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Risk Assessment in Singapore

Risk Assessment in Singapore

Starting a business in Singapore implies various stages, among which market research and choosing an appropriate legal entity that can prevent financial losses. These enter the category of risk assessment procedures that can be completed by a company owner with the purpose of reducing the probabilities of failure but also increasing the chances of increasing profits.

Risk assessment in Singapore can be completed on multiple levels, however, the financial one is among the most important. Our accountants in Singapore are at the service of business owners who need to ensure the financial stability of their enterprises.

What is risk assessment and how can it help a business?

Risk assessment has various components and companies in Singapore can complete various procedures which imply the verification of financial situations with the purpose of reducing liabilities over loans, assets or investments.

 Quick Facts  
  Purpose of risk assessment in Singapore Verification of various indicators meant to reduce financial and market liability

Risks incurred by companies in Singapore

Financial, non-financial, business,
and market risks

Types of risk assessment analyses for businesses

 Generic, qualitative, quantitative, financial, market risk assessment evaluations
Generic risk evaluation analysis

Generic risk assessment implies the evaluation of general activities in a business

Qualitative and quantitative risk assessment They imply the verification of hazards and risk levels in a company from financial and non-financial points of view
Steps for risk assessement analysis

Identification of potential dangers, evaluation of hazards, measure proposals and implementation

Financial risks evaluation

 Financial loss risks, business interruption and penalties applied by governmental bodies

Market analysis Analysis of the Singapore market size and specifics and evaluation of the competition
Risks a Singapore company can face Loss of assets and investments
Investment risk assessment Evaluation of investments made in various assets, technology, equipment, etc.
Assessement of the competition Verification of competitors’ market behavior, marketing plans, financial performance
Accounting services associated with risk evaluation Keeping updated accounting records, filing financial returns in due time to avoid penalties
Types of audits associated with risk evaluation Internal, operational, compliance audits
 Types of companies most exposed to risks in Singapore Small and medium-sized enterprises, startups
 Risk assessment services availability (YES/NO)  Yes
 Types of financial risks incurred by Singapore companies

– Market risks,

– credit risks,

– liquidity risks,

– operational risks,

– currency risks. 

Market risks 

 Risks associated with the changes that occur on a company’s market.

 Credit risks

 Risks related to credits that may not be repaid, and which can lead to cashflow difficulties.

 Liquidity risks  Risks associated with the impossibility of turning assets into cash or the incapacity of being financially solvable.
 Operational risks

 Risks that affect a company’s activity, such as fraud, operating systems failure, technical problems.

 Currency risks

Risks associated with transactions that rely on currency conversion. 

Who can provide risk assessment services? 

Such services can be offered by financial professionals, but also by other specialists such as lawyers. 

 When can a risk assessment be required?

 At any stage of a company’s operations, including before starting any activity.

Types of companies that can ask for risk assessment solutions 

All companies, no matter the size, can ask for such services. 

 Availability of risk assessment for investments (YES/NO)  Yes, our specialists can conduct risk assessment valuations for investment purposes.
 Loan/credit risk assessment services (YES/NO)


 Business-related risk assessment services

– Competition evaluation,

– product liability,

– financial risks, etc.

Risk assessment strategies 

 – Avoidance,

– reduction,

– transfer,

– retention.

 Risk assessment tools

 Risk assessment relies on statistical methods, such as the Value-at-Risk and scenario analysis.

 Advantages of risk assessment analyses

– Risk quantification,

– financial loss minimization,

– business protection. 

From a financial point of view, risk assessment is important when it comes to investments made by Singapore companies and that could lose their value in a shorter time than predicted.

If you need accounting services in Singapore, our specialists are at your disposal.

Risk assessment analyses in Singapore

In order to prevent issues from happening or minimize the damages in case they occur, business owners can work with analysts in Singapore who can complete risk assessment analyses that will enable companies to know their weak points and, most importantly, how to eliminate them.

A risk assessment analysis in Singapore can imply the following steps:

  1. identification of the dangers and hazards the company is exposed to;
  2. establish the assets subject to these risks and how they can be exposed;
  3. evaluate the extent of the possible damage and set in place control protocols;
  4. verify the status of the measures implemented and update the protocols regularly.

Risk assessment in Singapore can be completed not only by business analysts but also by accountants, especially when dealing with financially related issues.

Our accounting firm in Singapore is at the service of small, medium, and large companies seeking to limit the exposure to financial risks, such as:

  • activity interruption;
  • financial loss;
  • penalties imposed by various governmental agencies (IRAS, ACRA, and so on).

In the context of the pandemic, many companies around the world had to evaluate the risks associated with the interruption of their operations, which is why in order to prevent such problems, conducting a thorough audit and come up with a risk assessment plan and control measures can help your business stay afloat during troubling times.

The main aspects when it comes to risk assessment in Singapore

The procedures related to the assessment of risks for a business imply:

  • analyzing potential events that can lead to losing assets or investments;
  • checking the risks associated with starting new projects;
  • quantitative risk analysis used mathematical stimulations through which specific values are assigned to investments;
  • verifying the volatility of the market in order to predict as accurately as possible returns on investments can also enter the category of risk assessment.

Companies in Singapore can also evaluate the risks associated with employment, among which the number of workers needed is quite important. Compared to other countries, managing the payroll in Singapore is rather simple and transparent, making it a highly attractive option for large corporations looking to expand there. However, there are special laws and guidelines that must be observed when completing such operations in Singapore. For this purpose, you can obtain more information from our local accountants.

Our local specialists can complete various procedures related to risk assessment in Singapore, based on your company’s needs.

What are the risks a company could face?

A Singapore company can be exposed to risks of various natures, which is why when conducting risk assessment analyses, the shareholders can have specialists from various fields verify the most important aspects.

During a risk assessment analysis, the first thing to do is to identify the risks the business is exposed to, followed by the assets that can be affected the most. Among these, are operational systems (computers and software), buildings, employees, operations. Based on the findings, the specialists can propose the measures that can be implemented in order to prevent damages from occurring. While an enterprise cannot be fully protected, minimizing the hazards can save the company from shutting down completely.

Our accountants in Singapore are at the service of local and foreign business owners who want to know how a financial crisis can affect their companies, especially when it comes to startups run by young entrepreneurs who are first-time investors in the city-state.

Risks over losing assets and investments of a company

When starting a business, a company will need to have certain assets. Among these, the share capital which can consist of money or tangible and intangible assets is one of the most important. These assets can be lost when decisions that impact the business’ integrity are taken. From this point of view, a correct assessment of the risks incurred by the company is essential.

Risks can be associated with not conducting a thorough verification of the market and competition and not relying on a model that has worked and provided good results. Furthermore, specific investments can also lead to financial losses that can jeopardize the financial soundness of the business can even lead to dissolution.

These are just a few of the reasons why risk assessment in Singapore should be considered from the beginning of the operations.

The procedures through which risks can be reduced can be implemented by local companies but also by branches or subsidiaries of foreign enterprises operating in the city-state. In the case of overseas businesses, it is important to understand how the Singapore market works and its particularities in order to make correct predictions. This is where our accounting firm can assist with tailored advice.

Risk assessments and audits in Singapore

One of the most important tools that can be used in risk assessment in Singapore is an audit. When discussing audits, our specialists do not refer to external ones that are mandatory, but to the following:

  1. internal audits which can be completed in order to verify the financial health of your business;
  2. operational audits in order to ensure that the operations of essential departments are optimized;
  3. compliance audits through which one can make sure his/her company respects the law;
  4. payroll audits can also be completed in order to ensure that employment regulations are respected.

Based on the results of one or more of such audits, various aspects can be improved, and thus, reduce risks.

Companies must conduct audits in accordance with the Singapore Companies Act. According to the Companies Law, organizations that meet the basic standards are required to appoint an auditor or an audit firm in Singapore to complete these activities. We have specialized staff that can offer such services so that your financial statements are in order. Our auditors in Singapore are at your disposal with various services.

Risk management for small companies in Singapore

 Often, small companies are the most exposed to risks due to the fact that their resources are limited compared to large enterprises that can partially direct the budget to mitigate issues.

Nowadays, small businesses represent an important percentage of Singapore’s economy, which is why completing risk assessment analyses that help them keep problems at bay is quite important. The government offers various grants that help them, however, being able to prevent specific problems where the official agencies cannot intervene is very important for their survival.

For this purpose, when preparing the business plan that gives a trajectory for the first years of activity, involving a business analyst who can offer a perspective on the risk incurred during these years is very important. This way, the owner will know what to expect and how to minimize potential hazards.

Working with specialized accounting firms in Singapore that can offer tailored support is also important, as the risks of failing to pay the taxes on time and facing penalties are significantly diminished. Also, the correct financial situation of the company can help when seeking to obtain a loan from a Singapore bank.

Risk assessment in Singapore is an important part of doing business, even if the city-state has one of the most stable economies in the Southeast Asia region. Even if at a macro level a company will not be exposed thanks to the favorable business environment, at a micro-level, things are different and particular for each enterprise which is why a personalized approach is recommended.

Doing business in Singapore

Singapore is one of the most appealing business destinations in Asia, which is why many foreign investors direct their attention to the city-state where they can develop various types of activities. For this purpose, they can use our accounting services in Singapore that can help them minimize the financial risks associated with running a company here.

We are at their disposal with tailored solutions that will enable them to enjoy all the benefits arising from having a Singapore-based enterprise. We also invite you to watch our video below:

Foreign investments in Singapore

Singapore is one of the most appealing foreign investment destinations in Southeastern Europe, and according to statistics, in the past few years it has attracted impressive resources, as it follows:

  • in 2018, the city-state had a net inflow of foreign direct investments (FDIs) of 75,954 million USD;
  • in 2019, the number increased to a spectacular 114 million USD;
  • in 2020, FDIs dropped to 90.59 million USD on the background of the health crisis.

If you have a business and are interested in risk assessment in Singapore, do not hesitate to contact us.