Singapore’s new Corporate Service Providers (CSP) Bill, passed in July 2024 and set to take effect soon, introduces stricter regulations to combat money laundering, terrorism financing, and proliferation financing. As the country’s streamlined business processes continue to attract foreign investment, illicit actors are finding new ways to exploit these systems. Under the new law, CSPs must register formally and carry out customer due diligence, ensuring they identify and report suspicious transactions. If a client fails to comply with these checks, the service provider is obligated to terminate services and report the matter to authorities.

The bill is a direct response to a national risk assessment, which identified fraud and misuse of legal entities, like shell companies, as major threats to Singapore’s financial integrity. Recent cases have highlighted the role CSPs can play in facilitating illicit activities, such as money laundering through nominee director services. The new regulations target high-risk transactions, including real estate deals and the management of legal entities. With penalties for non-compliance including hefty fines and imprisonment, the bill aims to reduce the risks posed by CSPs while ensuring Singapore remains a secure and attractive environment for legitimate business.