Know Your Customer Regulations for Singapore Companies
In the year 2015, the ACRA (Accounting and Corporate Regulatory Authorities) developed regulations on corporate filings for corporate customers to ensure a healthy business environment. The CSPs (Corporate Service Providers) and other qualified individuals must now register with ACRA as filing agents.
According to Singaporean authorities, these regulations were put in place to keep financial terrorism and money laundering at bay, which has been a big challenge for many companies in the past. As of now, any company that is registering should comply with the set regulations, which include the Know Your Customer (KYC) regulations.
Why KYC Regulations Were Put in Place
As an excellent environment in which to do business, thousands of new companies are registered every year in Singapore. Before these regulations, rogue individuals and organizations would take advantage of the surge of new businesses to engage in financing terrorism. Surprisingly, some organizations would commit this crime without even knowing it due to their unregulated internal policies.
As a result, ACRA saw fit to start putting some tight measures in place. And this is when the KYC regulations were born. To obtain a KYC certificate, a company will need to produce identification for the directors with full names, the certificate of incorporation, the memorandum of understanding, resolutions, the company profile, and any other document that might be requested by the authorities.
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More About KYC Regulations
First, it is worth mentioning that all service providers serving local and foreign clients are eligible. The Visa Express experts have been advising clients seeking an EntrePass to prepare for these new regulations as soon as they register their companies. CSPs should help companies and organizations to file transactions as guided by ACRA.
With a CSP registered as a filing agent, it is given access to ACRA’s electronic platform. If a company cannot reach out to these agents, they can use qualified individuals as guided by the regulations.
Conducting a risk assessment is crucial in meeting the KYC regulations. As such, the CSP will assess the procedures involved during the transaction such as face-to-face transactions, the territory of operations, and the nature of trading among other things.
Another important thing is the creation of policies and recording them. These are called internal procedures that vary from one service provider to another. They are so detailed that they include specific steps that are defined after the risk assessment.
The Necessity of Due Diligence
ACRA is trusted to file transactions for new customers. They should not be hasty to jump to the conclusion that there is financial terrorism unless they have facts to support this. They can only raise an issue if the transactions are not following the set policies or if they cannot identify the customer using the required documents. The authorities will further carry out investigations on this and take the necessary actions.
ACRA has taken a big step in creating an environment that will help businesses to flourish in Singapore. From the above insights, it is clear that there were problems with money laundering, but now they have been addressed appropriately.