Following recent regulatory developments and in-depth technical sessions on the subject, we are issuing this update to summarise the key changes under the Corporate Service Providers Act 2024 and the evolving anti-money laundering (AML) landscape in Singapore.
This note consolidates critical information for corporate services practitioners and highlights areas requiring immediate attention.
1. Singapore’s Evolving Risk Profile and the FATF Focus
Singapore’s position as a global financial and trading hub exposes it to significant cross-border risks, including proceeds from foreign illicit activities. The Financial Action Task Force (FATF) is set to assess Singapore’s AML regime in August 2025, with a focus on the country’s understanding and mitigation of these risks.
Key money laundering (ML) threats identified include:
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Cyber-enabled fraud, with a high number of cases originating from foreign syndicates.
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Organised crime, particularly illegal online gambling involving layering of illicit funds across multiple jurisdictions.
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Tax crimes and corruption originating from abroad, leveraging Singapore’s reputation as a wealth management hub.
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Trade-based money laundering, an inherent threat given Singapore’s role as a trading and transportation hub.
2. The Corporate Service Providers Act: Scope and Registration
The CSP Act and its subsidiary legislation came into effect on 9 June 2025, with a six-month transition period for new entrants ending on 9 December 2025. A key change is the significant expansion of the scope of services that require registration with ACRA.
Registration is now required for any entity providing corporate services in or from Singapore, irrespective of whether they file transactions with ACRA. This captures activities beyond the previous Filing Agent framework.
Key activities triggering registration include:
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Designated Activities in conjunction with Accounting Services: An entity must register if it performs any of the following activities in relation to the provision of accounting services for the same client:
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Buying or selling real estate.
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Managing customer money, securities, or other assets.
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Managing bank, savings, or securities accounts.
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Organising contributions for the creation, operation, or management of corporations.
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Creating, operating, or managing legal persons/arrangements, or buying and selling business entities.
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Provision of Address Services: Registration is also required for providing:
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Registered Office (as defined under the Companies Act).
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Business Address at which a customer operates.
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Correspondence Address for written contact.
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Important Note on Landlord-Tenant Relationships: A landlord leasing out a dedicated physical space under a tenancy agreement is not required to register. However, providers offering a business address without a fixed physical space (e.g., virtual office providers) are within scope and must register. The nature of the arrangement must be clearly documented in the contract.
3. Enhanced Customer Due Diligence (CDD) Obligations
Registered CSPs are required to perform CDD measures before providing any corporate service. This includes:
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Identifying and verifying the customer and their beneficial owner(s).
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Obtaining information on the purpose and intended nature of the business relationship.
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Screening against relevant sanctions and watchlists.
Good Practices and Common Weaknesses:
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Good Practices: Screening against commercial databases, verifying government-issued IDs, and retaining copies.
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Common Weaknesses: Inadequate risk assessments, neglecting to identify beneficial owners, failing to verify customer particulars, and non-retention of CDD records for the mandatory five years.
If CDD cannot be completed, the CSP must decline to provide the service, terminate the relationship, document the reasons, and consider filing a Suspicious Transaction Report (STR).
4. Non-Face-to-Face Measures: Live Video Calls
To mitigate the risks of non-face-to-face transactions, the Act mandates specific measures:
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Incorporations and Sale of Shelf Companies: A live video call is required with at least one proposed director (excluding a nominee director) or a member holding at least 50% of the voting rights.
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This requirement cannot be substituted by third-party verification platforms or notarised documents.
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Director Appointments: When appointing a director who is not physically present, the CSP must ensure Form 45 is signed by the proposed director and retain a copy. The CSP cannot sign on behalf of the director.
5. New Requirements for Nominee Directors
A person cannot act as a nominee director “by way of business” unless their appointment is arranged by a registered CSP. The registered CSP is now responsible for conducting a “fit and proper” assessment of these nominees.
The assessment considers factors such as:
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Past convictions for fraud, dishonesty, or relevant offences.
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Previous conduct and compliance history, including any disqualifications or composition fines.
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Competency, capacity, and capability, including the number of existing directorships. Individuals with over 50 directorships warrant a closer assessment of capacity.
6. Suspicious Transaction Reports (STRs)
STRs are filed with the Suspicious Transaction Reporting Office (STRO) via the SONAR platform. Key deadlines include:
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STRs must be filed within five business days upon establishing suspicion.
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For higher-risk cases (e.g., terrorism financing, sanctions), reports must be filed within one business day, if not immediately.
Maintaining an active SONAR account is a critical compliance requirement.
7. Focus on the Wealth Management Sector
The wealth management sector is an area of increased regulatory focus due to its inherent risks. For higher-risk customers (including those in the Global Investor Programme and Single Family Offices), enhanced CDD is required. This includes establishing both the Source of Wealth (SOW) and the Source of Funds (SOF) for the customer and their beneficial owners. These checks apply regardless of the customer’s participation in tax incentive schemes or investment programmes.
8. Key Takeaways
We recommend that accounting firms undertake a review of their compliance frameworks against the new requirements, paying particular attention to:
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Scope of Registration: Assessing if all business entities within the group that provide relevant services are properly registered.
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Fit and Proper Assessments: Establishing a robust framework for assessing nominee directors.
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STR Preparedness: Ensuring that staff are trained to identify suspicious activity and that SONAR accounts are active and accessible for timely reporting.
This technical update serves as a guide for practitioners to align their practices with the current regulatory expectations under the new CSP Act.
Disclaimer: This technical note is for general guidance and informational purposes only and does not constitute professional advice. It is based on materials from a training session and should not be relied upon as a substitute for specific legal or compliance advice.