Understanding CSPs and the New Regulatory Landscape in 2025

What is a Corporate Service Provider (CSP)?

A Corporate Service Provider (CSP) is an individual or entity that offers essential business support services to companies, such as incorporation, business address provision, nominee directorship, and statutory compliance support. These services are critical for businesses, especially startups and foreign entities setting up in Singapore.

As the corporate ecosystem grows more complex, regulators are placing greater emphasis on transparency and accountability. In 2025, Singapore has introduced stricter compliance measures to ensure CSPs operate with integrity and reduce the risk of misuse for illegal activities such as money laundering and terrorism financing.

New Regulatory Changes: What You Need to Know

The Accounting and Corporate Regulatory Authority (ACRA) has rolled out a set of updated requirements that all CSPs must follow. Here are the key highlights:

1. Defining “By Way of Business”

An individual is considered to be offering CSP services "by way of business" if they meet any of the following:

• A business is set up with the intent of providing these services.
  
  
• The services are advertised or referrals are actively received.
  
  
• The services are carried out for financial gain.
  
  
• Activities are performed with system and continuity.
  
  

This means that even informal or freelance providers may now fall under regulatory scrutiny if they meet these criteria.

2. Mandatory Live Video Calls for Remote Transactions

If incorporation or sale of shelf companies is done remotely (i.e., the customer is not physically present), CSPs must now conduct a live video call with:

• A proposed director (other than a nominee),
  
  
• A member holding at least 50% of voting rights, or
  
  
• An authorised representative if the member is a legal entity.
  
  

This helps verify identity and intent, closing gaps that bad actors could exploit.

3. Strengthened Customer Due Diligence (CDD)

CSPs must now enforce comprehensive CDD measures that include:

• Identifying and verifying customers and beneficial owners.
  
  
• Understanding the nature and purpose of the business relationship.
  
  
• Screening for risks linked to Money Laundering (ML), Terrorism Financing (TF), and Proliferation Financing (PF).
  
  

If CDD cannot be completed, CSPs must:

• Decline the service,
  
  
• Terminate existing relationships, and
  
  
• Consider filing a Suspicious Transaction Report (STR) within 5 business days.
  
  

4. Third-Party Reliance for CDD

CSPs may rely on third parties such as:

• Advocates and solicitors,
  
  
• Public accountants,
  
  
• Financial institutions, or
  
  
• Related companies (e.g., subsidiaries, branches).
  
  

However, the responsibility for ensuring CDD compliance still lies with the CSP.

5. Registered Office / Business Address Services

To align with global compliance standards, CSP registration is now required when offering:

• Registered Office Addresses (under Section 142 of the Companies Act),
  
  
• Business Addresses, or
  
  
• Correspondence Addresses.
  
  

This includes virtual and shared offices, which have become increasingly common. If you're providing such services without a license, you may now fall under regulatory penalties.

6. Weaknesses Found in CSP Practices

According to ACRA, common weaknesses include:

• Inadequate risk assessment,
  
  
• Neglecting to verify beneficial ownership,
  
  
• Poor or outdated documentation, and
  
  
• Failure to retain proper records.
  
  

7. Good Practices to Adopt

To remain compliant, CSPs should:

• Screen all parties via commercial databases,
  
  
• Collect and verify identity documents (including beneficial owners),
  
  
• Retain copies of valid government-issued IDs,
  
  
• Maintain updated records, and
  
  
• Document reasons for any exceptions or issues.
  
  

Stay Compliant with Expert Help

Whether you're offering nominee directorships, business address services, or company incorporation, regulatory compliance is now more critical than ever.

If you're unsure how to meet the new standards or need help setting up your CSP operations in line with ACRA's regulations, JWC Accounts & HR is here to guide you.

With deep expertise in compliance, business structuring, and statutory reporting in Singapore, we help you stay ahead—safely and legally.

👉 Talk to JWC Today
Visit jwc.com.sg to get started.