For Singapore businesses, regulatory compliance is crucial. The country’s reputation as a trusted business hub in Southeast Asia is thanks to government measures that prevent illicit activities in corporate entities. All businesses in Singapore must comply with these regulatory requirements. Here’s how it works.
What is Regulatory Compliance?
Regulatory compliance is an organisation’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 – Work Injury Compensation Act
What is the importance of regulatory compliance?
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 organisation conforms to stringent, complex legal mandates and applicable laws.
Typical Areas of Compliance Risk
* Reporting & Taxation
* Data Protection
* 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.
Singapore’s businesses 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 promptly.)
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).
Every Singapore business 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 digitalization. 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 the 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 organisations 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 to comply with regulatory 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 organisation
- Anticipating compliance trends and integrating regulatory processes to increase efficiency.
- Complications from evolving consumer technologies and their 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 interconnected devices. Combined with the lowered security in mobile and IoT devices, it all creates compliance vulnerabilities in organisations’ networks.
It is also important to note that the Certified Regulatory Compliance Manager (CRCM) certification offered by the ABA is not exclusive to Singapore, but can still be useful for compliance professionals seeking expertise in regulatory compliance management in Singapore.
How do companies in Singapore ensure regulatory compliance?
Regulatory compliance requires companies to analyse 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:
1. Identify applicable regulations.
Determine which laws and compliance regulations apply to the company’s industry and operations.
2. Determine requirements.
Identify the requirements in each regulation that are relevant to the organisation, and consider options to implement these mandates.
3. 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.
4. Monitor changes, and determine how/if they apply.
Compliance requirements in Singapore are updated constantly. So, the new changes must be monitored and implemented regularly.
5. Conduct regular compliance audits.
To review the organisation’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.
Contact Lanturn for more information.