On June 9, 2025, Singapore will formally implement the Corporate Service Providers Act 2024 and the Corporate Service ProvidersRegulations 2025. This major legislative reform ushers in a new era of enhanced compliance, transparency, and oversight for Corporate Service Providers (CSPs) in Singapore.
As a global financial and offshore services hub, Singapore has long attracted companies to establish entities and conduct cross-border business. Licensed CSPs support clients by incorporating companies, providing registered addresses, appointing nominee directors or secretaries, and managing accounting and compliance tasks.
However, the discreet and cross-border nature of such services can create loopholes for illegal activities like money laundering, tax evasion, and asset concealment. This new legislation aims to assign clearer compliance responsibilities to CSPs and bring previously unregulated services into comprehensive regulatory framework.
1. Mandatory Licensing for Corporate Service
The CSP Act mandates that any entity offering corporate services in or from Singapore must register with ACRA as a licensed Corporate Service Provider.
The scope of “corporate services” is broad and includes:
· Incorporation of companies or legal entities on behalf of clients
· Acting as or arranging nominee directors, company secretaries, or partners
· Providing registered or business addresses
· Arranging nominee shareholders (excluding those listed on approved exchanges)
· Performing accounting-related designated activities
· Transacting electronically with ACRA on behalf of clients
Notably, the Act now covers providers who do not directly interact with ACRA. For example, firms offering nominee directors or registered addresses to foreign clients, even without handling filings, must now register.
Entities providing such unregistered services face penalties under Section 7 of the Act:a fine up to SGD 50,000, up to 2 years’ imprisonment, or both. Continuing violations may lead to additional fines of up to SGD 2,500 per day.
Current Registered Filing Agents (RFAs) will automatically transition into CSPs for the duration of their existing registration. Non-RFA CSPs must complete registration within six months, by December 9, 2025.
2. Strengthened AML/CFT/PF Compliance and Executive Accountability
The new Act mandates that CSPs adhere to strict Anti-Money Laundering (AML), Counter-Financing of Terrorism (CFT),and Proliferation Financing (PF) obligations. Previously only applicable to RFAs, these duties are now compulsory for all licensed CSPs.
According to Sections 16, 17, 29, and 30, CSPs must perform Customer Due Diligence (CDD) before offering any service. This includes verifying identity, screening against UN sanction lists, and assessing transaction risk.
CSPs must also establish group-wide compliance frameworks, ensure internal data sharing, and regularly update AML/CFT measures. PF screening — newly introduced — must be based on the United Nations Act 2001, with further sources outlined in subsidiary legislation.
Non-compliance may result in fines up to SGD 100,000 per breach, applicable to both the CSP entity and senior executives (e.g., CEO or compliance officer).
Although CSPs may outsource CDD to lawyers, accountants, or financial institutions, final liability remains with the CSP.
3. Regulation of Nominee Directors and Shareholders in Singapore
One of the most significant reforms targets the nominee director system, long used to obscure beneficial ownership.
Under the Act, any individual acting as a nominee director for commercial purposes must:
· Be appointed through a licensed CSP
· Pass a “fit and proper” test
ACRA’s criteria include criminal history, bankruptcy status, past compliance as a director, and capability to serve responsibly.
Violations include fines up to SGD 10,000 for individuals and SGD 100,000 for CSPs who fail to conduct due diligence (Sections 16 and 38).
This regulation turns CSPs from passive intermediaries into active compliance gatekeepers, preventing shell company abuse.
4. Disclosure Requirements and Increased Penalties for Non-Compliance
The Companies and Limited Liability Partnerships (Miscellaneous Amendments) Act 2024 introduces stricter disclosure rules. Companies and foreign entities must submit nominee director/shareholder data to ACRA for inclusion in a central register.
Public profiles will disclose nominee identities. Nominator details remain accessible only to government authorities for enforcement (e.g.,anti-money laundering investigations or tax audits).
Failure to maintain or submit accurate registers is now punishable by fines up to SGD 25,000, up from the previous SGD 5,000.
This raises the compliance burden for CSPs, emphasizing accurate record keeping, internal controls, and client communication.
3. Remote Identity Verification for CSP Transactions
Recognizing digital trends, the Act establishes remote identity verification rules for CSP-related transactions, such as:
- Company formation
- Ownership transfer
- Shell company sales
When the client is not physically present, CSPs must verify (via live video) at least one proposed director (excluding nominees), a shareholder with over 50% voting rights, or an authorized representative. Screenshots must be saved as records.
Directors must sign Form 45 personally; no proxy signing is allowed.
What This Means for Singapore’s CSP Industry
This reform reflects international standards, including FATF’s 2022 guidelines, and aligns Singapore with best practices from the UK, US, and Australia.
It introduces a new regulatory paradigm, one that elevates the importance of transparency, due diligence, and accountability across the board.
Key implications include:
- Pressure on small firms lacking compliance capacity to upgrade or exit
- Competitive advantage for CSPs with legal, tax, and risk expertise
- Necessity of partnerships with banks, law firms, and accounting firms
For foreign businesses setting up in Singapore, selecting a compliant, governance-capable CSP is no longer optional. It's a strategic necessity.
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