Customer Due Diligence

A beneficial owner of an entity is defined by ACRA as:

• any individual who ultimately owns or controls (whether through direct or indirect ownership or control) more than 25% of the shares or voting rights of the entity; or

• any individual who otherwise exercises control over the management of the entity.

With that said, the exact way to identify a beneficial owner depends on the type of entity in question (e.g. a body corporate, a trust or other arrangement, or any other kind of entity).  See below examples for further explanation.

Generally speaking, anyone with ultimate ownership, ultimate control or ultimate effective control over an entity will be a beneficial owner. Often, one or more of these tests are met through someone's legal ownership (e.g. holding more than 25% of a company's shares). However, legal ownership and beneficial ownership are two separate concepts. Someone can exercise ultimate control over an entity, and be a beneficial owner, regardless of whether they own shares or other interests above any specified minimum ownership threshold.

More information on beneficial ownership can be found on the website of the Financial Action Task Force (FATF).

• the natural persons (whether acting alone or together) who ultimately own all the assets or undertakings of the body corporate;
• failing that, the natural persons (if any) who ultimately control the body corporate or have ultimate effective control over the body corporate; or
• failing that, the natural persons having executive authority in the body corporate, or in equivalent or similar positions.

• the settlor;
• the trustee(s);
• the protector (if any);
• the beneficiaries (or any class of beneficiaries); and
• any other natural person exercising ultimate ownership, ultimate control or ultimate effective control over the trust (including through a chain of control/ownership or both).

The Foreign Account Tax Compliance Act (FATCA) was enacted by the US to target non-compliance with US tax laws by US persons using non-US accounts. FATCA requires every Financial Institution (FI) outside the US to report on the assets held by their US account holders, or be subject to withholding tax on certain payments.

Singapore has entered into an Intergovernmental Agreement (IGA) with the US to facilitate the FATCA obligations of FIs in Singapore, and has been reporting financial account information to the US since 2015. Every Reporting Singapore Financial Institution (SGFI), must conduct due diligence on all US financial accounts and report the relevant account information to IRAS in an annual return.

The Common Reporting Standard (CRS) is an internationally agreed standard for the automatic exchange of financial account information between jurisdictions for tax purposes, to better combat tax evasion and ensure tax compliance.

Singapore has committed to implement the CRS and has been exchanging financial account information with partner jurisdictions since September 2018. Every Reporting Singapore Financial Institution (SGFI) must conduct due diligence on all financial accounts and report the relevant account information to IRAS in an annual return.

Source of wealth generally refers to the origin of your (or your beneficial owner’s) entire body of wealth, i.e. the total assets. This relates to how you (or your beneficial owner) have acquired your wealth, which is distinct from identifying your assets. 

Source of wealth information should give an indication about the size of wealth you (and your beneficial owner) would be expected to have, and how you (and your beneficial owner) acquired the wealth.

Source of funds refers to the origin of the particular funds or other assets which are the subject of the establishment of business relations (e.g. the amounts being invested in an SPV of Fund).

You will need to confirm your country (or countries) of tax residence. This is required to register as an Auptimate user, and may be needed under certain regulatory regimes, e.g. the OECD's Common Reporting Standard (CRS) and the US's Foreign Account Tax Compliance Act (FATCA).

Your tax residency is determined under the domestic tax laws of each jurisdiction. There might be situations where you qualify as a tax resident under the rules of more than one jurisdiction and, therefore, you could be a tax resident in more than one jurisdiction.

See here for the OECD's overview of tax residency rules.

A Tax Identification Number ("TIN") is a unique identifier issued to an individual or entity, usually by the local tax administration authority.  Each jurisdiction has its own rules governing the issuance, structure, use and validity of TINs or their functional equivalents.   

See here for the OECD's overview of TINs.  If you have any questions in relation to your TIN, it is recommended that you contact the tax administration within your jurisdiction.

A corporation or other entity will have a permanent establishment in Singapore if it has a fixed place where its business is wholly or partly carried on, including: (a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a warehouse; (f) a workshop; (g) a farm or plantation; (h) a mine, oil well, quarry or other place of extraction of natural resources; or (i) a building or work site or a construction, installation or assembly project. 

An entity will be automatically deemed to have a permanent establishment in Singapore if it:

• carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or 

• has another person acting on its behalf in Singapore who: 

  1. has, and habitually exercises, an authority to conclude contracts on behalf of that entity; or

  2. maintains a stock of goods or merchandise for the purpose of delivery on behalf of that entity; or 

  3. habitually secures orders wholly or almost wholly for that entity, or for such other enterprises as are controlled by that entity.

For the purpose of determining whether an investor is an associate of another investor, the two investors will be deemed to be associates of each other if:

1. at least 25% of the total value of the issued securities in one investor is beneficially owned, directly or indirectly, by the other; or

2. at least 25% of the total value of the issued securities in each of the two investors is beneficially owned, directly or indirectly, by a third person.

The 'deemed associate' tests in 1. and 2. above do not apply where:

• any of the two investors is a listed entity and each does not beneficially own, directly or indirectly, at least 25% of the total value of the issued securities of the other investor; or

• no third person (other than an individual or a 'designated person') beneficially owns, directly or indirectly, at least 25% of the total value of issued securities of the two investors and at least 25% of the total value of the issued securities in each of the two investors is owned either directly by an individual or a 'designated person', or indirectly through a nominee company or a trust fund by an individual or a 'designated person'; or

• one of the investors is an 'approved person' under section 13U of the Income Tax Act which, at all times during the basis period for the year of assessment for which the income of a 'prescribed person' is exempt from tax under section 13D of the Income Tax Act: (a) beneficially owns directly any of the issued securities of the 'prescribed person'; and (b) satisfies all the conditions in regulation 3(2) of the Income Tax (Exemption of Income Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010.

A US Person includes:

1. A US citizen or resident individual.

2. A partnership or corporation organised in the US or under the laws of the US or any state of the US.

3. A trust if (i) a court within the US would have authority under applicable law to render orders or judgements concerning substantially all issues regarding administration of trust, and (ii) one or more US Persons have the authority to control all substantial decisions of the trust, or an estate of a decedent that is a citizen or resident of the US.

This definition will be interpreted in accordance with the US Internal Revenue Code.  Please note that persons who have lost their US citizenship and who live outside the US may nonetheless in some circumstances be treated as US Persons and, in particular, if you:

• hold multiple citizenships and one of them is US, you are a US Person;

• have a US Green Card, you are a US Person;

• were born in the US or a US Territory (Puerto Rico, Guam, US Virgin Islands or Northern Mariana Islands), you are a US Person; and/or

• meet the substantial presence test, you are a US Person.

We reference the International Standard Classification of Occupations (ISCO) as published by the International Labour Organization (ILO) to classify a customer's occupation.  When asked to confirm their occupation, customers will be asked to select the relevant "Major Group" from ISCO-08.

If you need help deciding which "Major Group" is the best fit for your occupation, visit the ISCO-08 and peruse the:

• "Sub-Major Groups" on pages 4 and 5; or

• "Minor Groups" on pages 6 to 12; or

• "Unit Groups" on pages 13 to 34.

We reference the International Standard Industrial Classification of All Economic Activities (ISIC) as published by the International Labour Organization (ILO) to classify a customer's or vehicle's industry.  When asked to confirm the relevant industry, users will be asked to select the relevant category (and, if applicable, sub-category) from ISIC Rev. 4.