Singapore Ushers in New Era of Corporate Regulation: Strategic Implications for Business and Investors

Singapore, a leading Southeast Asian financial hub, has initiated a systematic transformation of its corporate landscape. Effective June 9, 2025, an unprecedented legislative package takes effect, designed to strengthen transparency, accountability, and the jurisdiction's international reputation. The cornerstone of this reform is the Singapore CSP Act 2024 (Corporate Service Providers Act), which establishes unified standards for the corporate services sector. Concurrently, authorities are extending and expanding key tax incentives for Singapore Single Family Offices (SFOs) and investment funds, collectively marking a new era of Singapore corporate regulation that balances rigorous oversight with maintaining a favorable environment for long-term capital.

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New Regulatory Framework: Understanding the CSP Act 2024

The Singapore CSP Act 2024 represents a targeted consolidation of previously fragmented regulatory requirements for the corporate services sector. Its primary objective is establishing a unified supervisory regime under the Accounting and Corporate Regulatory Authority (ACRA). The Act introduces a mandatory CSP registration with ACRA requirement for all legal entities and individuals providing specified corporate services on a professional basis. This fundamentally transforms the landscape, converting once lightly-regulated activities into a licensed profession with clear standards and accountability.

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Scope of Regulated Corporate Service Providers

The Act's scope is clearly defined and covers a broad spectrum of professional services. The mandatory CSP registration with ACRA applies to entities conducting the following activities:

• Forming legal entities on behalf of third parties
• Providing nominee shareholder or director services
• Offering registered office or business address services
• Performing corporate secretarial or accounting functions when integrally connected to other regulated CSP services
• Filing documents and notifications with ACRA as an authorized client representative

This comprehensive definition ensures the law covers traditional Singapore corporate service providers, law firms, trust companies, and private consultants offering such services.

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Enhanced AML/CFT Duties and "Fit and Proper" Checks for Nominees

One of the most significant innovations under the Singapore CSP Act 2024 is the introduction of stringent personnel vetting standards. All nominee directors and shareholders appointed by providers must undergo enhanced Singapore nominee director checks to meet "fit and proper" criteria (encompassing integrity, competence, and financial soundness). CSPs bear direct responsibility for the adequacy and thoroughness of these checks.

Simultaneously, AML/CFT obligations for CSPs are strengthened. Providers must develop, implement, and maintain internal policies and procedures combating money laundering, terrorist financing, and proliferation financing. This includes customer due diligence (KYC), ongoing transaction monitoring, risk assessments, and mandatory suspicious transaction reporting.

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Penalties and Enforcement: What to Expect?

The new law establishes severe penalties for non-compliance, demonstrating the regulator's serious intent. Operating without valid CSP registration with ACRA constitutes an offense. Liability is personal: corporate offenders face fines up to SGD 100,000, while directors and key managers of such companies face personal fines up to SGD 10,000. These sanction potentials make strict compliance a financial and reputational necessity for all Singapore corporate service providers.

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Family Office Growth and Extended Tax Incentives

Alongside CSP regulatory tightening, Singapore continues actively attracting private capital through Singapore Single Family Offices (SFOs). By end-2024, jurisdiction hosted over 2,000 such structures, demonstrating its financial ecosystem's sustained appeal. Authorities confirmed extension of key fund tax schemes until December 31, 2029 – the Singapore fund tax incentives 13D 13O 13U. These schemes (13O for resident funds, 13U for foreign funds, and 13D for enhanced tier) provide capital gains tax exemption and certain dividend income benefits, creating predictable, favorable conditions for private wealth management.

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Strategic Action Plan for Companies and Providers

In light of upcoming changes, companies and service providers should take these essential steps:

• Conduct activity assessment to determine whether current or planned operations qualify as regulated Singapore corporate service providers
• Initiate ACRA registration immediately upon confirming CSP status, preparing all required documentation
• Strengthen nominee vetting by implementing formalized, documented Singapore nominee director checks meeting "fit and proper" standards
• Update compliance frameworks to fully meet enhanced AML/CFT obligations under the new regime
• Leverage tax incentives by analyzing applicability of extended Singapore fund tax incentives 13D 13O 13U for asset management businesses

Singapore is implementing balanced policies—tightening control over corporate services to enhance transparency while maintaining and strengthening competitive advantages for global private capital and investment funds.

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