Singapore’s New Corporate Regulatory Regime: Transforming the Legal Landscape in 2025

Singapore is reinforcing its status as a leading global financial hub with a comprehensive reform of its corporate law framework. Effective from June 2025, the CSP Act 2024 introduces a fundamentally new regulatory paradigm for the corporate services sector, significantly strengthening the supervisory powers of state authorities. This transformation aims to enhance transparency, combat the misuse of corporate structures, and ensure alignment with international financial security standards .

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CSP Act 2024: Strategic Goals and Reform Architecture

The primary objective of the new regime is to create a unified legal framework for the activities of corporate service providers in Singapore. The Act establishes a mandatory requirement for all CSPs to register with the Accounting and Corporate Regulatory Authority (ACRA). The reform's declared goals are to increase corporate transparency, minimize the risks of using legal entities for illicit operations, and harmonize national regulations with international best practices, particularly the recommendations of the Financial Action Task Force (FATF) .

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Scope of Regulation: Covered Activities

The new law applies to individuals and legal entities professionally providing the following services:

• Incorporation of companies and other legal entities as an authorized client representative.
• Provision of nominee director services in Singapore and nominee shareholder services.
• Providing a registered office or business address for a legal entity.
• Filing documents and notifications with ACRA on behalf of a client.
• Providing administrative and secretarial services directly related to corporate governance.
• Conducting any of these activities without obtaining a CSP license in Singapore is considered an offense.

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Strengthened Requirements for Nominee Directors and Shareholders

For the first time, the legislation formalizes the requirement to conduct fit and proper checks on nominee directors and shareholders to ensure they meet criteria of integrity, competence, and financial soundness. Corporate Service Providers (CSPs) in Singapore are directly responsible for conducting these checks and must document the results. CSPs are also obligated to continuously monitor these individuals' compliance with the established standards throughout their tenure.

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Intensified AML/CFT Regime and Responsibility Distribution

The reform entails a significant tightening of AML/CFT obligations in Singapore for CSPs. Their responsibilities now include:

• Conducting comprehensive customer due diligence (KYC) and verification of beneficial owners.
• Performing ongoing monitoring of client transactions and business activity.
• Properly documenting and storing all relevant information.
• Promptly identifying and reporting suspicious transactions to the authorized bodies.
• Developing, implementing, and maintaining up-to-date internal AML/CFT policies and procedures in Singapore.
• Failure to comply with these ACRA requirements can lead to serious sanctions, including suspension or revocation of registration.

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System of Penalties and Fines for Non-Compliance

The CSP Act 2024 establishes a strict liability system for non-compliance. Sanctions include:

• Fines of up to 100,000 Singapore dollars for operating as a CSP without registration.
• Personal liability for the provider's managers and key personnel, with fines of up to 10,000 SGD.
• Administrative measures such as suspension or a complete ban on activities.
• Additional penalties for violations in the area of AML/CFT in Singapore, the size of which may be a multiple of the transaction amount or damage caused.

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Development of the Family Office Ecosystem and Extension of Investment Incentives

Alongside tighter regulatory oversight, Singapore continues to actively develop the Single Family Offices (SFO) in Singapore sector. The number of such structures has exceeded 2,000 . The authorities have confirmed the extension of key tax schemes for investment funds (schemes 13D, 13O, 13U) until 2029. This measure aims to maintain the jurisdiction's investment appeal and stimulate the inflow of private capital, demonstrating a balanced approach between control and fostering a favorable business climate .

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Practical Business Recommendations for Adapting to the New Conditions

To ensure seamless compliance with the new regulatory requirements, companies and service providers are advised to take the following steps:

• Conduct a detailed audit of current activities to assess their alignment with CSP criteria.
• Complete the CSP licensing in Singapore process with ACRA within the statutory deadlines.
• Perform comprehensive fit and proper checks on all nominee directors and shareholders.
• Review and update internal AML/CFT policies and procedures in Singapore.
• Re-examine existing corporate and contractual structures for compliance with the new regulatory realities, paying special attention to documentation and process recording.
  Implementing these measures will allow market participants not only to minimize legal and reputational risks but also to effectively leverage the advantages of Singapore's updated legal environment for long-term and sustainable business development.

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