When should my company register a new SSIC code?
Want to do business in Singapore? Getting an SSIC code is a critical step that you cannot afford to overlook, especially if you are trying to stay on the right side of the law. Here is how they work and why it is so important to keep your registration current and accurate.
What is an SSIC Code?
A Singapore Standard Industrial Classification (SSIC) code is a five-digit number used to classify businesses according to their primary activities. The Singaporean government uses SSIC codes to track the performance of different industries.
Policymakers also rely on SSIC codes as a source of information for compiling statistics on the economy. For instance, they commonly show up in census data, financial forecasts, and other formal reports.
The SSIC code scheme is specific to Singapore, but these classifications draw from a global framework known as the International Standard Industrial Classification of All Economic Activities (ISIC). As the economy evolves and new industries arise, the government updates how SSIC codes work, with the most recent standard being SSIC 2020.
SSIC codes are for more than just national-level statistics and tracking. They are also used to identify a company when it does business with other organisations or government agencies and determine applicable licensure requirements. To allow companies that work in unique or emerging fields, each business entity can have as many as two SSIC codes.
Each company that wants to conduct business legally needs to register for an SSIC code with Singapore's Accounting and Corporate Regulatory Authority (ACRA). This step is a prerequisite to being approved in BizFile+, the national filing portal, making it vital to get an SSIC if you want to pay taxes and adhere to the law. In most cases, companies register for their SSIC codes when they reserve their official business names.
What If I Registered for the Wrong SSIC Code?
So, what happens if your company's SSIC code does not align with what you do? This can occur when a business decides to move into a different field, which is not uncommon for new and growing enterprises. It can also happen as a result of simple mistakes.
Every time someone wants to form a new business, ACRA subjects their registration documents to a rigorous examination. This may include cross-referencing and sharing the information with partner agencies and trade associations. As you might expect, this process can take some time.
What does this mean? At a bare minimum, you should expect delays if you have registered for the wrong code.
It is impossible to predict how much additional time a registration might require in such a case. Making a mistake might throw your business plans into disarray, even though ACRA is usually good about trying to expedite the process.
Another problem with incorrect registrations is that applying for the incorrect code might mean you will have to jump through extra hoops. For instance, depending on the nature and extent of your mistake, ACRA may ask you to provide supplementary evidence before you are approved.
When Should You Change Your Company's SSIC Code?
As mentioned above, your business may decide to shift its stance for various reasons. When this occurs, you will need to change your SSIC code.
In most cases, companies alter their codes after passing an executive resolution. Your corporate board can vote or follow a similar procedure to finalize such a decision, which is usually the best way to initiate a formal change as per your bylaws or other organisational rules.
Not all changes require a new SSIC code in Singapore. For instance, if you ran a vacuum cleaner factory, you'd most likely (as of June 2022) use code 26400, "Manufacture of consumer electronics." This category is broad enough that you might not have to make a change if you also started building other household appliances.
Now imagine that you expanded your business even further by getting into research and development in addition to fabricating existing designs. In that case, you might have to add code 72102 "Research and experimental development on electronics (excluding medical science)". It is critical to analyse each SSIC description carefully to ensure that it applies to what you currently do.
How to Choose an Appropriate SSIC Code
The most straightforward way to find the right SSIC code for your business is to check the official ACRA SSIC search tool at BizFile+. After entering a few keywords describing your field, you'll be shown a list of applicable classifications.
That being said, it is usually best to talk to a Singaporean business advisor before choosing an SSIC. Different types of firms, though they may seem closely related, can incur unique taxation, reporting, and professional membership requirements. In other words, your code can impact how easy it is to do business profitably!
Also, remember that the ACRA SSIC system is an evolving standard. If you have not kept up with the latest rules, you could make a mistake, so always consult with an expert to avoid delays!
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