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Doing Business in Singapore: Overview
Practical Law Country Q&A 4-524-0309 (Approx. 37 pages)
Doing Business in Singapore: Overview
by Lee Soo Chye, Jacqueline Teo and Sheam Zenglin, Wee Swee Teow LLP
| Law stated as at 01 Sep 2021 • Singapore |
A Q&A guide to doing business in Singapore.
This Q&A gives an overview of key recent developments affecting doing business in Singapore as well as an introduction to the legal system; foreign investment, including restrictions, currency regulations and incentives; and business vehicles and their relevant restrictions and liabilities. The article also summarises the laws regulating employment relationships, including redundancies and mass layoffs, and provides short overviews on competition law; data protection; and product liability and safety. In addition, there are comprehensive summaries on taxation and tax residency; and intellectual property rights over patents, trade marks, registered and unregistered designs.
Overview
Economy
Singapore has a developed free-market economy. It has a pro-business reputation due to its attractive investment climate and stable political environment. In 2021, it was ranked as the third least corrupt country in Transparency International's Corruptions Perceptions Index.
Dominant Industries
The dominant industries include:
- Financial services.
- Energy and infrastructure.
- Manufacturing (of electronics and chemicals, and in biomedical sciences, logistics, and transport engineering).
- Tourism and medical tourism.
- Information and communication technologies.
Population and Language
The population is estimated to be 5.68 million. The resident population is 4.04 million of which 3.52 million are citizens and 0.52 million are permanent residents. The working language and lingua franca is English. Mandarin, Malay, and Tamil are the official languages, which together with English, are the most commonly used languages.
Business Culture
Singapore's business culture values harmony, courtesy, and respect for seniority. Punctuality is observed for business appointments. Office hours are generally from 8.30 am to 5.30 pm from Monday to Friday, while banks observe office hours of 9.00 am to 4.00 pm from Monday to Friday. Gazetted annual public holidays include New Year's Day, Lunar New Year, Good Friday, Labour Day, Hari Raya Puasa, Vesak Day, Hari Raya Haji, National Day, Deepavali, and Christmas Day.
Key Business and Economic Events
Singapore is an active member of the World Trade Organisation (WTO). During the novel coronavirus disease (COVID-19) pandemic, Singapore became a co-sponsor to three statements on trade and COVID-19 at the WTO which seek to ensure that supply chains remain open and connected:
- COVID-19 and the Multilateral Trading System by Ministers Responsible for the WTO.
- Responding to the COVID-19 Pandemic with Open and Predictable Trade in Agriculture and Food Products.
- Statement on Highlighting the Importance of Micro, Small, and Medium-Sized Enterprises (MSMEs) in the Time of COVID-19.
The International Monetary Fund (IMF) team conducted discussions through virtual meetings for the 2021 Article IV Consultation with Singapore from 27 April to 11 May 2021. The IMF is of the preliminary view that Singapore entered the pandemic with sizable policy space and robust economic policy frameworks. Although the pandemic had a severe impact, the economy is recovering, and real GDP is projected to expand by 6% in 2021.
New Legislation
Insolvency Restructuring and Dissolution Act 2018 (IRDA). On 30 July 2020, the IRDA came into force, consolidating Singapore's personal and corporate insolvency and debt restructuring laws into a single piece of legislation. The IRDA came into effect together with 48 related pieces of subsidiary legislation. Accordingly, the Bankruptcy Act and relevant provisions of the Companies Act (Cap. 50) (Companies Act) have been repealed.
The IRDA introduced new features to corporate debt restructuring and insolvency, including:
- Restricting certain contractual rights that are triggered by restructuring proceedings (ipso facto clauses). These clauses allow a party to terminate or modify the terms of a contract on the occurrence of certain events, for example, the contractual counterparty's insolvency or restructuring. They are unenforceable under the IRDA (section 440, IRDA).
- Enlarging the range of causes of action that can be funded by third parties, specifically certain office-holder avoidance actions, which otherwise may not be pursued due to lack of funds. Both judicial managers and liquidators are statutorily empowered under the IRDA to enter into agreements with third parties to pursue claims and recover more for creditors (section 144(g), 177(1)(a), IRDA).
- A summary procedure for the dissolution of companies that otherwise have insufficient assets to administer winding up of the company (section 344, Companies Act).
COVID-19 (Temporary Measures) Act 2020. On 7 April 2020, the COVID-19 (Temporary Measures) Act 2020 was passed with the aim of offering temporary relief to businesses and individuals affected by the COVID-19 pandemic. The Act has subsequently been amended. It covers the following areas of relief:
- Temporary relief from actions due to inability to perform contractual obligations for specified contracts.
- Rental relief and related measures to mitigate the impact of COVID-19 events on eligible lessees and licensees of non-residential properties by providing them relief from the payment of rent and licence fees in specified situations.
- Temporary relief for financially distressed individuals and businesses.
- Temporary measures for the conduct of meetings and court proceedings.
- Temporary measures concerning the remission of property tax.
- Relief from delays in performance because of breach of construction contracts, supply contracts, or related contracts.
- Temporary measures for the conduct of collective property sales.
New Code of Conduct for Leasing of Retail Premises in Singapore. On 26 March 2021, the Fair Tenancy Pro Tem Committee comprising 18 key representatives from both the landlord and tenant communities, industry experts, and academia introduced a Code of Conduct for Leasing of Retail Premises in Singapore (COC). The COC provides a set of guidelines to:
- Enable fair and balanced lease negotiations.
- Develop a governance framework to ensure compliance by the industry.
- Introduce an accessible dispute resolution framework.
The COC is currently not legally binding. However, members of the committee have committed to adopt and abide by the COC from 1 June 2021 when it came into effect. On 3 May 2021, a Fair Tenancy Industry Committee was formed to serve as the custodian of the COC and to monitor industry compliance. The Fair Tenancy Pro Tem Committee has recommended the government make compliance with the COC mandatory through legislation.
Legal System
Singapore's legal system is based on common law and statutes enacted by Parliament. Singapore is a city-state and does not have a federal system. Its government is modelled on the Westminster system with three separate branches of government, the:
- Legislature (which comprises the President and Parliament).
- Executive (which comprises cabinet ministers and office-holders, and is led by the Prime Minister).
- Judiciary.
Foreign Investment
Government Authorisations
Foreign investors must seek approval from the Singapore Land Authority before acquiring the following types of property:
- Vacant residential land and landed residential property (for example terrace houses, semi-detached houses, strata landed homes, and shophouses for non-commercial use).
- Association premises.
- Places of worship.
- Workers' dormitories, serviced apartments, and boarding houses.
If foreign investors intend to purchase restricted property to construct flats or dwelling houses for sale, they must apply to the Singapore Land Authority for a Qualifying Certificate.
5. Are there any restrictions or prohibitions on doing business with certain countries, jurisdictions, entities, organisations or individuals?
Singapore is a member state of the UN. The United Nations Act (Cap. 339) enables the government to issue regulations to comply with UN Security Council Resolutions. The regulations prohibit persons in Singapore from dealing with designated individuals and entities and also include arms embargoes and sanctions on missiles or nuclear-related goods.
The Monetary Authority of Singapore (MAS) imposes financial sanctions and restrictions on financial institutions and variable capital companies (VCCs) through MAS regulations issued under section 27A of the Monetary Authority of Singapore Act (Cap. 186) and section 83 of the Variable Capital Companies Act 2018. The MAS also imposes targeted financial sanctions provided for under the Terrorism (Suppression of Financing) Act (Cap. 325). A list of designated individuals and entities with sanctions against them is available at www.mas.gov.sg/regulation/anti-money-laundering/targeted-financial-sanctions/lists-of-designated-individuals-and-entities.
Trade sanctions and restrictions are imposed by Singapore Customs under the Regulation of Imports and Exports Act (Cap. 272A). A list of these sanctions and restrictions is available at www.customs.gov.sg.
6. Are there any exchange control or currency regulations or any registration requirements under anti-money laundering laws?
There are generally no foreign exchange or currency restrictions on the remittance or repatriation of capital or profits in or out of Singapore.
There are three relevant types of reports required under the Anti-Money Laundering and Counter-Financing of Terrorism regime in Singapore:
- Cash Movement Reports.
- Cash Transaction Reports.
- Suspicious Transaction Reports.
Anyone moving physical currency and bearer negotiable instruments exceeding the prescribed amount (presently SGD20,000) or its equivalent in a foreign currency into or out of Singapore is required, barring exemptions, to make a Cash Movement Report to the Suspicious Transaction Reporting Office (STRO) (section 48C, Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act).
Anyone with reasonable grounds to suspect in the course of trade, profession, business, or employment that any property may be connected to a criminal activity is required to file a Suspicious Transaction Report to the STRO (section 39, Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act).
Regulated dealers and pawnbrokers are required to make Cash Transaction Reports to the STRO and the relevant regulatory authorities when facilitating transactions including the sale, purchase, or redemption of precious stone and precious metal products or asset-backed tokens exceeding a total cash equivalent of SGD20,000 (section 17, Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act.)
As a matter of policy, the MAS also imposes restrictions on the amount of Singapore dollars that can be loaned to non-resident financial institutions.
There are anti-money laundering and counter-financing of terrorism guidelines imposed on various entities including:
- Financial institutions.
- Licensees under the Payment Services Act 2019.
- Registered filing agents carrying out transactions with the Accounting and Corporate Regulatory Authority (ACRA).
These guidelines typically require the identification and verification of any beneficial owners in relation to their customers, and the obligation to report suspicious transactions to the STRO.
Grants and Incentives
Companies can apply for grants from various public agencies and tax incentives under the Income Tax Act (Cap. 134) and the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86).
The administering agencies of these grants and tax incentives include:
- Enterprise Singapore (www.enterprisesg.gov.sg).
- The Maritime Port of Singapore (www.mpa.gov.sg).
- The Economic Development Board (www.edb.gov.sg).
- The MAS (www.mas.gov.sg).
- The Inland Revenue Authority of Singapore (IRAS) (www.iras.gov.sg).
Foreign Investors
The Global Investor Programme administered by the Economic Development Board of Singapore accords Singapore permanent resident status to eligible global investors who intend to drive their businesses and investment growth from Singapore. In addition, to develop high-value and substantive economic activities in Singapore, the Economic Development Board also provides several incentives and schemes targeting foreign investors including the:
- Special Situation Fund for Start-ups.
- Pioneer Certificate Incentive (PC).
- Development and Expansion Incentive (DEI).
- Finance & Treasury Centre (FTC) Incentive.
- Tech@SG Programme.
- Tech.Pass.
A detailed list of incentives can be found at www.edb.gov.sg/en/how-we-help/incentives-and-schemes.html.
Business Vehicles
9. What are the main formation, registration and reporting requirements for the most common corporate business vehicle used by foreign companies in your jurisdiction?
Registration and Formation
Registration is fully computerised and managed by the Accounting and Corporate Regulatory Authority (ACRA). A company can be registered online using BizFile (a portal on the ACRA website) by:
- A Singapore citizen.
- A permanent resident.
- An individual holding a SingPass (an online account to access Singapore government e-services).
Foreign individuals and entities must engage the services of registered filing agents (for example law, accounting, or corporate secretariat firms).
Company registration involves:
- Applying for approval of a proposed company name.
- Filing a request for incorporation.
Certain types of businesses (for example, financial service providers) also need consent from other agencies.
A company can commence business as soon as it is registered with the ACRA, unless its business activities need further licences or approvals from other government agencies.
More details about the registration of companies in Singapore can be found at www.acra.gov.sg.
Reporting Requirements
All Singapore incorporated companies must:
- Decide on their financial year end (FYE).
- Appoint an auditor within three months of incorporation (unless exempted from audit requirements).
- For companies with a FYE on or after 31 August 2018, hold all annual general meetings (AGMs) (including the first) within six months after their FYE. For companies with a FYE before 31 August 2018, hold the first AGM within 18 months of incorporation and subsequent AGMs yearly at intervals of not more than 15 months.
- Have their accounts audited (unless it is a dormant company or falls within the definition of a small company under the Companies Act) (section 201(8), Companies Act).
A private company is a small company and is exempt from having its accounts audited if it has met two out of three of the following criteria for the past two consecutive financial years:
- Its total annual revenue does not exceed SGD10 million.
- Its total assets do not exceed SGD10 million.
- The total number of employees is under 50.
(Section 205C, Thirteenth Schedule, Companies Act.)
Additional requirements apply to private companies that form part of a bigger group of companies.
All companies registered in Singapore, unless they are exempt, must maintain a register of registrable controllers (section 386AF, Companies Act). The register must be kept by the company and not be made available to the public. However, it may be accessed on request by public agencies for the administration and enforcement of laws under their scope of influence.
Controllers of a company are individuals or legal entities that have a significant interest in, or significant control over, a company. Significant interest means:
- Interest in more than 25% of the company's shares.
- Holding shares with more than 25% of the total voting power in the company.
(Paragraph 2, Sixteenth Schedule, Companies Act.)
Significant control means holding:
- The right to, directly or indirectly, appoint or remove directors who hold the majority of the voting rights at the meeting of directors on all or substantially all matters.
- Having, directly or indirectly, more than 25% of the voting rights on matters that are to be decided by a vote of the members of the company.
- The right to exercise, or actually exercise, significant influence or control over the company.
(Paragraph 1, Sixteenth Schedule, Companies Act.)
The following information must be filed with the IRAS annually:
- Details of a company's FYE, if it is not 31 December.
- A form declaring a company's revenue and estimated chargeable income within three months of the end of the financial year (unless it qualifies for administrative concessions).
- An annual tax return by 30 November (if submitted in hard copy) or 15 December (if e-filed) each year.
(Sections 63, 197, 198, Companies Act.)
The following information must be filed with ACRA annually:
- For companies with FYE ending on or after 31 August 2018, an annual return:
- within five months after a company's FYE in the case of a listed company; and
- seven months after a company's FYE in the case of any other company.
For companies with FYE ending before 31 August 2018, an annual return within 30 days after the AGM. - Financial statements in XBRL format unless exempted. Some companies will file a full set of financial statements in XBRL format, while others will file key financial data in XBRL format and a full signed set of the financial statements tabled at the AGM and/or circulated to members (AGM FS) in PDF.
(Section 197, Companies Act.)
The following information must be filed with ACRA as and when necessary:
- A statement of particulars within 30 days of creating a charge over the company's property or undertakings.
- Changes in the company's name, business activity, and registered office address within 14 days.
- Changes to directors, secretaries, and shareholders of the company within 14 days.
(Sections 26A, 28, 131, 143, 173A, Companies Act.)
Share Capital
There is no minimum or maximum share capital requirement for Singapore companies. A company can be incorporated with share capital of SGD1, which can be increased any time after incorporation. The concepts of authorised capital and par value of shares were abolished in 2004.
Non-Cash Consideration
Shares can be allotted either for cash or non-cash consideration (for example, for the transfer of property or provision of services).
Rights Attaching to Shares
Restrictions on Rights Attaching to Shares. A private company is one in which the:
- Right to transfer its shares is restricted. A restriction on transfer of shares (for example, transfer being subject to the directors' approval) will satisfy this requirement.
- Number of shareholders does not exceed 50.
(Section 18, Companies Act.)
Automatic Rights Attaching to Shares. Statutory rights attached to shares include the right to:
- Attend and speak up at general meetings.
- See audited accounts and directors' reports.
- Be treated fairly in the case of minority shareholders.
(Sections 180, 203, 215, Companies Act.)
Other rights can be set out in the company's constitution or relevant shareholders' agreements and can include the right of pre-emption in the event of a proposed share transfer by any one shareholder.
10. What is the standard management structure and key liability issues for the most common form of corporate business vehicle used by foreign companies in your jurisdiction?
Management Structure
The board of a private company must comprise at least one director who is a natural person ordinarily resident in Singapore. A director must be at least 18 years of age. There is no maximum age limit for directors.
The board of directors is responsible for the day-to-day operation of the company and can exercise all the powers of the company, except those powers reserved to the members by the Companies Act or its constitution (to be exercised at a general meeting).
Management Restrictions
In general, there are no statutory restrictions on foreign managers except for the requirement to obtain the relevant work permits. In certain industries (for example, the financial and payment services sector), key appointment holders must be approved by the relevant regulatory authorities.
Directors' and Officers' Liability
Directors and officers are subject to common law duties including:
- A duty to act honestly and in good faith in the interests of the company.
- A duty to exercise care, skill, and diligence.
There are also statutory duties under the Companies Act.
A director is subject to both civil and criminal proceedings for non-compliance, possibly leading to disqualification or debarment from existing and future directorships.
11. What are the main environmental regulations and considerations that a business must take into account when setting up and doing business in your jurisdiction?
Key environmental legislation includes:
- Environmental Protection and Management Act (Cap. 94A).
- Environmental Public Health Act (Cap. 95).
- Hazardous Waste (Control of Export, Import and Transit) Act (Cap. 122A).
- Prevention of Pollution of the Sea Act (Cap. 243).
- Transboundary Haze Pollution Act 2014.
- Workplace Safety and Health Act (Cap. 354A).
There are permit/licensing regimes for the following activities:
- Use and occupation of scheduled premises for prescribed industrial activities.
- Discharge of pollutants.
- Import, manufacture, and sale of hazardous substances.
- Business transactions involving radioactive materials and irradiating apparatus.
Employment
Foreign Employees
The Employment Act (Cap. 91) covers most foreign employees. However, the protections of the Employment Act do not extend to foreign domestic workers, whose employment relationships are solely governed by the Employment of Foreign Manpower Act (Cap. 91A).
The Employment of Foreign Manpower Act also covers employment of foreign employees issued a work pass by the Ministry of Manpower.
Employees Working Abroad
There are no statutory rules that apply to Singapore citizens or permanent residents working abroad. Generally, their employment rights are governed by the laws of the jurisdiction in which they work unless their employment contract provides that Singapore law is to apply.
Mandatory Rules of Law
Employment in Singapore is governed by a mixture of common law and legislation.
The main laws governing employment law in Singapore are the:
- Employment Act.
- Retirement and Re-Employment Act (Cap. 274A).
Other employers and employees' rights and obligations are also found in the Workplace Health and Safety Act and the Work Injury Compensation Act. These Acts are administered by the Ministry of Manpower.
The Employment Act now governs the employment relationship between employers and all employees (excluding public servants, domestic workers, and seafarers). Matters not covered by the Employment Act can be subject to the contract between the employer and employee.
There is also advice and some non-statutory guidelines issued by the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), which authorities encourage employers to observe.
There is generally no requirement for a written contract of employment. It can therefore be written or oral, express, or implied. However, employers are required to provide key employment terms in writing to all employees within 14 days from the date on which the employee starts employment (section 95A(2), Employment Act).
Main Terms
Key employment terms which employers are required to provide in writing to their employees are:
- Employer's name and trade name.
- Employee's name.
- Job title and description of main duties and responsibilities.
- Duration of employment (if the term is fixed).
- Daily working hours, number of working days per week, and rest days.
- Salary period (and payment period if different from salary period), basic rate of pay, including any fixed allowance or deduction during each salary period (if applicable), rate of overtime pay, and any other salary related component (if applicable).
- Leave entitlement and medical benefits.
- Probation period (if applicable).
- Notice period for dismissal by employer or termination of employment contract by employee.
(Section 95A(2), Employment Act. Terms provided in second schedule, Employment (Employment Records, Key Employment Terms and Pay Slips) Regulations 2016.)
Implied Terms
The terms and conditions of an employment contract cannot be any less favourable than the minimum provided for under the Employment Act (section 8, Employment Act). Less favourable terms are invalid. The minimum requirements for workers whose basic monthly salaries does not exceed SGD4,500 and non-workers whose basic salaries do not exceed SGD2,600 are:
- Contractual working hours (excluding break time and overtime) cannot exceed eight hours a day or 44 hours a week.
- Overtime pay must be fixed at least 1.5 hours times the hourly basic rate of pay.
- Salary and overtime pay must be paid at least once a month. Salary must be paid within seven days of the end of the salary period. Overtime pay must be paid within 14 days of the end of the salary period.
- One rest day every week without pay, and 11 paid public holidays per year.
- Entitlement to sick leave and paid hospitalisation leave (provided that the employee has worked for the employer for at least three months and informed or tried to inform the employer within 48 hours of absence).
- Entitlement to annual leave, calculated according to the number of years of continuous service with the employer.
(Part IV, Employment Act.)
In addition, there are obligations that can be implied into employment contracts depending on the specific circumstances of each case, based on common law and/or contract law principles. A notable example is the implied term of mutual trust and confidence, which imposes duties on employers including but not limited to:
- A duty not to act in a corrupt manner which would clearly undermine the employee's future job prospects.
- A duty not to vary terms unilaterally and unreasonably.
- A duty to redress complaints of discrimination or provide a grievance procedure.
- A duty not to suspend an employee for disciplinary purposes without proper and reasonable cause.
- A duty to investigate complaints of sexual harassment.
- A duty to behave with civility and respect.
- A duty not to reprimand without merit in humiliating circumstances.
- A duty not to behave in an intolerable or wholly unacceptable way.
Collective Agreements
A collective agreement can apply to the relationship between employer and employee if there is one in force, and the employee is a member of the registered trade union which negotiated it. A collective agreement is only binding on the parties to it, after its terms have been put into writing, delivered to the Industrial Arbitration Court, and certified by the same court. The validity period of a collective is at least two years, but no more than three years.
Work Permits
All foreign nationals must have a valid work permit before they begin work.
There are various types of work permits for different salary ranges and qualifications (see www.mom.gov.sg/passes-and-permits). Average processing time and cost varies according to the type of work permit applied for.
Work permits can be applied for online with the Ministry of Manpower (see www.mom.gov.sg/passes-and-permits/work-permit-for-foreign-worker/apply-for-work-permit).
15. Are employees entitled to management representation and/or to be consulted in relation to corporate transactions (such as changes in control, redundancies and disposals)?
There is no general right entitling employees to management representation or consultation in relation to corporate transactions (for example, redundancies and disposals).
However, recognised trade unions can represent their members in collective bargaining in industrial matters in certain situations (for example, transfer of employment) (section 8, Industrial Relations Act).
Termination
Grounds for termination with cause can arise from contract, statute, and common law.
Employees can be terminated by an employer giving notice of intention to terminate the employment contract or payment of salary in lieu of notice. The length of the notice period must be the same for both employer and employee (section 10, Employment Act). The notice period can be determined by any provision in the employment contract, or in the absence of the employment contract in accordance with section 10 of the Employment Act. For employees covered by the Employment Act and the Retirement and Re-Employment Act, termination of employment is also subject to the requirements in those Acts.
Employees can also be terminated without notice in the event of their wilful breach of a condition of the employment contract. The employee also has a right to terminate the employment contract if the employer wilfully breaches its conditions.
The Employment Claims Tribunal hears claims relating to wrongful dismissal. (These claims were previously heard by the Ministry of Manpower.)
Fair Dismissal
There is a distinction between justified or fair and unjustified, unfair, or wrongful dismissals.
Fair or justified dismissal includes the following:
- Misconduct including but not limited to theft, dishonesty, or disorderly conduct at work, insubordination and bringing the organisation into disrepute, provided the employer can prove it.
- Poor performance, provided the employer can substantiate it.
- Dismissals with due notice.
- Redundancy.
(Tripartite Guidelines on Wrongful Dismissal under the Employment Claims Act 2016.)
Due inquiry should be conducted by the employer before dismissal of the employee (section 14, Employment Act).
Statutory Minimum Notice. The applicable notice period is determined from any relevant term in the employment contract. In the absence of a contractual term specifying the notice period for an employment relationship, there is a statutory minimum, which varies according to the period of the employee's service (section 10(3), Employment Act).
Severance Payment. No severance pay is required by employment legislation. Any obligation for the employer to make a severance payment is provided for in the employment contract.
Unfair Dismissal
Grounds for Unfair Dismissal. A dismissal that is unjustified, wrongful, or unfair is one carried out without just cause or excuse and includes the following:
- Dismissal on discriminatory grounds based on age, race, gender, religion, marital status, and family responsibilities, or disability.
- Dismissal to deprive an employee of benefits or entitlements.
- Dismissal to punish an employee for exercising an employment right.
- Dismissal with notice, but the reason given by the employer for the dismissal is proven to be false.
(Tripartite Guidelines on Wrongful Dismissal under the Employment Claims Act 2016.)
Remedies. If an employee considers that they have been dismissed without just cause or excuse, they can lodge a claim under Section 13 of the Employment Claims Act for reinstatement in employment or compensation.
Procedural Requirements
There are no mandatory procedural requirements that must be followed when redundancy exercises or mass terminations are carried out. There are however Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment which recommend how to carry out the retrenchment exercise. Any employer who decides to go through a retrenchment exercise is strongly encouraged to notify the Ministry of Manpower. Employers must notify the Ministry of Manpower if they meet all of the following requirements, they:
- Have a business registered in Singapore.
- Have at least ten employees.
- Notified at least five employees of their retrenchment within any six-month period.
(Workforce Singapore Agency Act.)
The notification must be submitted within five working days after the fifth employee is notified. Subsequent notifications must be submitted within five working days after each employee is notified of their redundancy in any six-month period. Failure to comply with the mandatory notification requirement is an offence punishable with a fine not exceeding SGD5,000 (section 42, Workforce Singapore Agency Act).
From 7 April 2020, employers who are registered in Singapore and have at least ten employees have been required to notify the Ministry of Manpower if they implement cost-savings measures that result in more than a 25% reduction in gross monthly salary for local employees or more than a 25% reduction in basic monthly salary for foreign employees. Approval from the Ministry of Manpower is not required.
Tax
Gains or profits (whether in the form of cash or benefits-in-kind) for any services rendered in Singapore or any form of employment exercised in Singapore are taxable (Income Tax Act).
The amount of tax to be paid and applicable tax rates depend on an individual's tax residency status (Second Schedule, Income Tax Act).
Tax Residence
An individual is regarded as a tax resident if they either:
- Stay or work in Singapore:
- for at least 183 days in a calendar year;
- continuously for three consecutive years; or
- work for a continuous period straddling two calendar years and their total period of stay (including the individual's physical presence immediately before and after their employment) is at least 183 days.
(Section 2, Income Tax Act.) - Qualify as a tax resident under a two-year administrative concession when they:
- work in Singapore for a period straddling two calendar years; and
- their employment period (including the individual's physical presence immediately before and after their employment) is at least 183 days.
This applies to foreign employees who have entered Singapore since 1 Jan 2007 but excludes company directors, public entertainers, or professionals (www.iras.gov.sg/irashome/Individuals/Foreigners/Learning-the-basics/Individuals--Foreigners--Required-to-Pay-Tax/).
19. What income tax, social security and other tax or contributions must be paid by the employee and the employer during the employment relationship?
Tax Resident Employees
Unless the employment contract states otherwise, employees are responsible for paying their own income tax.
The rate of income tax for resident employees ranges from 0 to 22% (with effect from the 2017 year of assessment) depending on their total remuneration. Tax resident employees are also entitled to tax reliefs to offset against the taxable income and may be eligible to enjoy the benefits of double taxation treaties.
Employees who are Singapore citizens or permanent residents must also make contributions to the Central Provident Fund (a form of social security). The contribution rates range from 5% for employees over 65 years of age to 20% for those aged 55 years and below.
Non-Tax Resident Employees
The income tax rate for non-resident employees is a flat rate of 15% or the progressive resident tax rate, whichever is higher. Non-tax resident employees can be protected from being taxed on the same income in Singapore if there is an applicable double taxation treaty.
Directors' fees and other income for example, rent earned in or derived from Singapore, will be taxed at a rate of 22%. However, if an individual is employed for 60 days or less in a year, income derived from their employment is exempt from tax (provided that the individual is not a company director, public entertainer, or professional in Singapore).
Employees who are not Singapore citizens or permanent residents do not need to make contributions to the Central Provident Fund.
Non-resident employees can enjoy time apportionment for their Singapore employment income if they qualify under the not ordinarily resident (NOR) scheme. The NOR scheme will cease after the 2020 year of assessment. The requirements for this scheme can be found at www.iras.gov.sg/IRASHome/Individuals/Foreigners/Working-out-your-taxes/Special-tax-schemes/Not-Ordinarily-Resident--NOR--Scheme/.
Employers
Unless the employment contract states otherwise, employees are responsible for paying their own income tax.
Employers of Singapore citizens and permanent residents employed in Singapore must contribute to their Central Provident Fund accounts. The contribution rates range from 7.5% for employers with employees over 65 years of age to 17% for those 55 years and below.
An employer must complete a Form IR8A every year to report their employees' remuneration.
A business entity's income that accrues in or is derived from Singapore or is received in Singapore from outside the country, is subject to income tax regardless of the business entity's tax residency status (section 10, Income Tax Act).
The tax residency of a business entity is determined by the place in which the business is controlled and managed. The location of a business entity's control and management is a question of fact. Typically, the location of a company's board of directors' meetings, during which strategic decisions are made, is a key factor in assessing residency. The place of incorporation of a company is not necessarily indicative of its tax residence. The residency status of a company may change.
21. What are the main taxes that potentially apply to a business vehicle subject to tax in your jurisdiction?
The main tax that potentially applies to a business vehicle is corporate income tax. A company is taxed at a flat rate of 17% on its chargeable income (that is, income that accrues in or is derived from Singapore or is received in Singapore from outside the country) regardless of whether it is a foreign or local company.
A company is required to file its Estimated Chargeable Income (ECI) within three months from the end of its financial year, unless it meets the criteria for waiver of this requirement. The Inland Revenue Authority of Singapore will issue its notice of assessment (NOA) on the amount of tax payable. The company is required to pay the tax shown in the NOA within one month from the date of the NOA, unless payment is made through agreed instalments.
Other taxes that may apply to businesses are:
- Goods and services tax (for businesses with annual revenue of SGD1 million or more).
- Property tax on immovable property owned by businesses.
- Stamp duty on documents (including the sale or purchase of real property and scrip shares).
If a business is structured as a partnership, the partners' income is subject to income tax.
22. How are the following taxed:
- Dividends paid to foreign corporate shareholders?
- Dividends received from foreign companies?
- Interest paid to foreign corporate shareholders?
- Intellectual property (IP) royalties paid to foreign corporate shareholders?
Dividends Paid
Dividends paid to foreign corporate shareholders by a company tax resident in Singapore are not subject to tax.
Dividends Received
Foreign dividends received in Singapore on or after 1 Jan 2004 by resident individuals are not taxable. If an individual resident in Singapore receives foreign-sourced dividends through a partnership in Singapore, these dividends may be exempt from Singapore tax if the following three conditions are met.
- The foreign income was taxed in the foreign jurisdiction where it was received. The rate at which the foreign income was taxed can be different from the headline tax rate.
- The highest corporate tax rate of the foreign jurisdiction from which the income is received is at least 15% at the time the foreign income is received in Singapore.
- The Comptroller is satisfied that the tax exemption would be beneficial to the person resident in Singapore.
(Income Tax Act.)
More details are available at www.iras.gov.sg.
24. Must the profits of a foreign subsidiary be imputed to a parent company that is tax resident in your jurisdiction (controlled foreign company rules)?
Singapore endorses the arm's-length principle for transfer pricing. Where the pricing of related-party transactions is not made at arm's length and results in a reduced profit for the Singapore taxpayer, the IRAS may adjust the profit of the Singapore taxpayer upwards.
The IRAS generally takes guidance from the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.
Imports
All goods imported into Singapore are regulated under the Regulation of Imports and Exports Act (Cap. 272A) and the Customs Act (Cap. 70). Generally, all goods (except investment precious metals or those that are imported into special zones for re-export) imported into Singapore are subject to goods and services tax at the rate of 7% of their taxable value. Taxable value includes the:
- Cost.
- Insurance and freight.
- Customs duty payable (if applicable).
- Commission and incidental charges to the sale.
- Delivery of the goods up to the port and place of importation.
It does not matter whether the person importing the goods is Goods and Services Tax- (GST) registered (section 8, Goods and Services Act).
The following types of imported goods are dutiable goods which are subject to customs and excise duties (the rates depend on the specific goods concerned):
- Intoxicating liquors.
- Tobacco products.
- Motor vehicles.
- Petroleum products.
(Section 10, Customs Act and Customs (Duties) Order.)
Certain dutiable goods are exempt from customs and excise duties if they are imported by persons and/or organisations listed in the Customs (Duties) (Exemption) Order.
Singapore has an extensive network of double tax treaties and limited treaties with more than 80 jurisdictions, including Australia, China, Indonesia, Japan, Malaysia, and the UK. For a complete list of the treaties, see www.iras.gov.sg/irashome/Quick-Links/International-Tax/.
Competition
28. Are restrictive agreements and practices regulated by competition law? Is unilateral (or single-firm) conduct regulated by competition law?
Competition Authority
Restrictive agreements and practices are governed by the Competition Act (Cap. 50B), which is administered and enforced by the Competition and Consumer Commission of Singapore (CCCS) (www.cccs.gov.sg) (formerly known as the Competition Commission of Singapore). The CCCS is a statutory body established under the Competition Act. The Competition Act has extra-territorial effects and can apply where any party to the restrictive agreements practices is outside Singapore, if there is or may be a sufficient anti-competitive effect within Singapore (section 33, Competition Act).
Restrictive Agreements and Practices
Any agreement between undertakings, decisions by associations of undertakings, or concerted practices are prohibited if their object or effect is the prevention, restriction, or distortion of competition in Singapore (section 34, Competition Act).
Examples of agreements, decisions, or concerted practices are those that:
- Directly or indirectly fix purchase or selling prices or any other trading conditions.
- Limit or control production, markets, technical development, or investment.
- Share markets or sources of supply.
- Apply dissimilar conditions to equivalent transactions with other trading parties, placing them at a competitive disadvantage.
- Make the conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of these contracts.
The following are excluded from the scope of the Competition Act:
- Agreements, decisions, or concerted practices that have a net economic benefit, despite being in breach of section 34 of the Act.
- Vertical agreements.
- Agreements relating to prescribed activities for example, rail services, supply of water, and operation of bank accounts.
- Agreements between undertakings that form a single economic unit.
(Third Schedule, Competition Act.)
Unilateral Conduct
No undertaking with a dominant position in Singapore is permitted to abuse its dominant position in any market, unless the matter falls within the Third Schedule of the Competition Act (section 47, Competition Act).
The same rules apply to undertakings based abroad. Dominant position means a dominant position within Singapore or elsewhere.
The prohibition in section 47 of the Competition Act does not apply where:
- The conduct relates to services of general economic interest.
- The conduct is needed to comply with legal requirements or to avoid conflict with international obligations.
- The conduct is necessary for exceptional and compelling reasons of public policy.
- There is a framework in place relating to competition which gives another regulatory authority jurisdiction.
(Third Schedule, Competition Act.)
CCCS Powers
The CCCS has certain powers of investigation if there are reasonable grounds for suspecting that prohibitions set out in the Competition Act have been infringed by any agreement, or if any prohibition will be infringed by any anticipated merger. It can require production of specified documents or information, enter premises without a warrant, or enter and search premises with a warrant.
Failure to comply or co-operate with the CCCS' investigations results in criminal sanctions. The offence is punishable with a fine not exceeding SGD10,000, or imprisonment for a term not exceeding 12 months, or both (section 83, Competition Act).
Where the CCCS finds the Competition Act has been infringed it can:
- Issue directions to bring the infringements to an end and, where necessary, require persons to take actions as specified in its directions to remedy, mitigate, or eliminate any adverse effects of the infringements and to prevent recurrence of the infringements.
- Impose a financial penalty for certain infringements where it is satisfied that the infringement was committed intentionally or negligently. However, the penalty cannot exceed 10% of the undertaking's turnover in Singapore for each year of the infringing period up to a maximum of three years.
(Section 69, Competition Act.)
Transactions Subject to Merger Control
Mergers that have resulted, or may be expected to result in a substantial lessening of competition within any goods or services market in Singapore are prohibited (section 54, Competition Act). Exempt mergers are those that:
- Are approved by any minister or regulatory authority under any written law.
- Are approved by the MAS under any written law.
- Are under the jurisdiction of any other regulatory authority under any written law.
- Involve any undertakings conducting the specified activities set out in paragraph 6(2) of the Third Schedule of the Competition Act.
- Where the economic efficiencies arising or that may arise from the merger outweigh the adverse effects due to the substantial lessening of competition in the relevant market in Singapore.
(Fourth Schedule, Competition Act.)
Mergers occur where:
- Two or more undertakings previously independent of each other merge.
- One or more persons or undertakings acquire direct or indirect control of the whole or part of one or more of the other undertakings. Control is acquired by any person or undertaking if they or it become(s) a holder of, or is empowered to exercise, the right to use all or part of the assets of an undertaking or exercise decisive influence in the composition, voting, or decision-making organs of an undertaking.
- Undertaking A acquires the assets (or a substantial part of the assets) of undertaking B resulting in undertaking A replacing (or substantially replacing) undertaking B in the business (or part of the business) in which undertaking B was engaged immediately before the acquisition.
The substantial lessening of competition is assessed qualitatively rather than quantitatively. The impact which a merger has on the competitive pressures within the market will be used to assess whether a merger substantially lessens competition. A merger is likely to be anti-competitive if either the merged entity has or will have a market share of:
- 40% or more.
- Between 20% and 40% and the post-merger combined market share of the three largest firms is at least 70%.
(CCCS Guidelines on the Substantive Assessment of Mergers 2016.)
These thresholds are only one of the factors which will be considered by the CCCS and do not give rise to a presumption that the merger substantially lessens competition. Similarly, market shares and concentration below these thresholds may still give rise to competition concerns.
The Competition Act outlines a process for parties seeking confidential advice from the CCCS on potentially anti-competitive mergers (section 55A, Competition Act).
Foreign-to-Foreign Acquisitions
The Competition Act applies to any merger or anticipated merger which will or may be expected to substantially lessen competition in any goods or services market in Singapore, regardless of whether the merger takes places inside or outside Singapore, or that any party to the merger is based outside Singapore.
Specific Industries
The following specified activities are not governed by the merger control regime:
- Supply of ordinary letter and postcard service.
- Supply of piped drinking water.
- Supply of wastewater management services.
- Supply of scheduled bus services.
- Supply of rail services.
- Cargo terminal operations.
(Paragraph 6(2), Third Schedule, Competition Act.)
In addition, mergers involving a bank incorporated in Singapore require the minister's prior approval (Banking Act).
Anti-Bribery and Corruption
The Prevention of Corruption Act (Cap. 241) (PCA) is the primary anti-corruption legislation and is applicable to both the public and private sectors.
A person is guilty of corruption when they (by themselves or in conjunction with any other person):
- Corruptly:
- solicit, receive, or agree to receive for themselves or for any other person; or
- give, promises, or offer to any person whether for the benefit of that person or of another person.
- Any gratification as an inducement to, or reward for, or otherwise on account of any person, to do, or forbear to do, anything in respect of any actual or proposed matter or transaction.
(Section 5, PCA.)
Gratification includes monetary incentives, employment, discharge of financial liabilities, services, favours, or advantages (section 2, PCA).
Other relevant legislation includes the:
- Penal Code (Cap. 224) which sets out penalties for offences involving public officials.
- Corruption, Drug Trafficking, and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A) which provides for the confiscation of benefits derived from corruption offences.
Intellectual Property
Patents
Definition and Legal Requirements. A patent is an exclusive right granted for the protection of inventions. The legislation governing patents is the Patents Act.
The criteria that must be satisfied for an invention to be patentable include the following:
- It must be novel.
- There must be an inventive step.
- It must be industrially applicable.
(Section 13, Patents Act.)
Registration. Applications for patent protection in Singapore must be filed at the Intellectual Property Office of Singapore (IPOS). Application for patent protection overseas under the Patent Co-operation Treaty must also be filed at the IPOS. For applications for patent protection overseas filed by any person resident in Singapore, written authorisation must be obtained from the Registrar of Patents or a patent application must first be filed in Singapore. Guidance on the application procedure can be found at www.ipos.gov.sg.
Enforcement and Remedies. Patents can be enforced by the patent proprietor (including co-owners) or the exclusive licensee of the patent by way of a civil patent infringement suit. Non-exclusive licensees and distributors cannot bring an action for patent infringement. The remedies provided for in the Patents Act include:
- Injunctions.
- Damages.
- Accounts of profits.
- Orders for delivery up.
- Orders for disposal.
- Declarations that the patent is valid and has been infringed by the infringer.
Length of Protection. A patent is protected on grant for a maximum of 20 years from the date of filing, subject to payment of annual renewal fees. To maintain the patent, the applicant must pay an annual renewal fee from the end of the fourth year from the date of filing, and every year after that until the patent expires.
Trade Marks
Definition and Legal Requirements. A trade mark is a sign used by a person in the course of business or trade to distinguish their goods or services from other traders. For a sign to be registrable under the Trade Marks Act (Cap. 332), it must be:
- Capable of being represented graphically.
- Distinctive.
- Capable of distinguishing the trader's goods and services from another trader's goods and services.
(Sections 2, 7,and 8, Trade Marks Act.)
It is not compulsory to register a trade mark to use it. A trade mark that is not registered can be protected by common law and the owner can rely on the common law action of passing off to seek relief against potential infringers.
Registration. Both national and international trade mark applications must be filed with the IPOS. Guidance on the application procedure can be found at www.ipos.gov.sg.
Enforcement and Remedies. The registered proprietor of a trade mark and exclusive licensees of a trade mark can bring a civil action for trade mark infringement. Non-exclusive licensees are also entitled to call on the registered proprietor to bring infringement proceedings. They can bring the proceedings in their own name as if they were the proprietor if the proprietor refuses to do so or fails to do so within two months of being called to do so. The remedies include:
- Injunctions.
- Damages.
- Accounts of profits.
- Orders for delivery up.
- Orders for disposal.
(Sections 31-34, Trade Marks Act.)
Length of Protection. A registered trade mark is valid for an initial period of ten years from the date of filing the application. Protection can be perpetual, subject to renewal of the trade mark every ten years and payment of the renewal fee.
Registered Designs
Definition. A registered design protects the features of shape, configuration, pattern, ornament, or colour of an article or non-physical product that gives that article or non-physical product its appearance (section 2, Registered Designs Act (Cap. 266)). Protection of colours must be combined with at least one other design feature. The two main criteria for registration are as follows:
- It must be novel (not registered in Singapore or published anywhere else in the world) and should not be disclosed prior to the filing of an application for protection.
- It must be capable of being industrially applied onto an article.
(Sections 2 and 5, Registered Designs Act.)
If disclosure of a design has been made, design protection can still be obtained in Singapore where the application is filed within 12 months from the date of disclosure (section 8A, Registered Designs Act).
Registration. An application for registration of a design can be filed at the IPOS. An international application designating Singapore can also be filed at the International Bureau of the World Intellectual Property Office. The design classification will apply to both national and international applications.
Enforcement and Remedies. Infringement proceedings can be taken by the registered owner (including co-owners), and exclusive licensees of a registered design. The remedies provided include:
- Injunctions.
- Damages.
- Accounts of profits.
- Orders for delivery up.
- Orders for disposal.
(Sections 36, 40 and 41, Registered Designs Act.)
Length of Protection. A registered design is valid for an initial period of five years and can be renewed for two further periods of five years. Therefore, the maximum term of protection is 15 years from the date of filing.
Unregistered Designs
Definition and Legal Requirements. If a design is registrable under the Registered Designs Act but is not registered, there is no protection for the unregistered design.
Enforcement and Remedies. Owners of unregistered designs that are registrable must seek protection through registration under the Registered Designs Act. There are no rights or remedies available to owners of unregistered designs.
Length of Protection. There is no protection for unregistered designs.
Copyright
Definition and Legal Requirements. Copyright protects the expression of ideas and not the idea itself. Copyright can only exist by virtue of the Copyright Act (Cap. 63).
The requirements for copyright protection are as follows:
- There exists a work on which the law confers protection.
- There is a connecting factor between the author of the work or the work itself and Singapore.
- The work is represented in some material form.
- The work is original.
(Section 27, Copyright Act.)
Protection. Protection arises on creation and expression of work in a tangible form (sections 26 and 27 Copyright Act). No registration is needed for enforcement and/or recognition of the right. A copyright work created by a Singapore citizen or resident is protected in overseas countries by virtue of international agreements. The Copyright Act is currently being reviewed and reforms are expected.
Enforcement and Remedies. Copyright owners can bring copyright infringement proceedings. The remedies include:
- Injunctions.
- Damages.
- Accounts of profits.
- Statutory damages in lieu of damages or accounts of profits.
(Section 119, Copyright Act.)
In addition, there are criminal penalties where the manufacture, sale, possession, importation, or distribution of infringing copies is involved.
Length of Protection. The duration of protection varies depending on the nature of the work in question.
Other
Other IP rights include:
- Protection of plant varieties.
- Protection of a layout design of an integrated circuit.
- Geographical indications.
- Protection of confidential information and trade secrets.
The Intellectual Property (Dispute Resolution) Act 2019 seeks to strengthen Singapore's position as a hub for IP dispute resolution. It partially came into force on 21 November 2019. Disputes relating to intellectual property can now be arbitrated in Singapore. An arbitral award has effect only on the parties to the arbitration and not against the world. This clarity facilitates the use of arbitration in IP disputes and increases the attractiveness of Singapore as an arbitration venue and hub for IP dispute resolution.
Marketing Agreements
Agency
There is no specific legislation regulating general agency arrangements. However, there is legislation prohibiting casino marketing arrangements involving the participation of any Singapore citizen or permanent resident under the Casino Control Act (Cap. 33A).
Distribution
There is no specific legislation regulating distribution agreements. However, there is legislation regulating the distribution of specific goods, for example tobacco.
Franchising
There is no specific legislation regulating franchising arrangements. There are no requirements in Singapore for franchises or franchise agreements to be registered. Restrictive covenants in franchising agreements are subject to the same principles generally applicable to restrictive covenants in contractual agreements. There are no legally mandated pre-contractual disclosure obligations for franchising parties.
E-Commerce
The relevant laws regulating e-commerce are the:
- Electronic Transactions Act (Cap. 88). This Act recognises the validity of electronic records, signatures, and contracts formed by electronic communication and sets out the liabilities of network service providers. Parties can agree to exclude the use of these electronic records, communications, or signatures in the contract or transaction. The Act does not apply where there are specific rules of law governing writing or signing, including for wills, contracts for sale of immovable property, declarations of trust, and powers of attorney. This Act was amended in February 2021 to adopt modifications to the United Nations Model Law on Electronic Transferable Records and to make it consistent with the United Nations Convention on the Use of Electronic Communications in International Contracts.
- Spam Control Act (Cap. 311A). This Act prohibits sending bulk unsolicited commercial electronic messages to instant message accounts, email addresses, and mobile telephone numbers that are randomly generated or obtained through harvesting software. Electronic messages do not include voice calls. Cold calls made by telemarketers therefore do not fall within the scope of the Act.
- Computer Misuse Act (Cap. 50A). This Act makes provision for securing computer systems against unauthorised access or modifications.
- Cybersecurity Act 2018. This Act regulates individuals and businesses who own or manage computer systems located wholly or partly in Singapore necessary for the continuous delivery of essential services .
- Personal Data Protection Act 2012 (PDPA). This Act regulates the protection of personal data stored in both electronic and non-electronic formats. This Act also provides for the creation of a Do Not Call Register that prohibits organisations from sending unsolicited commercial messages to registered Singapore telephone numbers. It prohibits sending electronic messages with a Singapore link to telephone numbers obtained using dictionary attacks or address harvesting software.
The relevant laws do not distinguish between online selling to customers (business-to consumer) and online selling to businesses (business-to-business).
There is no specific legislation which regulates the use of online platforms for marketing or sales purposes.
However, there are codes of practice and guidelines that apply to advertising on online platforms, for example the Guidelines on Interaction Marketing Communication & Social Media and the Singapore Code of Advertising Practice (see Question 35).
Advertising
Digital Advertising
The advertising industry is self-regulated. The Advertising Standards Authority of Singapore, a non-government body, issued a Code of Advertising Practice to regulate:
- Commercial advertising in all its forms.
- Media (including advertisements using information network services, online databases, and internet services).
The basic premise of the code is that all advertisements must be legal, decent, honest, and truthful.
The guidelines on Interaction Marketing Communication & Social Media were issued in 2016 to better protect Singapore consumers and to enable them to make well-informed choices about products and services viewed on digital and social media. The guidelines focus on:
- Imposing minimum disclosure standards for sponsored messages and commercial relationships.
- Prohibiting false reviews.
- Requiring the offer and conditions to be communicated in clear terms.
Compliance with the code and the guidelines is purely voluntary and its effective enforcement relies heavily on the co-operation of members of the industry. However, non-compliance with the code and the guidelines can result in industry-level sanctions including being instructed to amend or withdraw marketing content, withholding of advertising space, and withdrawal of trading privileges.
Legislation that can impact advertisements includes the:
- Consumer Protection (Trade Description and Safety Requirement) Act (Cap. 53).
- Consumer Protection (Fair Trading) Act (Cap.52A).
Advertisers are also subject to common law principles (for example, defamation and false representation) and intellectual property laws (see Question 31).
Direct Marketing
The sending of unsolicited electronic commercial communications is regulated by Part IX of the PDPA and the Spam Control Act (Cap. 311A).
The PDPA, Part IX:
- Provides for the creation of a Do Not Call Register and prohibits organisations from sending unsolicited electronic commercial messages to Singapore telephone numbers registered on the Do Not Call Register.
- Prohibits the sending of unsolicited electronic commercial messages with a Singapore link to telephone numbers obtained using dictionary attacks and address harvesting software.
- The Spam Control Act regulates the sending of bulk unsolicited commercial electronic messages to instant messaging accounts, email addresses, or mobile telephone numbers. It provides that persons must ensure that an unsolicited commercial electronic message contains:
- A valid, legitimately obtained email address, internet location address, telephone number, facsimile number, or postal address that recipients can use to submit an unsubscribe request. If the recipient received the original message by email, the message must include an email address for submitting unsubscribe requests. If the recipient received the original message by text or multi-media, the message must include a mobile telephone number for submitting unsubscribe requests.
- A clear and conspicuous statement, in English and any other desired language, that the recipient can use any method of communication provided in the unsolicited commercial electronic message to submit an unsubscribe request.
- The following labels:
- a title in the subject field, if any, that is not false or misleading as to the message's content;
- the letters "ADV" with a space before the title in the subject field, or if there is no subject field, in the words first appearing in the message, to clearly identify that the message is an advertisement;
- header information that is not false or misleading; and
- an accurate and functional email address or telephone number the recipient can use to readily contact the sender.
(Second Schedule, Spam Control Act.)
For further information, see Data Protection in Singapore: Overview, Question 19 and Email Marketing Compliance: Singapore.
The Consumer Protection (Fair Trading) Act protects consumers against unfair practices, including pricing practices, for example, sales promotions and offers. The CCCS developed the Guidelines on Price Transparency which came into effect on 1 November 2020 and apply to all suppliers whether operating online or in physical stores. The guidelines provide clarity on the types of pricing practices which could potentially infringe the Consumer Protection (Fair Trading) Act, for example
- Drip pricing, where a headline price which omits mandatory charges and pre-ticked optional add-ons in the advertised price (which would result in a higher final price) is displayed.
- Misleading price comparisons, for example, stating that a competitor's price is higher when that is not the case or comparing prices of an older model with a competitor's newer model with better specifications.
- False advertising of the terms of discounts offered.
- Inaccurate use or false representation of the term free.
(Second Schedule, Consumer Protection (Fair Trading) Act.)
The conduct of free prize draws (or public lotteries) for the purpose of promoting the sale of any product or service is regulated by the Common Gaming Houses Act (Cap. 49). These lucky draws must comply with specified conditions including but not limited to the following:
- The methodology of the promotion, details of the prizes to be distributed, their manner of distribution, and the time, date, and place of the draw must be disclosed in printed publicity material and must be sent to the Singapore criminal investigation department at least four weeks prior to the launch.
- If the total value of the prizes exceeds SGD10,000, the information must be published in a newspaper.
- The participants must not be required to pay any money apart from payment for the product or service purchased and any increase in the cost of the product or service marketed must not be attributable to the cost of conducting the lottery.
(Paragraph 3, Common Gaming Houses (Exemption) Notification.)
If a business organisation conducts lucky draws or public lotteries and invites participation through the internet, telephone, television, radio, or other means of remote communication, the organisation can face liability under section 8 of the Remote Gambling Act 2014.
Data Protection
37. Are there specific data protection laws? If not, are there laws providing equivalent protection?
Data Protection Laws
Personal data in Singapore is protected under the PDPA.
The PDPA has two main divisions:
- Do not call provisions (enabling people to opt out of unsolicited marketing communications) and prohibiting the sending of unsolicited electronic commercial messages with a Singapore link to telephone numbers obtained using dictionary attacks and address harvesting software.
- Data protection provisions.
The data protection provisions contain the following main obligations:
- Openness. To make information about an organisation's data protection policies, practices, and complaints process available on request.
- Consent. To only collect, use, or disclose personal data when an individual has consented and to allow individuals to withdraw consent.
- Purpose Limitation. To only collect, use, or disclose personal data about an individual for the purpose covered by the consent.
- Notification. To notify individuals of the purposes for which the organisation intends to collect, use, or disclose their personal data on or before its collection, use, or disclosure.
- Accuracy. To ensure that the personal data collected is reasonably accurate and complete.
- Protection. To make security arrangements to protect the personal data collected and implement controls to prevent unauthorised access, collection, use, disclosure, or similar risks.
- Retention Limitation. To cease retention of personal data or remove the means by which the personal data can be associated with particular individuals when it is no longer necessary for any business or legal purposes.
- Transfer Limitation. To transfer data to another country according to the requirements set out under the regulations, ensuring that the standard of protection provided to the transferred data will be comparable to the protection given under the PDPA.
- Access and Correction. On request, to provide an individual with information about the ways in which their personal data has been used or disclosed in the past year. To correct any error or omission to an individual's personal data on request.
The PDPA was recently amended by the Personal Data Protection (Amendment) Bill 2020. The amendments introduce a data portability obligation to transmit on request an individual's applicable personal data (in electronic form) to another organisation in Singapore or in a prescribed foreign country or territory. However, the relevant provisions introducing this obligation have yet to come into effect.
Consumer Privacy Laws
There are no laws specifically dealing with consumer privacy apart from the PDPA.
The PDPA has also been amended to empower businesses to use personal data without consent for business improvement purposes (for example, to improve or develop new products and services, analyse customer preferences, or provide personalised services), if the purpose cannot be achieved without using the personal data in an individually identifiable form and the use is one that a reasonable person would consider appropriate in the circumstances.
Product Liability
There is no single comprehensive piece of legislation governing product liability and product safety.
Product liability claims are governed by common law which can be based on contract or tort law, and various statutes for example the:
- Sale of Goods Act (Cap. 393).
- Supply of Goods Act (Cap. 394).
- Unfair Contract Terms Act (Cap. 396).
- Consumer Protection (Fair Trading) Act.
- Consumer Protection (Trade Descriptions and Safety Requirements) Act (Cap. 53).
- There is also specific regulation for certain industries or sectors, contained in the following statutes:
- Sale of Food Act (Cap. 283).
- Medicines Act (Cap. 176).
- Health Products Act (Cap. 122D).
- Wholesome Meat and Fish Act (Cap. 349A).
Regulatory Authorities
39. What are some of the key regulatory authorities relevant to doing business in your jurisdiction?
Competition
Main Activities. The CCCS is tasked with enforcing the Competition Act, which prohibits anti-competitive activities including abuse of dominance, anti-competitive agreements, and mergers that substantially reduce competition. In enforcing the Competition Act, the CCCS can conduct investigations, judge activities as anti-competitive, and impose fines on those found to have infringed the Act.
Environment
Main Activities. The National Environmental Agency (NEA) is a statutory board under the Ministry of Sustainability and the Environment. The NEA has two regulatory roles:
- It manages environmental public health by enforcing laws against littering and smoking, and ensuring compliance with sanitation and vector control standards.
- It protects the environment by putting in place measures to monitor, reduce, and prevent environmental pollution.
Financial Services
Main Activities. The MAS regulates the financial industry. This includes the payments, banking, insurance, and capital markets sectors. It is empowered by legislation to exercise oversight and control over financial institutions' activities. It does so by issuing directions, codes, and notes. These instruments set out rules at various levels of specificity, and differ from one another in terms of their legal effect. The MAS also issues guidelines which detail the best standards which financial institutions are encouraged to work towards.
Accounting and Corporate Regulation
Main Activities. The ACRA is the regulator of business registration, financial reporting, public accountants, and corporate service providers. It established and administers a repository of documents and information relating to business entities, public accountants, and corporate service providers. It provides public access to these documents and this information.
Employment
Main Activities. The Ministry of Manpower is the regulator of employment related issues. It is tasked with handling applications for foreign persons' work passes, and applications relating to work injury compensation, certification, registration, and accident reporting. It also issues guidance relating to employment practices.
Tax
Main Activities. The IRAS is the government's main tax administrator. It collects taxes that account for about 70% of the government's operating revenue, supporting Singapore's economic and social programmes to achieve quality growth and an inclusive society. The IRAS represents the government in tax treaty negotiations, drafts tax legislation, and provides the government with property valuation advice. The IRAS also supports the government in distributing various grants to enterprises.
Contributor profiles
Lee Soo Chye, Partner
Wee Swee Teow LLP
T +65 6854 3161
F +65 6534 3313
E [email protected]
W www.wst.com.sg
Professional Qualifications. Singapore, Advocate and Solicitor
Areas of Practice. Conveyancing and real estate; corporate and commercial law; employment law; estate and succession planning; immigration law; information technology law; intellectual property law; landlord and tenant law; probate and administration of estates.
Non-Professional Qualifications. LLB (Hons), National University of Singapore
Recent Transactions
- Representing banks, listed companies, private companies and individuals, both local and overseas. Working extensively with foreign counsel in multi-jurisdictional matters.
- Advising clients in initial public offerings, reverse takeovers, and mergers and acquisitions including management buyouts, debt restructuring, shareholder matters and succession planning for businesses. Successfully assisted clients in applications to government agencies for grants and incentives under the various government schemes.
- Acting for both retail and corporate clients in real estate transactions and advising on the structuring of real estate transactions, such as divestment of land through the grant of leasehold estates from freehold estates.
- Advising clients in succession and estate planning and estate administration including advice on wills and trusts and the use of trusts as an instrument to address client-specific needs.
Languages. English, Mandarin, Teochew (dialect)
Professional Associations/Memberships. Commissioner for Oaths, Singapore; Notary Public, Singapore; Member, Law Society of Singapore; Member, Singapore Academy of Law; Member, Singapore Institute of Directors.
Jacqueline Teo, Partner
Wee Swee Teow LLP
T +65 6854 3167
F +65 6534 3294
E [email protected]
W www.wst.com.sg
Professional Qualifications. Singapore, Advocate and Solicitor
Areas of Practice. Corporate and commercial law; landlord and tenant law; employment law; insolvency and bankruptcy law; family and matrimonial law; probate and administration of estates.
Non-professional Qualifications. LLB (Hons), National University of Singapore
Recent Transactions. Acting for private companies and individuals in diverse transactions, both in Singapore and other jurisdictions, including loan financing, joint ventures and shareholders agreements, sale and purchase of shares and distribution agreements.
Languages. English and Mandarin
Professional Association/Memberships. Member, Law Society of Singapore; Member, Singapore Academy of Law.
Sheam Zenglin, Senior Manager (Legal)
Wee Swee Teow LLP
T +65 6532 2966
F +65 6534 3294
E [email protected]
W www.wst.com.sg
Non-Professional Qualifications. LLB (Hons), University of London
Recent Transactions
- Acted as company secretary for several private companies.
- Assisted in various major real estate projects including the purchase of a collective sale of a project with more than 400 units, and the sale of developments of more than 500 units and 1,000 units respectively.
- Assisted in the review of agreements, such as employment agreements, lease agreements and so on.
Languages. English, Mandarin