and Corporate Regulatory Authority (ACRA) of Singapore;
  • purchase of the company’s shares by the subscriber to the Articles of Association (company’s shareholder) in accordance with the obligation stated in the Articles of Association.

IRAS can exempt a company from filing a tax return if:

  • the company’s estimated chargeable income (ECI) equals zero;
  • the company’s annual income does not exceed 1,000,000 SGD.

Audit of accounts

The following companies can be exempt from obligatory audit:

  • dormant company;
  • exempt private company;
  • small company

Criteria of a dormant company are described above.

A private limited company can acquire the exempt status. Such a company is exempt from obligatory audit and from filing audited financial statements with ACRA. An exempt company, however, shall file an annual return and tax return with IRAS. The company shall be exempt when two conditions are met:

  1. the company does not have more than 20 shareholders; all shareholders are individuals;
  2. the company’s turnover does not exceed 5,000,000 SGD.

Companies that comply with any two of the below requirements during the last two financial years are considered small companies:

  • total annual income does not exceed 10,000,000 SGD;
  • total assets do not exceed 10,000,000 SGD;
  • it has 50 employees at most.

Time frame for preparation and submission of financial statements

In accordance with section 175 of the Companies Act, companies must hold their first annual general meeting of shareholders:

  • for listed companies: within 4 months after the date of the end of the reporting period;
  • for other companies: within 6 months.

Financial reporting date can be changed once in 5 years.

As mentioned before, each Singaporean company must file an annual return and financial statements with ACRA within 1 month after annual general meeting of shareholders. Information on the company’s officers, registered address and auditors must be included in the annual return.

If a company receives income exceeding 500,000 SGD, it must also provide its account statements enclosed with the tax return.

Each Singaporean company must file an annual tax return with IRAS before 30 November. Profit for the financial year that ended in the previous year will be the basis for filing a tax return in the current year. Moreover, companies are also required to file a statement of estimated chargeable income (ECI) 3 months before the end of the reporting period.

A VAT report shall be filed quarterly.

Liability for late submission of accounts

За несвоевременную подачу финансовой отчетности в Управление бухгалтерского учета и корпоративного регулирования Сингапура (ACRA) на компанию будет наложен штраф в размере:

In the case of late submission of financial statements to ACRA, the company will be imposed with a fine of:

  • 300 SGD if accounts are filed within 3 months after the date set for filing, or
  • 600 SGD if accounts are filed within more than 3 months after the date set for filing.

In the case of late tax reporting IRAS can issue a notice containing assessment of the tax that the company must pay within 1 month, and then, in the case of failure to fulfil obligations, summon to court those responsible for management of the company (including directors).

If a company does not file accounts with IRAS within two years, by court decision the company can be imposed with a penalty:

  • 2 times the amount of the tax charged; and
  • a fine not exceeding 5,000 SGD.

Failure to pay this penalty may result in imprisonment for a term of up to 6 months.

Consolidated financial statements

If a company is part of a group, the company will be assessed on a consolidated basis.

According to the provisions of FRS-110 (Consolidated Financial Statements SB-FRS 110), if a company controls one or more companies, consolidated financial statements must be prepared for the group of companies.

A group company will be exempt from annual audit of its accounts if the holding company and all subsidiaries meet the criteria for a small group, i.e. they meet at least two of the below conditions during the last two financial years:

  • consolidated income must not exceed 10,000,000 SGD;
  • consolidated total assets must not exceed 10,000,000 SGD;
  • total number of employees of the group must not exceed 50.
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