How To Incorporate Financial Services in Singapore?

In the last 30 years, Singapore has grown into a developing financial centre that serves both the local economy and also the Asia Pacific region, and even the wider world. Today, Singapore is successfully regarded by key financial services institutions and industry players as an ideal base to penetrate the markets.

As we have already known that Singapore’s location is in the heart of Asia Pacific, and that makes the country home to many financial institutions. Additionally, the country is a well-established international financial centre too. 

The latest Global Financial Centre Index shows Singapore as the third most competitive financial centre in the world, behind only London and New York. Singapore has also overtaken Japan to become the largest foreign exchange centre in Asia, and third largest globally.

The financial services sector is one of the most booming economic areas in Singapore, and moreover, a number of these financial institutions have also chosen the country as their global or regional headquarters.

This is largely assigned to the regulations passed by the Singaporean government that allows for the incorporation of the latest technological trends in the financial sector. As a result, many entrepreneurs including both local and foreign want to set up businesses in this sector.

As for doing business, especially in the financial services industry, there are some favourable regulations that you must follow. In this article, you will be given information on how you can start a business in the financial services sector!

Legislation on Companies in the Financial Sector

The licenses in the financial sector are provided by the Monetary Authority of Singapore (MAS). Regarding the legislation, the Finance Ministry of Singapore provides guidelines that companies in finance should follow strictly. There are types of businesses that you can start in the financial sector, and the following laws that you need to comply too!

• The Monetary Authority of Singapore Act → This act spells out all of the procedures that must be followed when starting a banking business in Singapore.
• The Banking Law → This spells out the regulations that all banking institutions must adhere to.
• The Securities, Future, Trust Companies, and Financial Advisers Acts → These acts provide the requirements for opening business that will be listed in the capital markets of Singapore.
• The Insurance Act → This act provides all of the requirements needed for setting up an insurance institution in Singapore.
• The Anti-Money Laundering Act → This act provides all of the activities that companies in this sector should tackle money laundering.

Before setting up a company, it is important to have a consultation with the experts on the required procedures and legal requirements for that specific business.

The Financial Services Companies in Singapore

Financial companies fall under the regulations of the Finance Companies Act in Singapore, they also provide credit facilities to Singapore and other corporations. These companies are not allowed to operate in foreign currency or even gold. You can only expand the scope of your activities if your request to the MAS is accepted.

There are several types of financial companies that you can establish in Singapore. They include banks, insurance companies, brokerage firms, investment firms and fintech companies. You will need the licenses for opening up a financial company in Singapore, and these companies that need licenses are:

• For local banks, wholesale banks, representative offices of foreign banks, branch offices, finance companies and financial holding companies.
• For exempt trust companies, for corporate finance advisers for fund management companies and licenses trust companies.
• For licensed and exempt financial advisers, as well as for exempt persons offering financial advisory services.
• For direct life and captive insurers and reinsurers and for captive general and life insurers.

Steps To Incorporate Financial Services in Singapore

Before setting up a financial company, you must meet all the company law requirements. This means the business must have at least one shareholder, one director, and a company secretary. However, all businesses must be registered with the Accounting & Corporate Regulatory Authority (ACRA) through Bizfile. It is an online registration and information portal, including individuals, firms or corporations that have a business for a foreign company.

The application will be processed immediately after its fee is paid, but may take between 14 days to 2 months if the application is referred for another agency to be approved or reviewed.

Moreover, there are 3 steps to register your business in the financial sector!

Step 1: Get The Company Name Approved

Before registering, all Singapore companies must first have their name approved by ACRA. The approval name is a simple online procedure, and the company name must be followed by the guidelines:

• The name cannot be identical to an existing business in Singapore
• The name must not infringe on any trademarks.
• The name cannot be obscene or vulgar.
• The name must not have been reserved by another company.

If the company name follows ACRA’s rules, it normally will be approved in less than an hour. In addition, when the process is approved, a company can reserve the name for up to 120 days. 

Step 2: Prepare The Company Registration Documents

After the name approval, a company must get the following documents ready before registering the business. 

Documents required by ACRA:

• Company Constitution, previously known as Articles of Association.
• Signed Consent to Act as a Director for each director.
• Signed Consent to Act as Company Secretary by the company secretary.
• Identification and residential address details for each shareholder and officer of the company.

All the documents above must be in English or officially translated into English.

Step 3: Register with Singapore Company Registrar, ACRA

Once the documents are prepared, a company can be officially registered with ACRA. The registration process is online and takes less than an hour. However, in rare cases, if the company registration has to be referred to another government agency for further review, the process can take a few weeks.

Incorporate financial services or companies in Singapore is relatively easy as long as you understand the law and what company type that you want to have. Additionally, you need to prepare the official documents to register your company. If you are unsure or find the difficulty to keep it up, you may contact us below. Viettonkin will always be ready to assist you anytime!