What is the Consumer Protection (Fair Trading) Act?

Imagine signing up for a gym package because it says “no hidden fees” – only to be hit with surprise charges. Or buying a brand-new phone that turns out to be a refurbished set.

The Consumer Protection (Fair Trading) Act (CPFTA) is Singapore’s safeguard against situations like these. It spells out what counts as unfair business practices and gives consumers the right to seek redress.

What is an Unfair Practice Under the CPFTA?

A supplier is acting unfairly if they:

• Do or say something misleading (or fail to say something important).
• Make false claims about their goods or services.
• Exploit vulnerable consumers – for example, those who:
  • Cannot properly protect their own interests, or
  • Cannot fully understand the terms or effect of a deal.

Examples of Unfair Practices

• Selling used goods as “brand new”.
• Misleading price tags or promotions.
• Hard-selling tactics that pressure you into buying.
• Hiding crucial details (like extra fees or exclusions).

In short: if a business tries to trick, pressure, or take advantage of you, it could fall under an unfair practice.

Making a Claim Under the CPFTA

If you’ve experienced an unfair practice, here’s what you can do:

Steps to Make a Claim

1. Try resolving directly – many cases are settled through discussion or mediation.
2. Go to the Small Claims Tribunal – if you can’t resolve it, you may file a claim here.
3. Claim amount – you can seek up to $30,000 in damages.

Claim Limits and Exceptions

• Above $30,000: The Small Claims Tribunal won’t hear your case; you’ll need to go to a higher court.
• Willing to let go of the excess? You can abandon any amount above $30,000 to keep your case in the Tribunal.

Example:
You’re claiming $35,000. You may choose to abandon $5,000 and proceed with a $30,000 claim in the Tribunal. But once you do, you cannot chase the extra $5,000 later.

CPFTA Limitation Period for Claims

Don’t wait too long! You must file your claim within 2 years of either:

• When the unfair practice happened, or
• When you first became aware of it.

(Whichever is later)

Quick Overview of CPFTA Claims

Why the CPFTA Matters to Consumers

The CPFTA isn’t just another piece of legislation – it’s there to protect you in your everyday transactions.

Benefits of Knowing Your Rights

With CPFTA knowledge, you can:

• Spot unfair practices quickly
• Take timely legal action
• Protect yourself with confidence

If you think you’ve been misled or treated unfairly, don’t ignore it. Act quickly, and if your claim is close to or above the $30,000 limit, speak to a lawyer to understand your best options.

Our legal team is here to help you navigate every step of the process.

The content of this article does not constitute legal advice and should not be relied on as such. Specific legal advice should be sought for your circumstances.

Thinking about taking your business global? 

Overseas markets present exciting new opportunities, but such ventures come with risks and what may potentially be a legal minefield. 

When starting a business in Singapore, it is important to know the different business structures available and decide on the one that best fits your needs. Here are some things to consider:

• Scale of your business
• Liability protection needs
• Start-up capital
• Compliance 
• Growth plans

International Laws and Regulations

Global business operations are governed by a labyrinth of laws and regulations that vary significantly from one jurisdiction to another. Understanding the legal landscape of your target market is essential before expansion takes place:

Local Legal Compliance

Each country has its own rules and regulations, affecting everything from business registration to taxation and labour laws.

International Trade Regulations

Businesses must understand tariffs, trade barriers, and international trade agreements are essential for smooth operations and competitive pricing.

Adhering to International Agreements

You will also need to comply with various international standards, including environmental protocols and anti-corruption laws.

Non-compliance can lead to serious penalties – from financial penalties to disrupted operations and reputational damage. Legal due diligence and strategic planning is essential for success.

Establishing a Global Presence

Setting up a legal and operational business structure that aligns with local regulations is crucial.

Entity Formation and Registration

Choosing the right type of business entity (e.g., sole proprietorship, partnership, limited partnership) is critical. Each option has its own legal, tax, and operational implications.

• Tax Obligations
  Understanding corporate taxes, VAT/GST, withholding taxes, is essential to stay compliant and optimise costs.
• Labour and Employment Laws
  Complying with local labour laws, understanding employment practices, and ensuring fair labour standards are essential for successful operations and maintaining a positive company image.

Intellectual Property Protection

Intellectual property (IP) is often among a company’s most valuable assets. Ensure your IP rights are protected in every country your business is in:

• IP Registration: Ensuring property, such as your trademarks, are registered in each country of operation to secure protection.
• Enforcement Strategies: Developing a plan to enforce IP rights, which may involve navigating the legal systems of multiple countries.

Cross-Border Contracts and Agreements

Cross-border deals rely heavily on airtight legal contracts. They must be carefully drafted to address:

• Jurisdiction and Law: Specifying the governing law and jurisdiction that the contract is based on.
• Dispute Resolution: Choosing appropriate mechanisms that offer enforceability and neutrality.
• Cultural and Legal Norms: Understanding and respecting the cultural and legal nuances that influence business practices and legal agreements in each country.

Compliance with Data Protection and Privacy Laws

As businesses collect and process increasing amounts of data globally, compliance with data protection and privacy laws becomes more challenging but crucial.

• Understanding Global Data Protection Regulations: Familiarity with regional data protection laws is vital.
• Implementing Data Governance Frameworks: Establishing comprehensive data governance policies that ensure compliance and protect sensitive information across all operations.

Mitigating Risks through Due Diligence

• Legal Audits: Assessing the legal environment of the target market, including potential liabilities and regulatory compliance.
• Risk Management Strategies: Identifying risks and developing strategies to mitigate them, ensuring a smoother expansion process.

Seeking Expert Legal Counsel

The complexities of international expansion requires the guidance of expert legal counsel. Specialists in international business law can provide invaluable advice on structuring your expansion, navigating legal hurdles, and ensuring compliance across all aspects of your operations.

As a new entrant into a foreign market, you may not be as familiar with the local regulatory landscape as you may be back home, and this problem is compounded as laws and regulations constantly evolve. 

The best way around this is to seek the advice of local counsel who are well versed in the relevant areas of the law – LP Law Corporation’s global network allows for a seamless connection with our regional offices and to provide the contextualised advice that you need to set up here in Singapore.

Conclusion

By understanding and addressing the key legal considerations outlined in this guide, businesses can position themselves for successful global growth. Proactive legal planning and consultation are important, especially when countering the intricacies of  expanding internationally.

Ready to take your business across borders? Let our team guide you through the legal landscape with clarity and confidence. Reach out to us today for tailored advice and trusted expertise that supports your global ambitions.

The content of this article does not constitute legal advice and should not be relied on as such. Specific legal advice should be sought for your circumstances.

When starting a business in Singapore, knowing the different structures available and deciding on one that best fits your needs is important. You may want to consider things like the scale of your business, liability protection needs, start-up capital, compliance and growth plans. Professional legal advice can help you review and select the best option for your business goals and circumstances, providing you with the guidance and support you need. For more detailed information, reach out for a discussion with our experienced legal experts today.

1. Sole Proprietorship

The first and simplest business structure is a sole proprietorship, a low-risk business owned by a single individual.

Key features:

• Can be set up by a Singaporean citizen, Singapore permanent resident, employment pass holder, dependent pass holder or foreigner (However, if the owner is a foreigner, it is mandatory to appoint a local manager who is a Singapore resident.)
• Not a separate legal entity from business owner
• Unlimited liability for business owner
• Relatively simple and low-cost registration and compliance requirements
• Challenging to secure funding from investors and bank loans.
• Taxed as personal income

2. Partnership

A partnership is akin to a sole-proprietorship business but consisting of 2 to 20 partners.

Key features:

• Can be set up by at least 2 individuals who are Singaporean citizens, Singapore permanent residents, employment pass holders, dependent pass holders or foreigners (must appoint local manager)
• Not a separate legal entity from business owner
• Partners have joint and several and unlimited liability
• Relatively simple and low-cost registration and compliance requirements
• Challenging to secure funding from investors and bank loans.
• Taxed as personal income

Taxed as personal income

3. Limited Partnership (LP)

A limited partnership is a business with at least 1 General Partner (GP) and 1 Limited Partner (LP), with unlimited number of partners.

Key features:

• Can be set up by any local or foreign individual or company.
• Mandatory to appoint a local manager if all GPs are based outside Singapore.
• Not a separate legal entity from business owner
• GPs have unlimited liability, LPs have limited liability
• Relatively simple and low-cost registration and compliance requirements
• Taxed as personal income except for corporate partners

4. Limited Liability Partnership (LLP)

A limited liability company is one where all partners have limited liability, with no limit on number of partners.

Key features:

• Can be set up by any local or foreign individual or company.
• Mandatory to appoint a local manager
• Operates as a separate legal entity from business owners
• Partners are not held personally liable for debts and losses incurred by the LLP
• Relatively simple registration and set-up in comparison to a company
• Taxed as personal income except for corporate partners

5. Local Company

Companies are the most common type of structure when doing business in Singapore. There are 3 main types of local companies:

Exempt Private Company – maximum of 20 shareholders in the business.

Private Company – not more than 50 shareholders in the business.

Public Company – more than 50 shareholders in the business, but not to be confused with a public listed company (where a company’s shares are listed on a stock exchange).

Key features:

• Can be set up by any local or foreign individual or company.
• Mandatory to have a local director, unless a foreigner applies for an EntrePass.
• Operates as a separate legal entity from shareholders.
• All shareholders have limited liability, up to the total amount they had invested into the company
• More complex and costly registration and compliance requirements
• Required to audit accounts and file annual returns with ACRA
• Easier to secure funding from investors and bank loans.
• More options for business and start-up grants available in Singapore.
• Taxed on corporate tax rates
• Enjoy (partial) tax exemption schemes for new companies that meet the requirements

When starting a business in Singapore, knowing the different structures available and deciding on one that best fits your needs is important. You may want to consider things like the scale of your business, liability protection needs, start-up capital, compliance and growth plans. Professional legal advice can help you review and select the best option for your business goals and circumstances, providing you with the guidance and support you need. For more detailed information, reach out for a discussion with our experienced legal experts today.

Disclaimer: The content of this article does not constitute legal advice and should not be relied on as such. Specific legal advice should be sought for your circumstances.