Indonesia Cuts 2025 GDP Growth Forecast, Maintains Budget Gap Strategy

Indonesia’s Finance Minister Sri Mulyani Indrawati announced in parliament on Monday that the country has revised its 2025 GDP growth forecast to 5.1% to 5.5%, down from the previous estimate of 5.3% to 5.6%.

This new growth outlook, bond yields and the rupiah exchange rate predictions will guide the government’s 2025 budget planning.

Outgoing President Joko Widodo will finalise the figures and present the 2025 budget to parliament in mid-August. Lawmakers will debate the budget in September before President Widodo’s successor, Prabowo Subianto, takes office in October.

The transition team for president-elect Prabowo is collaborating with the finance ministry to ensure the 2025 budget reflects his plans. Sri Mulyani confirmed that initiatives to improve nutrition for school children, a critical program of Prabowo, will be part of the 2025 fiscal plans, though details remain unspecified.

Analysts have raised concerns about the high cost of Prabowo’s campaign pledge to provide free meals for 83 million children, which could impact Indonesia’s fiscal discipline. The estimated first-year cost is $7.7 billion, with potential growth boosts of up to 2.6 percentage points by 2029.

Despite the reduced growth forecast, the government plans a 2025 budget deficit range of 2.45% to 2.82% of GDP, close to the previous estimate of 2.48% to 2.80%. This year’s budget deficit is 2.29% of GDP, compared to last year’s 1.65%.

The public debt-to-GDP ratio will remain between 37.98% and 38.71% next year, consistent with current levels. Maintaining healthy fiscal metrics remains crucial as Indonesia approaches market-based financing instead of bilateral or multilateral loans to address the budget gap.

Sri Mulyani warned, “A widening fiscal deficit can increase bond yields, pressure the rupiah exchange rate, raise domestic interest rates, and reduce private sector activity.”

Our Commentary:

Since 2014, Singapore has been Indonesia’s top source of foreign direct investment (FDI) Despite the revised GDP forecast, Indonesia continues to welcome foreign investments.

At ForBis Group, we note a substantial influx of foreign investors into Indonesia across sectors such as technology SaaS, property development, infrastructure, and manufacturing. Indonesia’s growing middle class fuels this trend, projected to reach 80% of the population by 2045. The expanding middle class drives demand for services and products, enhancing investment opportunities. Indonesia’s diverse workforce further attracts foreign investments.

For more information on how ForBis Group can help you enter the Indonesian market, please contact us.

Singapore Implements Stricter Penalties for Corporate Service Providers Violating Anti-Money Laundering Regulations

Singapore passed a new law on Tuesday, Jul 2, significantly increasing penalties for corporate service providers that breach anti-money laundering duties. The Accounting and Corporate Regulatory Authority (ACRA) now requires all corporate service providers to register, regardless of whether they transact with the authority.

ACRA, under the Ministry of Finance, has adopted a stricter stance on corporate service providers and individuals failing to comply with regulations. Since 2021, ACRA imposed 41 sanctions, canceling or suspending the registration of 31 firms and individuals. The new Corporate Service Providers Bill raises fines for non-compliance from S$25,000 to S$100,000 (US$73,650).

All businesses providing corporate services, including those serving only overseas clients, must register with ACRA. This requirement extends to accounting firms performing services specified by the Financial Action Task Force, a global watchdog on money laundering and terrorism financing.

Second Minister for Finance Indranee Rajah highlighted the vulnerability of nominee directorship arrangements to abuse. Nominee directors, often local residents appointed by corporate service providers, sometimes fail to perform their fiduciary duties. New regulations mandate that only registered corporate service providers can arrange nominee directorships, ensuring individuals are fit and proper for the role.

The recent S$3 billion money laundering case underscored the importance of these measures. The offenders, part of an illicit gambling ring, laundered money into luxury assets. This case, though incorporated into the new law, does not solely drive the new regulations.

Parliament also debated the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill alongside the Corporate Service Providers Bill. Corporate service providers act as “gatekeepers” against company misuse, supporting businesses in filing annual returns and arranging directors. They must conduct customer due diligence for all clients, resident or non-resident.

Concerns arose regarding the impact of the new law on business compliance costs. MPs like Mr. Lim Biow Chuan and Nominated MP Neil Parekh noted the potential financial burden and service interruptions for small companies. However, Ms. Indranee assured that the requirements, reflecting best practices, should not significantly increase compliance costs or affect Singapore’s business environment.

Mr. Louis Chua raised the issue of “Singapore-washing,” where foreign firms relocate to mitigate geopolitical risks. He emphasized maintaining Singapore’s reputation against money laundering. While some MPs felt the penalties might be excessive, Ms. Indranee stated that the government had extensively consulted stakeholders and calibrated the requirements appropriately.

The Bill rejected an initial proposal requiring nominee directors to meet training requirements, considering it overly restrictive and costly. Instead, corporate service providers must ensure nominee directors are qualified, allowing capable individuals to hold multiple directorships without unnecessary limits.

Together, the Corporate Service Providers Bill and the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill aim to strengthen Singapore’s anti-money laundering framework, ensuring the city-state remains a safe and legitimate business hub.

Our take:

Corporate services play a critical role in the global fight against money laundering and counter-terrorism financing. At Forbis Group, we understand the immense responsibility that comes with ensuring our financial systems adhere to stringent regulations. As a corporate services provider in Singapore, a leading financial hub with a high volume of transactions, our role is more vital than ever.

We welcome the recent regulatory changes aimed at strengthening compliance and enhancing transparency within the industry. These measures are crucial in maintaining the integrity of our financial ecosystem and safeguarding it against illicit activities. However, it is essential that corporate service providers are given adequate time to adapt and fortify their internal processes to meet these new standards effectively.

At Forbis Group, we are committed to supporting our clients through this transition. We believe that by fostering a culture of compliance and accountability, we can not only protect our financial system but also contribute to a more secure and sustainable business environment. Our dedication to upholding the highest standards of regulatory compliance reflects our unwavering commitment to the principles of people, planet, and profit – the foundation of our long-term business sustainability strategy.

By integrating these new regulations into our practices, we aim to not only comply with the law but to lead by example in promoting ethical business conduct. The integrity and security of our financial system depend on the collective efforts of all corporate service providers. At Forbis Group, we are proud to play our part in this crucial endeavor, ensuring that our clients, and the broader business community, can operate in a safe and transparent environment.

Family Offices: ESG-Investing Awareness & Reporting

In recent years, the topic of Environmental, Social, and Governance (ESG) issues in Singapore have shifted to something that was once niche to a trend that can be seen across modern investment portfolios.

The whooping number on the so-called impact investing can be translated into the realisation of the coming-of-age investors and next generation wealth owners about the importance of investing in businesses that have a positive impact on society and the environment.

While the goal of investing in ESG does not diminish the interest in generating financial returns, more businesses don’t seem to want to miss out on creating positive social or environmental outcomes at the same time.

The same can be said for family offices in Singapore, which in recent years have seen progressive shifts towards ESG impact investing. Family offices are private wealth management entities that cater to high-net-worth families or individuals and are responsible for managing the family’s wealth across generations.

ESG Reporting: Popularity & Frameworks

There are several notable reasons why ESG investments gained traction among family offices in Singapore recently. Family offices are becoming more aware of the potential risks associated with investing in companies that have poor ESG practices. This can lead to reputational damage and eventually financial losses. By ingraining ESG principles and considerations into their investment strategies, family offices can reduce these risks and ensure that their investments are sustainable in the long term.

In addition to that, ESG-focused investing has been shown to generate attractive returns. Studies in recent years have found that companies applying ESG practices tend to outperform those that lack focus on the subject. By investing in companies with strong ESG practices, family offices can potentially generate higher returns while also contributing to giving positive outcomes to the society.

As family offices start to realise that ESG issues can have a significant impact on their financial performance and reputation, ESG reporting is becoming an important consideration. To guide their ESG reporting strategy, family offices can use various ESG reporting frameworks, such as the Global Reporting Initiative (GRI) Standards, Sustainability Reporting Guidelines (SRG), United Nations Sustainable Development Goals (SDGs) and Task Force on Climate-related Financial Disclosures (TCFD).

1. Global Reporting Initiative (GRI) Standards
The GRI Standards are a widely recognised framework for sustainability reporting that provide guidelines on ESG disclosures. The GRI Standards cover a range of ESG issues, including governance, ethics, human rights, labour practices, environment, and social issues.

2. Sustainability Reporting Guidelines (SRG) by the Singapore Exchange (SGX)
The guidelines were introduced in 2016 as an effort to encourage publicly listed companies in Singapore to disclose their ESG performance. This resulted in the requirement for all listed companies to adopt a “report or explain” approach. The guidelines cover a wide range of ESG issues, including climate change, human rights, and supply chain management.

3. United Nations Sustainable Development Goals (SDGs)
The SDGs are a set of 17 global goals adopted by the United Nations in 2015 to address social, environmental, and economic challenges.

4. Task Force on Climate-related Financial Disclosures (TCFD)
The TCFD was established by the Financial Stability Board to provide a framework for companies to disclose climate-related risks and opportunities. The TCFD framework covers four areas: governance, strategy, risk management, and metrics and targets.

By considering ESG reporting, family offices will be able to identify and prioritise ESG issues that are critical to their business. Undoubtedly, this will also be useful to help them track their progress towards achieving sustainability goals. By using these frameworks, family offices can also create long-term value for their shareholders, employees, and other stakeholders.

New Tax Incentives for Single Family Offices

A recent effort to encourage single family offices to deepen their investment in local Singaporean companies is taken by the Monetary Authority of Singapore (MAS) through its representative Mr. Alvin Tan, the Minister of State. He shared that MAS has continuously ensured the relevancy of fund tax incentive schemes and it has come up with the raised minimum criteria for single family offices. They perform this by “(i) increasing hiring requirements and (ii) introducing a new requirement for family offices to invest at least 10% or S$10 million of their assets (whichever is lower) in local investments.”

In addition to the raised criteria, MAS, Singapore Economic Development Board and Enterprise Singapore are also actively putting the effort through creating platforms to connect local companies with investors and supporting the Wealth Management Institute’s Global-Asia Family Office Circle, which acts as a platform for members to share best practices on management of wealth and co-investing which can help local companies in the nation flourish.

With the supportive environment coming from wealth-owners, ESG-focused businesses and the Singaporean government, it is not a big surprise that family offices are leading the way in ESG-investing in the country.

What ESG-Investing Means for Forbis

For Forbis Group, investing in ESG is not merely creating a positive impact on the environment. For us, it also means investing in a workplace that treats employees well, maintaining a diverse and inclusive workforce, and performing accountable and transparent governance practices. We consistently assist our clients to build up their ESG reporting and practices through our advisory services. We are also a proud member of RaISE Singapore which supports social enterprises.

To be a Sole Proprietor or Incorporate a Private Limited Company in Singapore: Which is the best option?

Starting a business can be an intimidating process. You need to come up with a business strategy, solicit customers and manage short- and long-term finances. Plus, sorting through the paperwork, forms, and registration steps to legally set up your business can be even more frustrating.

When you’re considering the legal structure of your business, one of the key things to decide when starting a business in Singapore is the form that the business will take. There are 2 common types of business structures, sole proprietorship and incorporation of a private limited company.

Each of these forms of business ownership has advantages and disadvantages that you will want to weigh before choosing a particular form of business for your new venture. In this comprehensive guide, therefore, we’ll break down the advantages of a self-employed individual, sole proprietor, or incorporation of a private limited company (as well as the disadvantages) so that you have all the information you need to decide if this entity type is right for your business.

What is Sole Proprietorship?

A sole proprietorship is a business that can be solely owned and controlled by an individual, a company, or a limited liability partnership. There are no partners in the business. The legal status of a sole proprietorship is not a separate legal entity from the business owner and the business owner has an unlimited liability.

A sole proprietorship is the easiest structure to create and is often chosen by brand new business owners. If you choose this structure, you are the sole owner of your company and both you and your business are one and the same by law and in the eyes of tax authorities. All of the profits your business earns are yours to keep. If you ever need to satisfy business debts, as a sole proprietor anyone from tax authorities and creditors to individuals can make claims against your business as well as your personal assets.

Advantages of Sole Proprietorship

• It’s simple and affordable

• Operating freedom and flexibility

• Simplified Tax Reporting

• Simplified ownership

Disadvantages of Sole Proprietorship

• Assuming all the liability of the company

• Financing and business credit are harder to procure

• Difficulty Raising Funds

• Renewal is required annually/bi-annually

• Dies with the proprietor, cannot be transferred or sold.

What is a Private Limited Company?

A private limited company is a company that is limited by shares held by less than 50 persons and is not available to the general public, it is a separate legal entity from its shareholders, which means it is also recognized as a taxable entity. you will find that most entrepreneurs prefer the option of a private limited company because of the flexibility that it offers.

A company is often seen as a “legal person” since it can sue or be sued in its name. Its capacity is not tied to any single shareholder or director. This means that all the business assets, liabilities, and profits belong to the company itself and the shareholders are not wholly responsible for debts incurred by the company. Like a sole proprietor, a company can also have only one director & shareholder. However, the Company enjoys limited liability and potential savings from proper tax planning.

Advantages of a Private Limited Company

• Income advantages

• Tax savings

• Business continuity – always live until strike off application. Survives the initial owners, easily passed on or sold to others.

• Professional status

• Funding opportunities

Disadvantages of a Private Limited Company

• Set up costs

• Company accounts

• Shared profits

• Personal information disclosure

• Strict record-keeping procedures

• Name restrictions

Ultimately, when it comes down to choosing to be sole proprietor, or incorporating a private limited company, the legal model you want to decide on for your company ultimately depends on what sort of company you want to start.

Small enterprises and self-employed individuals may prefer the simplicity and control over earnings offered by a sole proprietor, while those with ambitions of starting a larger company with lots of employees might be tempted by the security that registering as a limited company offers, particularly in terms of liability. It all boils down to your individual business model and goals for the future and it’s wise to seek professional advice about tax efficiencies and risk before making any long-term decisions.

Get in touch with ForBis Accounting team for further information about starting a business in Singapore with the pros and cons of each business structure and independent advice about which option is optimal for you!

Singapore is world-renowned as a leading hub for economic activities. It is often regarded as a gateway for businesses that want to prime themselves for further expansion into other ASEAN cities. Its politically stable environment, flexible immigration policies and advanced technological landscape make up some of the advantages of setting up a business in Singapore.

According to the World Bank’s Ease of Doing Business Index 2020, Singapore is the second easiest country to start a business in, which comes after New Zealand. Singapore has one of the most efficient and bureaucracy-free regulatory frameworks in the world. The requirements for incorporating a company are straightforward and the procedure for doing so is relatively simple. In most cases, it takes less than a day to incorporate a new company.

The resources provided in Singapore makes it easier for any investors or entrepreneurs to start a business. Any person across the globe can incorporate and start a business in Singapore.

Benefits of Incorporation in Singapore

The following are the benefits of company incorporation in Singapore:

• Straightforward Incorporation Procedure

When compared to other countries, the Company Registration process is quite straightforward. Apart from this, incorporating a company in Singapore is completely an online process. This makes it simple for an entrepreneur to incorporate a company in Singapore. The annual compliance requirements are also simple and devoid of unnecessary or complicated paperwork.

• Cost of Incorporation is Low

The cost of Company Registration in Singapore is quite low when compared to other jurisdictions such as the USA, Australia and the UK. Even the annual compliance cost for running the company is quite low.

• Global Infrastructure

Most first-time visitors to Singapore are astonished by the world-class infrastructure of the country. This includes the country’s airport, highway system, subways, internet infrastructure, commercial buildings, museums, hotels and public parks. Much of the infrastructure has been developed in the last decade so it is very modern and new. Aside from creating a pleasing work environment, this infrastructure also improves the productivity of its businesses.

• Different Industries

There are different industries that flourish in Singapore. This would include the financial services sector, insurance business, legal sector as well as tech sectors. All these sectors provide different opportunities for businesses to grow. There is continuous government support also offered to these industries. 

• Tax Advantages

Singapore has one of the world’s simplest and most rational tax systems. Individuals and companies only are taxed on income generated within the country as Singapore follows territory-based taxation, with no tax imposed on any foreign-sourced income. This makes the country particularly attractive to entrepreneurs who want to incorporate and build a new business.  

• Support for Startup

Singapore provides attractive grants and schemes to local start-ups as a source of motivation. Certain criteria are set by the government and the businesses can avail themselves of the grants based upon the category they fall into. The Singapore government has introduced various initiatives and programmes to create a vibrant startup ecosystem for both local and foreign entrepreneurs.

•  Strategic Geographic Location

Due to its close proximity to the emerging markets of India and China, Singapore is the hub for many top industries in the world. Situated in the heart of South-East Asia, it is easier for all the businesses here to have access to a market of 3 billion people. The port of Singapore is said to be the busiest in the world, making the country a premier International Maritime Centre (IMC). Additionally, its Changi International Airport links 300 cities in 70 different countries and caters to nearly 20 million passengers every year providing benefits to leading logistics companies along with passengers.

• Talent

There is a multitude of talent available in Singapore. Immigration policies and sponsorships are attracting different individuals to apply to Singapore. Singapore’s liberal immigration policy brings global talent to the country. Singapore makes it easy for a foreign professional to obtain and maintain work visas or permanent residence (PR) status. Nearly a third of the country’s workforce is from abroad. Through this, a diverse talent pool is offered in Singapore.

Nearly every young or middle-aged Singaporean also speaks English. Singaporeans are some of the most productive and well-trained workers in the world. The country’s excellent education system produces a talent that is good at what it does, yet on wages, it is extremely competitive with other countries.

•  No Corruption

All investments carried out by investors would have some form of protection, as law and legislation would support foreign investment and investors. The country has virtually no corruption because most government officials are very well paid, very harsh punishments are imposed for corruption, the country’s founder Lee Kuan Yew set a very high bar for moral rectitude and led the country by example. So, if you incorporate a company in Singapore, you can be assured that you are not going to be at the mercy of corrupt officials; your business will succeed or fail on its own merits.

Primary requirements for incorporating a company in Singapore

1. Choosing company name

The proposed name of your company will be submitted and approved by Accounting and Corporate Regulatory Authority (ACRA), the submission is made through ACRA’s portal called BizFile+.

2. Registering office address

You would need to provide a local address in Singapore. PO Boxes are not Permitted.

3. Appointing Director(s)

The person(s) appointed can be a Singaporean, a permanent resident, or a person holding an employment pass. After deciding on a resident director, foreign directors may also be appointed.

4. Shareholders

Private limited companies need to have at least one shareholder and not more than 50 shareholders).

5. Appointing Corporate Secretary

Based on the Companies’ Act, companies are required to appoint a resident company secretary who will keep the relevant parties informed of statutory Obligations.

6. Share capital

The minimum share capital is a minimal investment of S$1, while minimum paid-up capital is not required.

Setting up a Company in Singapore as a Foreigner

Companies limited by shares is the preferred entity type for foreigners as:

• Corporate tax is fixed at 17%

• Tax rebates on the first S$200,000 profits each year

• Dividends and capital gains are not taxable

• Shareholders are not personally liable for debts and losses of the Company

• Directors and Shareholders can be a different person(s)

• A large number of free trade agreements (FTAs): 44 active agreements

Cost for incorporating a Company in Singapore

• Name reservation paid to the government: S$15

• Incorporation fee paid to the government: S$300

Incorporation Information

Understanding that there are quite a handful of documents to be submitted and processes that require thorough management, it could be overwhelming for people who have just started exploring the nation’s regulations on this matter. In addition, it would be best to leave the administration part to professionals in order for the players to focus on the goals of the business itself. We believe that you wouldn’t want to miss any steps when just getting started.

ForBis is a trusted social enterprise that has extensive experience in assisting companies—both local and foreign-kick-start their business. Talk to us today to accelerate your goal in building your own empire, and let ForBis do the leg-work for you.

For more information, kindly check out the ForBis Accounting website at: https://sgcompanysetup.com/

Fees

• Incorporation FREE inclusive of S$315 govt fees

• Professional Corporate Secretary S$750/year

• Nominee Director S$2000/year + S$2000 refundable security deposit

• If applying for EP, then just $700 per quarter

• If at least 1 director is a Singapore citizen, PR or EP holder, then not required.

• Registered address including scanning & forwarding service

• S$480/year

• Not required if you have an address in Singapore

Digitalisation was already altering traditional working models and is now further accelerated by the pandemic. Organisations need to apply lessons learned to make their workforce more resilient in preparation for the next crisis. The accelerated digitalisation experience could be a springboard to meet the increasing challenge of attracting and retaining a new generation of digital natives with different expectations and approaches to work, especially in finance and accounting functions or practices.

In Singapore, Accounting professionals will get more support in upskilling and redesigning their job roles to meet the challenges of a post-Covid-19 world – notably those posed by digitalisation and climate change. Minister Indranee Rajah on Wednesday (Jan 5) introduced The New job transformation maps for the industry by the Singapore Accountancy Commission (SAC) and the Economic Development Board (EDB) that is also supported by Workforce Singapore (WSG) and SkillsFuture Singapore (SSG) following new trends include the accelerated rate of technology adoption, changing aspirations of job seekers who want more job satisfaction, and environmental, social and governance (ESG) concerns.

The new maps identify key technologies and their impact on individual job roles in finance and accounting functions and accounting practices. It also lays out the pathways for employers to transform jobs and workers to get the needed skills as new job roles emerge and existing roles evolve. Increased demand in tax, risk advisory, mergers and acquisitions, financial forensics, and business valuation. The in-house finance and accounting segment will also be critical in supporting firms as they expand overseas.

Technology skills that are increasingly in demand include the application of artificial intelligence, cloud computing, data analysis and interpretation, and robotics and automation. Soft skills required include adaptability, creative thinking, and customer orientation.

SAC, EDB, WSG, and SSG said that the job transformation maps are vital for the sector as the demand for new roles and services continues to grow, with a projected demand of 6,000 to 7,000 new accounting jobs by 2025.

ForBis see a growing need to plan the workforce and implement a talent strategy to keep up with constant changes in the workplace. We shape the business for sustained growth now and take a holistic view of the workforce from strategy and organisational design to cultural adaptation. It’s partly about rightsizing organisations, transformation, and technology, including in HR, but it’s also about transforming the people using this technology and upskilling them.