Understanding legal requirements key for jewellery sales in Singapore: analyst

Before entering Singapore's jewellery retail market, businesses must choose an appropriate business structure.

Understanding the legal framework for selling jewellery and precious products in Singapore is essential for businesses aiming to operate successfully and avoid costly penalties, Dentons Rodyk said.

Dentons Rodyk emphasises that before entering Singapore's jewellery retail market, businesses must establish a solid legal foundation by choosing an appropriate business structure.

The most common choice amongst jewellery businesses is the private limited company, which offers advantages such as limited liability, tax benefits, and enhanced credibility with customers and suppliers.

To incorporate a private limited company in Singapore, businesses must select a unique company name approved by the Accounting and Corporate Regulatory Authority (ACRA). Once approved, applicants have 120 days to prepare the necessary documentation.

According to Dentons Rodyk, following incorporation, businesses intending to sell jewellery must consider licensing and registration obligations under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 (PSPM Act).

The PSPM Act mandates registration for all businesses engaged in "regulated dealing," which includes manufacturing, importing, selling, or offering for sale any precious stones, precious metals, or related products.

The Act defines "precious metals" as gold, silver, platinum, and related alloys containing at least two percent of these metals.

Dentons Rodyk warns that non-compliance with the PSPM Act can result in severe penalties, including fines up to S$75,000, imprisonment for up to three years, or both. Additional daily fines apply for continued non-compliance after conviction.

Given Singapore's heightened scrutiny of money laundering and terrorism financing risks, Dentons Rodyk stresses that jewellery retailers must ensure full compliance with all relevant regulations before commencing operations.

Failure to comply not only exposes businesses to legal penalties but also jeopardises their reputation in a competitive market. The firm strongly recommends seeking professional legal advice to navigate the regulatory landscape effectively and mitigate potential risks.