Know Your Customers (KYC) Requirements

Know Your Customer (KYC) requirements are critical for setting up a corporate bank account in Singapore. KYC is a regulatory and legal framework aimed at preventing money laundering and terrorist financing. Banks and financial institutions are required to rigorously verify the identity of their clients and understand the nature of their business activities. Here’s a detailed look at the KYC requirements for opening a corporate bank account in Singapore:

1. Identity Verification of Key Individuals:

Directors and Shareholders: Banks require identification documents such as passports or National Registration Identity Cards (NRICs) for Singapore residents, for all directors and significant shareholders (typically those holding 10% or more of the company's shares).

Ultimate Beneficial Owners (UBOs): Identification of individuals who ultimately own or control the company. This is especially important for companies with complex ownership structures.

2. Verification of the Business and Its Activities:

Company’s Business Profile: Obtained from the Accounting and Corporate Regulatory Authority (ACRA), including details like the company’s registration number, business activities, and information on directors and shareholders.

Business Licenses and Permits: Depending on the nature of the business, relevant business licenses or permits must be presented.

Proof of Business Operations: Documents such as contracts, invoices, or business plans may be requested to demonstrate the nature and legitimacy of the business operations.

3. Information on Source of Funds:

Financial Statements: To understand the financial health of the business.

Bank Statements: Previous bank statements can be requested for an insight into the company’s financial transactions.

Explanation of Source of Funds: For initial deposits and ongoing business transactions, especially for businesses in high-risk industries or with complex structures.

4. Company’s Constitution or Memorandum and Articles of Association (M&AA):

This document provides insight into the company's internal governance and operational framework.

5. Board Resolution:

A document from the company's board of directors authorizing the opening of the account and designating the individuals who have the authority to operate the account.

6. Compliance with Enhanced Due Diligence (EDD):

For companies that pose a higher risk, such as those involved in international transactions or operating in high-risk jurisdictions, banks may conduct EDD, which requires additional information and checks.

7. Ongoing Monitoring and Updating:

KYC is an ongoing process. Businesses are required to update their information with the bank, especially if there are significant changes in their structure, ownership, or business activities.