Key Steps in Singapore Skincare Company Registration Audit You Must Know!

Translation

In the context of rapid development in the global skincare market, Singapore has become an increasingly popular choice for international companies to register and operate due to its stable environment, mature business system, and efficient services. Particularly in the skincare industry, more and more companies from China and other Asian countries are choosing to register their businesses in Singapore to better expand into the Southeast Asian and global markets. However, the importance of the audit process after company registration is often overlooked or underestimated. This not only affects regulatory compliance, but also directly impacts future financing, expansion, and even potential listing plans.

I. The Relationship Between Registration and Audit A Weak Foundation Leads to Tremors

Many companies focus heavily on obtaining business licenses, tax registration, and opening bank accounts during the registration process in Singapore, while neglecting the foundational role of auditing in the overall operation of the company. In fact, within 18 months of incorporation, Singaporean companies are required to submit financial statements and undergo their first audit, followed by annual audits and financial reporting thereafter. This is a mandatory requirement by the Accounting and Corporate Regulatory Authority ACRA, and the first step toward compliance.

According to a report by Lianhe Zaobao in September 2025, the number of companies penalized by ACRA for late submission of audit reports or non-compliant financial information has been rising annually. Many of these are Asian companies newly entering the market, which lack sufficient understanding of local regulations, thereby increasing compliance risks. This highlights that registration is only the beginning-auditing is the health check for long-term business operations.

II. Key Element One Choosing a Professional Audit Firm

Selecting the right audit firm is crucial when conducting company audits in Singapore. The country is home to many international accounting firms such as Deloitte, KPMG, Ernst Young, and PwC, as well as numerous local small and medium-sized firms. For startups or small-to-medium enterprises SMEs, choosing a local audit firm with expertise in the skincare industry and familiarity with the Asian market is especially important.

As reported by The Straits Times in July 2025, a Chinese skincare brand suffered setbacks during financing negotiations because it selected an audit firm unfamiliar with the industry’s characteristics. The audit failed to accurately reflect the brand's marketing investments and inventory turnover in the financial statements. This case illustrates that auditing is not just a compliance requirement-it is also a critical tool for demonstrating a company's true value to investors and partners.

III. Key Element Two Establishing a Robust Financial and Internal Control System

Auditing is not merely a retrospective review of financial data; it is also a comprehensive assessment of a company’s internal control systems. In the skincare industry, which involves raw material procurement, product inventory, cross-border logistics, and brand promotion, the complexity of financial management is high. Without a sound financial and internal control system, companies may not only face issues during audits, but also suffer from resource waste or financial losses in daily operations.

For example, in August 2025, a local Singaporean skincare brand was found to have unclear expense categorization during an audit due to chaotic internal approval procedures, which ultimately affected its annual profit report. This serves as a reminder that companies should establish clear financial classification systems during daily operations to ensure every expense is accurately tracked and categorized.

IV. Key Element Three Compliance Tax Filing and Transfer Pricing

While Singapore offers a relatively low tax rate, its tax regulatory framework is strict, especially regarding cross-border transactions. For skincare companies involved in importing raw materials from China or other countries, exporting finished products, or distributing overseas through a Singaporean entity, transfer pricing becomes a key concern. During audits, auditors pay particular attention to whether companies have reasonably priced related-party transactions in accordance with OECD guidelines and requirements from the Inland Revenue Authority of Singapore IRAS.

In June 2025, the Singapore Tax Authority issued updated guidelines emphasizing stricter scrutiny of cross-border transactions, especially those involving intangible assets such as brand licensing. This means that skincare companies must provide sufficient business rationale and pricing justification during audits to avoid being classified as engaging in tax avoidance.

V. Key Element Four Annual Reporting and Ongoing Compliance Management

Singaporean companies are required to submit an annual report to ACRA, including audited financial statements. While this may seem like a routine task, it has a profound impact on corporate reputation and credit evaluation. A professional and compliant audit report not only enhances credibility with banks and investors, but also lays a solid foundation for future financing and potential listing.

Ongoing compliance management is equally important. For instance, companies planning to apply for Singapore’s Enterprise Development Grant EDG under the Innovation and Growth Incentive Program must maintain strong audit records. In October 2025, Enterprise Singapore ESG updated its application criteria on its official website, explicitly requiring applicants to have submitted compliant audit reports for two consecutive years with no major financial violations.

Conclusion

Registering a skincare company in Singapore may appear to be a simple business decision, but it involves a series of complex legal, financial, and operational issues. Auditing is the most critical part of this process-it is not only the minimum requirement for compliance, but also a gateway to internationalization. Ignoring audits can result in regulatory penalties at best, and damage to brand reputation and future development at worst. Whether a startup or an established enterprise, any company entering the Singaporean market must place a strong emphasis on the audit process and lay a solid foundation for sustainable growth from the outset.