Note: The Corporate Service Providers Act 2024 and its subsidiary regulations took effect in Singapore on 9 June 2025. The related Companies and Limited Liability Partnerships (Miscellaneous Amendments) Act took effect on 16 June 2025. Together, they mark a new era of stricter regulation and greater transparency for the corporate-services industry.
The Act introduces mandatory registration for corporate service providers (CSPs), a systematic anti-money laundering (AML), counter-terrorist financing (CFT) and proliferation-financing (PF) framework, and tighter restrictions on nominee directors. Secretarial firms, service businesses, high-net-worth families with cross-border holding structures and corporate executives should all review their arrangements.
This article explains the core requirements of the CSP Act and provides practical compliance suggestions.
01 Mandatory registration: corporate services must be provided by a registered CSP
The Act requires every person or entity providing corporate services in or from Singapore to register with the Accounting and Corporate Regulatory Authority (ACRA) as a CSP.
“Corporate services” include:
- Incorporating a company for a client;
- Acting, or arranging for another person to act, as a director or nominee shareholder;
- Providing a registered office or business address;
- Acting or assisting as company secretary, or conducting business transactions with ACRA as a secretary; and
- Handling statutory activities related to accounting services on behalf of a client.
Providing corporate services without registration is a criminal offence punishable by a fine of up to S$50,000, imprisonment for up to two years, or both. A continuing offence may attract an additional fine of up to S$2,500 per day.
02 Compliance duties: CSPs must meet AML/CFT/PF obligations
Once registered, a CSP must implement the following obligations:
- Customer due diligence (CDD)
Before providing services, a CSP must conduct background checks. Enhanced due diligence is required where a client comes from a high-risk country or industry, or has a complex ownership structure. The results must be documented and reviewed at least annually.
- Risk-assessment mechanism
CSPs must conduct regular comprehensive risk assessments covering the nature of the business, fund flows, the controller structure and other potential AML/CFT/PF risks.
- Internal controls
A CSP must establish a complete compliance framework covering:
- Risk assessment and classification;
- Due diligence and customer-information updates;
- Suspicious Transaction Report (STR) procedures;
- Employee training and periodic review; and
- Internal audit and compliance-management arrangements.
Failure to perform these duties may result in a fine of up to S$100,000 for each breach. Senior management may also bear liability if it fails to ensure compliance.
03 Nominee-director reform: nominal appointments carry legal responsibility
To curb fictitious governance arrangements, section 38 provides that a person who acts as a nominee director for profit must be arranged through a registered CSP and pass a “fit and proper” assessment.
The assessment may consider:
- Whether the person has been convicted of fraud, corruption, perjury or similar offences;
- Whether the person is an undischarged bankrupt;
- The person’s previous compliance record as a director; and
- Whether the person has the ability and judgment to perform the role.
Penalties include:
- Up to S$10,000 for an individual who improperly acts as a nominee director; and
- Up to S$100,000 for a CSP that fails to carry out the assessment.
In Public Prosecutor v Zheng Jia [2025] SGHC 76, the Singapore High Court further confirmed that systematically arranging nominee directors without performing supervision duties may constitute a criminal offence. “Signing only and accepting no responsibility” is no longer tolerated.
04 High-risk customers: identification and compliance measures
A CSP should apply due-diligence measures proportionate to the customer’s risk level. Enhanced due diligence is required for customers identified as high risk.
High-risk circumstances commonly include:
(a) Complex or unusually large transactions, or unusual transaction patterns with no clear economic or lawful purpose; and
(b) A customer from a country or region identified as high risk, where the CSP provides or plans to provide corporate services or has an established business relationship.
Recommended measures include senior-management approval of the establishment or continuation of the relationship, stronger verification of identity and source of funds, more frequent transaction monitoring and regular updates of customer information. Screening against international sanctions lists should also be conducted.
05 Outsourcing is permitted, but liability cannot be outsourced
A CSP may entrust parts of its due-diligence work to qualified third parties, including:
- Licensed lawyers;
- Public accountants;
- Financial institutions; and
- Compliance entities within the same group.
However, outsourcing does not relieve the CSP of responsibility. The CSP remains ultimately responsible for the integrity and compliance of the due-diligence process and must retain complete records.
06 How should companies and executives respond?
- Check whether registration as a CSP is required
Where the business involves a registered-address service, director arrangements or secretarial services, registration should be completed promptly.
- Establish an AML/CFT/PF framework
Design due-diligence, risk-classification and suspicious-transaction reporting procedures under the new rules and document the internal controls.
- Strengthen director fitness-and-propriety reviews
Nominee-director arrangements must undergo compliance assessment and CSP filing to prevent risks from reaching executives or shareholders.
- Clarify executive compliance duties
Directors and senior executives should periodically review the operation of the compliance framework, fulfill their supervisory responsibilities and reduce personal exposure arising from management failures.
Conclusion
The CSP Act is not merely a compliance reform; it changes the way companies must think about governance. The shift is from “formal legality” to substantive responsibility and from passive filing to active compliance. All participants in corporate services must make structural adjustments.
Whether a business is a secretarial firm, a holding platform or an SME, it should take the risks and opportunities of the new rules seriously. Rather than waiting for penalties and then correcting the problem, companies should review their Singapore structures and service arrangements now. Early compliance supports long-term stability.
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This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.