Audit and Compliance in Singapore: A Guide for Foreign Investors

Posted by Written by Ayman Falak Medina Reading Time: 3 minutes
  • Singapore makes it obligatory for registered businesses to hold annual general meetings, file annual financial statements, and to be officially audited.
  • Businesses or business groups that are classified as ‘small’ are exempted from official audits.
  • Foreign investors should use the services of registered local advisors to ensure they stay compliant with the relevant regulations.

Singapore’s transparent business and legal system have made the island nation a popular destination for international companies to establish their regional headquarters.

In maintaining this vibrant business climate, the government has obliged certain businesses to adhere to its audit and compliance regulations. However, the country’s audit and compliance procedures are considerably less burdensome compared with its ASEAN peers, which is why Singapore is consistently ranked number one in the World Bank’s Ease of Doing Business index.

According to Singapore’s Companies Act, the primary legislation regulating the conduct of companies in the country, companies must comply with annual filing requirements of the Accounting and Corporate Regulatory Agency (ACRA), as well as the Inland Revenue of Singapore (IRAS).

Foreign investors should use the services of registered local advisors to ensure they stay compliant with the relevant regulations.

Determining the financial year-end

All companies in Singapore should determine a financial year-end (FYE) (that is, the last day of the company’s first financial year) after incorporation. Many companies choose December 31 for their FYE while others have chosen the end of any quarter (March 31, June 30, and September 30).

In deciding an FYE, companies should consider whether the chosen date affects their eligibility to receive tax incentives. Starting in 2020, qualified new companies can receive a 75 percent tax exemption on the first S$100 thousand (US$73 thousand) of chargeable income during the first three consecutive years. There is a 50 percent tax exemption on the next S$100 thousand.

For certain companies, it is, therefore, more advantageous to have December 31 as their fiscal year-end date.

Who is obligated to be audited?

The Companies Act states that private limited companies must have their financial statements audited by a qualified public accountant at least once a year.

Annual general meeting

An annual general meeting (AGM) is obligatory for a Singapore company. The AGM can be held anywhere in the world, whereby the shareholders discuss the following items:

  • Approval of the audit reports;
  • Re-elect directors (if required);
  • Re-appointing auditors;
  • Declare dividends; and
  • Transact other business.

AGMs are to be held:

  • Once every year;
  • Within 15 months from the previous AGM; or
  • Six months from the FYE date.


Within three months of company incorporation, company directors must appoint an auditor, unless they fall under the following criteria:

  • Annual turnover is less than S$5 million (US$3,700,00);
  • The total number of shareholders is less than 20; and
  • All shareholders are individuals and not corporations.

The role of the auditor is to report if the company’s financial statements comply with the relevant financial reporting standards and to provide an objective analysis of the company’s financial performance. Additionally, only public accountants registered with ACRA can conduct company audits.

Audit exemptions

In July 2015, ACRA amended the Companies Act through the Small Company Concept. This amended the audit exemption criteria for businesses.

Companies that qualify as ‘small’ are exempted from having their accounts audited and from appointing an auditor. They first need to fulfil two of the three following criteria:

  • Total revenue must not exceed S$10 million (US$7,400,000);
  • Total number of full-time employees must not exceed 50; or
  • Total assets of the company should not exceed S$10 million (US$7,400,000).

Group company audits

Holding companies and their subsidiaries can also be exempt from audit compliance if they qualify as a ‘small group’. To qualify, the group (comprising of all the companies) should fall under two of the three criteria as written above for small companies.

Businesses that are exempt from audits are advised to prepare annual financial statements.

Annual filing requirements

Singapore’s authorities require companies to submit their year-end financial accounting. This accounting should include the following:

  • Statement of comprehensive income (profit and loss accounting);
  • Balance sheet;
  • Cash flow statement; and
  • Statement of changes in equity.

Penalties for non-compliance

Businesses that fail to hold an AGM and are late to file financial statements are at risk of fines, summons, and even an arrest warrant issued by ACRA.

ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in SingaporeHanoiHo Chi Minh City and Jakarta. Please contact us at or visit our website at