How do you see compliance and governance changing in Singapore? According to you, what are the recent major milestones in Singapore in this context?
Singapore has established her position as a key financial hub in the global economy, and is one of the most well known offshore banking locations alongside Switzerland. Being home to millions of accounts and an exceptionally high volume of foreign wealth makes it necessary to have stringent compliance policies and tax rules in Singapore. In addition, the need for internationally accepted standards has emerged as a high priority following major crackdowns on tax evasions within overseas banks over the past few years.
Singapore recently became the first ASEAN country to comply with the Foreign Account Tax Compliance Act (FATCA), which was introduced as a means of combating tax evasion. It requires participating countries and financial institutions to share information about overseas accounts with relevant agencies such as the Internal Revenue Service (IRS).
Complying with FATCA is a major milestone for Singapore, and is consistent with its efforts to become more transparent and aligned with global compliance standards. Adhering to FATCA also further reassures both investors and governing bodies worldwide of Singapore's continuous commitment to eradicating tax evasion.
However, being FATCA-compliant requires financial institutions to implement new reporting systems and processes, and implement stronger due diligence and compliance measures. These initiatives are complex, time-consuming and likely to generate significantly higher compliance costs.
This is where the benefits of process outsourcing come into play - by engaging with specialist business process and compliance service providers, financial institutions can reduce time spent managing these processes and procedures, and can instead focus on value-generating activities. This way, compliance standards can be met and increases in business efficiency and competitiveness can be gained.