Singapore has tightened its anti–money laundering, counter-proliferation financing, and counter‑terrorism financing (AML/CPF/CFT) framework for real estate transactions. These changes affect all parties involved in leasing, including corporates and relocation management companies (RMCs) that make payments on behalf of relocating employees.

The new procedure requires that all parties to a lease—individuals or entities—undergo due diligence, which may include source-of-funds verification. Further details can be found here: (https://www.cea.gov.sg/regulatory-matters/preventing-money-laundering-proliferation-financing-and-terrorism-financing)

It is important for clients and companies to understand what has changed, that third-party payments may now require additional documentation, and that alternative arrangements may be necessary.

Change Summary

Due diligence now requires estate agents to verify both their clients and unrepresented counterparties involved in the transaction, including employers or RMCs funding payments. Agents must screen all parties against sanctions lists and assess risks related to money laundering, terrorism financing, and proliferation financing. If red flags arise, the transaction must be halted and reported.

Corporate payors trigger additional due diligence. When the entity paying is not the contracted party to the lease (as most Singapore tenancy agreements are personal leases), agents must identify the paying entity, its beneficial owners, and control structure. They may need to verify the source of funds in higher-risk cases. Failure to provide the necessary information will prevent the transaction from proceeding.

New Requirement Highlights

Real estate agencies have increased responsibilities and must collect and retain this additional documentation to meet strengthened compliance and audit requirements. For employers or RMCs who wish to pay a landlord or real estate company directly (when the tenancy agreement is a personal lease), the following documents might be requested:

• Full identification and verification of the third-party payor (employer/RMC):
  • Incorporation details
  • Registered address
  • Nature of business
  • Beneficial owners (UBOs) or controllers
  • Ownership/management structure.

• Supporting documentation:
  • Corporate registration documents
  • Directors’ identification
  • Organizational chart
  • Proof of authority for the relocating employee or local representative
  • Where risk factors warrant—evidence of the source of funds/source of wealth

• Screening and risk assessment:
  • Sanctions screening and ML/TF/PF risk assessment for the tenant and the paying entity
  • Cessation and reporting obligations if there is suspicion or sanctions hit.

Please note: Interpretation and enforcement of these rules will vary across real estate companies. Larger agencies and developers are likely to take a stricter approach than some smaller players. Many real estate companies are still working on the best way to meet the newly required compliance while not overburdening their clients with added administration.

Recommendations

One option, should this change in compliance result in the request for the documentation above, is for the employee to make payments directly to the landlord and receive either an advance payment from the RMC/Corporation or a reimbursement of expenses.  This keeps the employee as the only party to the lease, subject to verification (in the case of a personal lease). For companies currently using corporate leases, the increased compliance and document requests may prompt a shift toward  personal leases to avoid the increased administrative burden.  Corporate‑named leases also trigger internal legal review and corporate signatory approval—which can significantly delay lease finalization.

For those companies who wish to continue making third party payments and are hampered by this new level of compliance, partner with Relo Network Asia (RNA) as an intermediary. As a locally regulated entity, RNA meets compliance requirements and can help facilitate smoother processing.

Preparation

While the impact of these compliance changes may not be immediate, we recommend that companies review their current relocation policies regarding direct payments to landlords or real estate companies for employees in Singapore. It may be necessary to decide whether your organization will undertake the full due diligence process or shift to alternative arrangements.

Educate employees on the due diligence requirements, emphasizing that it is standard procedure and explaining how the lease process differs when the RMC or the employer makes payments.

Encourage relocating employees to work with a realtor from our Relo Network Asia panel of realtors, who is not only familiar with the updated process but also with how it fits into the overall relocation support process.