Singapore is strengthening its corporate governance framework with the introduction of the Corporate Service Providers (CSP) Act 2024. This legislation, set to take effect on 9 June 2025, alongside the Corporate Service Providers Regulations 2025 published on 8 May 2025, will bring significant changes for entities providing corporate services and the businesses that use them.
The primary aim of the CSP Act is to enhance transparency and bolster Singapore's regime for anti-money laundering (AML), countering the financing of terrorism (CFT), and preventing the financing of the proliferation of weapons of mass destruction (PF).
Key changes under the CSP Act 2024
- Mandatory ACRA Registration: All entities offering corporate services in or from Singapore must now register with the Accounting and Corporate Regulatory Authority (ACRA). This encompasses a range of services, including company formation, corporate secretarial services, and the provision of nominee director or shareholder services.
- Enhanced Compliance Obligations: Registered CSPs will be subject to more stringent AML, CFT, and PF obligations. A key component of this will be the requirement to conduct thorough customer due diligence.
- Stricter Nominee Director Regulations: The Act stipulates that only ACRA-registered CSPs are permitted to arrange nominee director appointments. Furthermore, CSPs must assess these nominees to ensure they are fit and proper. Individuals will no longer be able to act as nominee directors by way of business unless they are appointed by a registered CSP.
- Increased Disclosure Requirements: There will be a greater emphasis on transparency regarding nominee arrangements. The status of nominee directors and shareholders, along with the identities of their nominators, must be disclosed and filed with ACRA. Notably, this nominee status will be made publicly accessible.
- Harsher Penalties for Non-Compliance: The Act introduces significant financial penalties for breaches. CSPs or their senior management could face fines of up to S$100,000 per breach for failing to meet AML/CFT/PF obligations. Penalties for non-compliance with maintaining accurate registers of registrable controllers, nominee directors, and nominee shareholders will also be substantially higher.
Impact on businesses
Businesses that utilise corporate services in Singapore must be aware of these changes. They may be required to provide additional documentation to their CSPs, particularly concerning beneficial ownership or nominator details. Critically, businesses should ensure that their chosen corporate service provider is registered with ACRA to maintain compliance and avoid potential disruptions.
Navigating these new regulations is essential for all businesses operating in Singapore. Alpadis is committed to upholding the highest standards of corporate governance and can assist clients in understanding and adhering to these new requirements.
