Introduction to Regulatory Compliance in Singapore
- What is Regulatory Compliance?
- Examples of regulatory compliance laws and regulations in Singapore:
- Why is regulatory compliance important?
- Typical Areas of Compliance Risk
- Benefits of regulatory compliance in Singapore
- What are challenges that come with regulatory compliance?
- How do companies in Singapore ensure regulatory compliance?
Singapore is a trusted business hub within the Southeast Asian region. This reputation is the result of thorough governmental measures and enforcement, to minimize the potential of illicit activities and abuses within corporate entities. Doing business in Singapore means having to comply with the myriad regulations. Here’s how it works.
What is Regulatory Compliance?
Regulatory compliance is an organization’s adherence to laws, regulations, guidelines and specifications relevant to its business processes. Violations of regulatory compliance often result in legal punishment, including governmental fines. In severe (and/or recalcitrant) cases of non-compliance, businesses will be ordered to cease.
Examples of regulatory compliance laws and regulations in Singapore:
- 2006 – Trust Companies Act
- 2012 – Personal Data Protection Act (PDPA)
- 2018 – Cybersecurity Act
- 2019 – Intellectual Property (Dispute Resolution) Act
- 2019 – Work Injury Compensation Act
Why is regulatory compliance important?
At the time of writing (1 June 2020), 536 Acts are currently in force within Singapore. It can be assumed that all aspects of business are governed. This led to the creation of corporate regulatory compliance officer positions. The primary job function of these roles is to ensure the organization conforms to stringent, complex legal mandates and applicable laws.
Typical Areas of Compliance Risk
Reporting & Taxation
Environmental, Health, and Safety
Companies must work to prevent bribery, embezzlement, insider-trading, and other improper business practices. Usually, this area of risk can be well-managed through proper bookkeeping and KYC/AML checks.
In Singapore, companies are obliged to file financial statements, liquidity data, and other reports to ACRA on an annual basis. (If you use our corporate secretary services, we’ll ensure that your annual filings are completed in a timely manner.)
Under PDPA, companies must try to keep customer and employee personal data secure, and disclose any breaches of privacy according to various deadlines. This is governed by Singapore’s Personal Data Protection Commission (PDPC).
Environmental, Health, and Safety
As with many other countries, companies operating in Singapore must obey rules for environmental pollution, worker safety, and related issues. The issues here fall within the purview of the National Environmental Agency (NEA) and the Ministry of Manpower (MOM).
Companies in Singapore must maintain ethical workplace practices, including wage issues, anti-discrimination, anti-harassment, and more. For example, the Fair Considerations Framework applies when hiring non-local talent.
When you conduct a compliance audit with us, we will cover all these areas of concern and assist you in managing the risks.
Benefits of regulatory compliance in Singapore
- Reduced legal risks and associated future costs
- Enjoy an unblemished reputation (Being seen as safe and trustworthy is positive PR)
- Enhanced relationships with regulators, stakeholders, and clients
- Improved talent attraction and retention
- Business continuity and peace of mind
Data privacy-specific regulations, such as PDPA and GDPR, have become essential as part of Singapore’s digitalisation. It is now necessary for companies to appoint DPOs, and take reasonable action to obtain client consent and protect their data. Data breaches that arise from negligence, can result in fines, client loss and negative impacts on a company’s bottom line. More on PDPA in Singapore here.
What are challenges that come with regulatory compliance?
There’s a perpetual balancing act between compliance and profitability.
Failure to follow mandatory regulatory guidelines may result in various repercussions, such as on-site compliance audits and inspections by regulatory agencies. This will disrupt normal business operations. Noncompliant organizations will also face monetary fines and penalties. Brand reputation can also be permanently damaged by repeated — or particularly glaring — compliance breaches.
Companies are required to spend capital in order to comply with compliance laws and regulations, while they try to appease stakeholders and maintain business processes by turning a profit. Yet, regulatory compliance can be costly from an infrastructure and personnel standpoint. Thus, the cost of hiring a full-time compliance officer can be out of reach for the average startup in Singapore.
These financial challenges surrounding compliance are also particularly acute in highly regulated industries, such as finance and healthcare. Other business strategy-associated challenges that come with maintaining regulatory compliance include the following:
- Determining how emerging regulations will influence business direction and existing business models
- Developing and promoting a culture of compliance throughout the organization
- Anticipating compliance trends and integrating regulatory processes to increase efficiency.
- Complications from evolving consumer technologies and its adoption
For example, the use of personal mobile devices in the workplace creates compliance concerns, because these devices may store sensitive, compliance-relevant company data. The blurring of work-life boundaries has led to a huge growth in the number interconnected devices. Combined with the lowered security in mobile and IoT devices, it all creates compliance vulnerabilities in organizations’ networks.
How do companies in Singapore ensure regulatory compliance?
Regulatory compliance requires companies to analyze their unique requirements and any mandates specific to their industry. They then develop processes to meet these requirements. Here are the typical steps to achieve regulatory compliance:
- Identify applicable regulations. Determine which laws and compliance regulations apply to the company’s industry and operations.
- Determine requirements.
Identify the requirements in each regulation that are relevant to the organization, and consider options to implement these mandates.
- Document compliance processes.
Clearly document existing compliance processes, with specific instructions for each role involved in maintaining compliance. This information will be useful during regulatory audits.
- Monitor changes, and determine how/if they apply.
Compliance requirements in Singapore are updated constantly. So, the new changes must be monitored and implemented on a regular basis.
- Conduct regular compliance audits.
To review the organization’s adherence to regulatory guidelines. These audits should closely evaluate compliance processes and their associated policies
For large organisations, compliance audits are managed in-house. Established startups can work with external compliance service providers instead.
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