Moving or growing your business to Singapore has many benefits. This South-east Asian nation is well-known, among other things, for its excellent position, politically stable climate, business-friendly policies, and as the entrance to other ASEAN countries.

Jim Rogers, a well-known Wall Street titan of American descent, relocated to Singapore in 2007. He was already aware of what the rest of the corporate world would eventually learn.

Singapore has a lot to offer the global business community. The following are some reasons why business owners, firms, and ventures of all sizes think Singapore is the best place to launch or grow their enterprise:

• Singapore is ranked #1 as the nation with the greatest trade openness.

• The maximum corporate tax rate on chargeable income is a flat 17%.

• Singapore has No Dividend or Capital Gains Taxes.

• In Singapore, there is No Inheritance, Death, or Estate Tax.

• Personal Tax rates range from 0% to 22% for incomes over S$320,000.

So what is it about Singapore that appeals to overseas businesses and entrepreneurs?

The Strategic Location of Singapore

Singapore’s strategic position is one of the main benefits of moving your company there. Due to Singapore’s location in the center of Southeast Asia, your company may reach a market of 2.8 billion people in just a few hours of travel. Singapore is regarded as a top International Maritime Center and has one of the busiest ports in the world.

More than 15 million people travel through Changi Airport in Singapore each year. The airport’s focus on efficiency, competition, and customer service have contributed to its status as the “Best Airport in the World” for 20 years running. Singapore’s Changi Airport, a center for the Asia-Pacific region, offers companies simple access to all of the continent’s key markets.

Singapore Is Meant for Business

Singapore is renowned for having a business-friendly environment that can draw significant foreign investments and business owners. You can easily start firms in Singapore using your ideas, and you can make large profits. Singapore’s government helps along the path and, in stark contrast to many Western countries, it merely takes approximately 1-2 days to establish a corporation. Simply put, Singapore is the world’s simplest place to start and run a business.

Outstanding Tax System in Singapore

Any entrepreneur’s main priority and one of the most important factors to take into account when establishing a business anywhere in the globe is taxes. Singapore’s low effective personal and corporate tax rates are one of its distinctive benefits. A tier system for personal income tax exists, with the lowest rate being 0% and the highest rate being 22% for income over S$320,000.

Similar to this, the maximum corporate tax rate on a company’s chargeable income is a flat rate of 17%. Singapore has a single-tier tax system; no capital gains taxes are levied on income that has been taxed at the corporate level, and dividends can be paid to shareholders tax-free.

The government has implemented a more inclusive consumption tax known as the Goods and Services Tax in an effort to wean the country off of its reliance on income taxes and to increase economic competitiveness (GST). Singapore continues to have one of the lowest GST rates in the world (now 7%), placing it below both the Asia-Pacific average of 10.5% and the global average VAT/GST rate of 16.4%.

Comprehensive Protection of Intellectual Property

Singapore has strict copyright regulations. Any kind of copyright infringement is against the law in Singapore, whether it comes from an individual or a business.

Singapore is a signatory to several important IP conventions and treaties, including the Patent Cooperation Treaty, Paris Convention, Berne Convention, Madrid Protocol, Budapest Treaty, Agreement on Trade-related aspects of IP rights, and World Intellectual Property Organization. As a result, Singapore businesses can also file for global trademark registration from Singapore.

A sincere and transparent government

Businesses need a strong political infrastructure to develop and prosper because they cannot operate in a vacuum. Singapore’s political system uses a logical, pro-business strategy to create laws, choose priorities, and set regulations. The goal of Singapore’s stable and well-organized administration is to move this country ahead of other industrialized nations.

Singapore Tax Policy on foreign-sourced income

What does the term “income from foreign sources” mean and how does it impact your Singapore company’s taxation? Learn more about what income from overseas sources is and why it is or is not taxable.

Please take note that the information is only intended for general use and is not a substitute for seeking professional advice on company tax matters.

According to Singapore’s Revenue Tax Act, the corporate tax is levied on income that is

• Earned in Singapore

• From outside Singapore, received in Singapore (subject to certain exemptions)

The topic of income with a Singaporean origin is covered in the first section. Income with a source outside of Singapore but received or perceived received in Singapore is the second component.

The following inquiries must be addressed in order to determine whether an income is liable to taxation in Singapore:

• Does the revenue meet the requirements to be considered income from a foreign source?

• Was the revenue from foreign sources “received” in Singapore?

• Was the foreign-sourced income “received” in Singapore subject to foreign taxation?

Check 1: Is the income eligible as income from a foreign source?

The following situations require a corporation to pay corporate tax in accordance with the Singapore Tax Ordinance:

• The organization operates a company, profession, or trade in Singapore;

• The business, profession, or trade generates earnings; and

• Singapore is where the earnings are sourced; alternatively

• Although they are sourced abroad, the revenues are “received” in Singapore (certain exemptions apply which will be discussed later)

The first two requirements are simple. However, the idea of where one’s income comes from might be debatable and complicated. There isn’t a general rule that works in every situation. Whether profits are generated in Singapore or are derived there depends on the type of gains and the transactions that generate them. When deciding where to find a source of income, among other things, the following general criteria are crucial:

• The guiding premise is to determine the taxpayer’s methods and locations for generating the income in question. In other words, the correct strategy is to pinpoint the operations that generated the pertinent earnings and determine the locations of those operations.

• Profits made by a business are frequently viewed as coming from Singapore when the primary location of business is in Singapore and there is no business presence abroad.

• The location of the contracts for purchase and sale is one of the elements that determines where earnings from trading in goods and commodities are made. “Effected” refers to more than just the contracts being properly executed. It also includes the discussion, agreement, and implementation of the contract provisions.

• The action that results in the commission income is the arranging of the business to be conducted between the principals when a business earns commission by finding purchasers for products or by finding suppliers of products needed by customers. The location where the commission agent’s duties are carried out is the source of income. The money will be regarded as having its source in Singapore if such operations are carried out there.

The kind and quality of the actions matter more when taking into account the pertinent facts than their quantity. The deciding aspect is how these actions affect earnings and what causes them.

Check 2: Was the income from abroad “received” in Singapore?

If some income falls under the definition of foreign-sourced income and is not received in Singapore, it is not subject to taxation. What is meant by the term “foreign-sourced income” “received in Singapore” has been the subject of much discussion.

The Inland Revenue Authority of Singapore (IRAS) has worked to make the meaning and how it affects a company’s tax liabilities more clear in order to prevent taxpayer confusion. According to IRAS explanations, the phrase “received in Singapore” denotes the following:

Funds Coming Into Singapore

This falls under the definition of “any sum from any revenue derived from outside Singapore which is sent to, communicated, or brought into Singapore” under IRAS section 10(25)(a). It describes the deposit of funds, dividends, or other types of monetary compensation from an external source into a Singaporean bank account held by a Singapore-based business.

Cash, checks, and other money orders could also be physically brought into Singapore and received by the business. The corporation should have earned this money through its commercial operations, such as sales, service fees, consultations, etc., and it should have gone toward its revenue or profit.

Payment of Debt

“Any sum from any revenue generated from outside Singapore which is utilised in or towards satisfaction of any debt incurred in relation of a trade or business carried on in Singapore,” according to Section 10(25)(b) of the IRAS explanation.

If your business uses gains from overseas transactions to settle all or a portion of a debt it has in Singapore—to a customer, a bank, or as a result of legal action—that debt is regarded as “income received in Singapore.” The funds might have been kept in a foreign bank account for a very long time.

However, it counts as “received in Singapore” after you utilize money to settle a debt there. The fact that the debt is being repaid in Singapore rather than elsewhere is crucial in this situation. The cash needs to be brought into Singapore in some way for this to happen.

Merchandise and Movable Property

Any sum from “any revenue received from outside Singapore which is applied to the purchase of any movable property which is brought into Singapore,” according to Section 10(25)(c). Items that can be transported between locations are referred to as movable property or movables. as opposed to real estate, land, or other immovable forms of fixed property.

Movable property refers to a person’s personal belongings. It could apply to products, raw materials, equipment, and other movables owned by your company and directly related to your line of work. The money utilized for those purchases counts as “income received in Singapore” if you use your foreign-sourced funds that have been stored abroad to acquire equipment abroad and subsequently import those products into Singapore.

How much tax the IRAS can impose on products whose value may have declined is one area of concern. The taxation will be determined by the original purchase price of the movable item, not by its book value or net worth at any given time, according to IRAS’s clarification.

In order to allay numerous worries expressed, IRAS has additionally provided the following clarifications:

• Singapore-based company: Foreign-sourced revenue is only subject to taxation if it pertains to a Singapore-based business. Without worrying about paying taxes, foreign-based businesses without a Singapore branch can use banks and investment management organizations in Singapore.

• Investment abroad – as long as the assets remain outside of Singapore, you are permitted to use your income earned abroad to invest in additional assets. However, your business cannot utilize such expenditures or investments as the foundation for a Singapore tax deduction claim.

• Non-income funds – If you can show that the money has nothing to do with business income, IRAS will agree to exempt non-income funds from taxation. To do this, you must be specific about income and non-income as well as the dates when the non-income funds were transferred to Singapore. You need to provide evidence that the income figures were not altered.

• You may demonstrate that the amount of money transported to Singapore is limited to the capital less any losses sustained. You are also permitted by IRAS to offset any foreign-sourced income that you received in Singapore with any overseas losses.

Check 3: Was the foreign-sourced income “received” in Singapore subject to foreign taxation?

If your company’s foreign-sourced earnings are assumed to have been “received in Singapore” as described in “Check 2” above, whether or not this income is liable to taxation in Singapore depends on whether it was taxed elsewhere. If the following criteria are satisfied, foreign-sourced income received in Singapore may be exempt from taxation:

• The foreign country where the revenue is received has a headline tax rate of at least 15%; and

• The foreign country from whence the indicated foreign income was obtained has imposed tax on it.

Your foreign income earned in Singapore is subject to taxation if it does not meet the aforementioned requirements. However, even if there isn’t a double-taxation agreement in existence, IRAS will offer you a tax credit on whatever taxes you did paid abroad. Singapore wants to prevent the imposition of two taxes on your company income.

What must I understand before registering my company in Singapore?

Prior to registering a Singaporean company, you must be aware of the following requirements:

• Before registering, your company name needs to be approved.

• There must be at least one resident* director appointed. Additional resident or non-resident directors might be appointed indefinitely. Both resident and non-resident directors must be at least 18 years old, in good financial standing, and have never been accused of malpractice.

• You may have 1 to 50 shareholders, who may or may not also serve as directors. Both local and foreign individuals or businesses are permitted to possess 100% of the shares held by shareholders. Shares in a Singapore business can be freely issued or transferred at any time after incorporation.

• Within six months of your Singapore company’s registration, you must name a qualified resident* company secretary. The company secretary cannot be a sole shareholder or a director.

• To form a Singapore business, you must have a minimum of S$1 in paid-up capital, sometimes referred to as share capital. After your firm is incorporated, you can always increase this sum.

• The registration address of the corporation must be a local, physical address in Singapore. Residential or Business Addresses are acceptable for the registered address, but a P.O. Box is not.

• Companies with a Singapore registration are eligible for enticing tax breaks and incentives. Your business pays less than 9% of the first S$300,000 in profits you generate each year, with a fixed rate of 17% applied after that. Companies based in Singapore are exempt from capital gains and dividend taxes.

*Refers to a Singaporean citizen, a permanent resident, or someone with a work visa for Singapore (EntrePass or Employment Pass)

I want to form a Singapore corporation even if I don’t live there. What do I need to understand?

In addition to the broad recommendations previously indicated, the following details should be taken into account by non-Singaporeans:

• According to Singaporean legislation, non-resident persons or corporations cannot self-register a company, so you must work with a professional firm to do so.

• If you are conducting your business from abroad, you are not required to obtain a Singapore work visa in order to incorporate a private limited company. If you need to travel to Singapore temporarily to take care of business, you can do so with a visiting visa. However, in these circumstances, you will need to recruit a local director to meet the minimum requirement of one resident director. On your behalf, we are able to elect a local resident director nominee.

• You must get an Employment Pass or Entrepreneur Pass in order to serve as the local resident director of your firm if you want to relocate to Singapore in order to run it.

• Unless you want to open a bank account at a Singapore-based bank, you can complete all work permit and Singapore company registration requirements without traveling to Singapore.

What documentation is needed to register my Singaporean business?

You’ll need to present the following paperwork in order to register your business in Singapore:

• Company name

• Detailed explanation of the company’s operations

• Particulars of the Shareholders

• Particulars of the Directors

• Official address

• Particulars of the Company secretary

• Constitution

If you hire a professional service firm, they will usually need the following documents from you in order to prepare the necessary paperwork:

• For non-residents: a copy of their passport, documentation of their residence abroad, and additional Know-Your-Client (KYC) data like bank reference letters, business and personal profiles, etc.

• Copy of Singapore identity card for residents

• Shareholders of corporate entities: a copy of the registration paperwork, such as the charter and certificate of incorporation

• Please be aware that all non-English documents must be accompanied by official translations.

How long does it take to register a Singaporean corporation, and how do I go about doing so?

The Accounting and Corporate Regulatory Authority (ACRA) of Singapore has entirely computerized the business registration process, making it possible, in most cases, to complete it the same day.

There are two main processes you must do in order to register your Singapore company:

Company Name reservation

New company names are typically accepted or rejected within one hour. The proposed name approval process may be delayed by a few days or weeks if it contains words (such as bank, finance, law, media, etc.) that may need to be reviewed and approved by a related foreign government authority.

Make certain that the Company Name:

• Is distinct from and not too similar to names of any current local companies

• Doesn’t violate any Trademarks

• Not vulgar or obscene

• That has not already been reserved

A name that has been approved will be held for four months following the application date.

Registration of the company

Company registration can be finished in a few hours after the incorporation request has been filed, provided the name has been authorized and the necessary paperwork has been properly signed. Authorities may, in very unusual circumstances, ask shareholders or directors of particular nationalities for additional information.

How will I be able to tell when my Singaporean corporation has been incorporated?

ACRA will validate your Singapore company’s registration by sending an official email notification. In Singapore, the email notice serves as the official certificate of formation and contains the company registration number.

The certificate of incorporation is no longer automatically issued in hard copy. However, you can submit an online request to ACRA for one for S$50 per copy after registering if you require one. The ACRA office will have hard copies of certificates of incorporation available the following day.

By submitting a request online and paying a small application fee, you can also get a PDF copy of your company’s business profile in addition to the certificate of formation. The following significant information is included in the company business profile, which is often accessible for download within an hour of the request.

• Name and registration number of the company

• Previous names for the company, if any

• Date of Incorporation

• The main activities of the company

• Paid-up capital

• Address for the registered office

• Shareholders’ information

• Directors’ information

• Company secretary information

In Singapore, the email notification of formation and business profile of the firm are adequate for all legal and contractual requirements, such as creating corporate bank accounts, signing office leases, and subscribing to telephone and internet services, among other things.

Following the registration of your Singapore company, you will very definitely need further materials, such as:

• Certificates of shares for each shareholder

• Share registration listing the shares each shareholder has been given.

• For the corporation, a company seal

• For the company, a rubber stamp

What must I do following the successful registration of my Singapore company?

You can open a corporate bank account with any of Singapore’s major banks, including HSBC, Standard Chartered, Citibank, DBS, OCBC, UOB, etc., after your Singapore company has been officially registered.

As part of the account opening process, many Singaporean banks demand the physical presence of the company principals. Choose a bank that does not have this criteria if you are unable to travel to Singapore.

Before you start operating your firm, you might also need to obtain one or more business licenses. Restaurants, educational institutions, travel agencies, financial services, businesses involved in import/export, etc. are among the commercial activities included in this category.

You must register for the Goods and Services Tax (GST), also known as Value Added Tax (VAT) or Sales Tax in other countries, if your company’s anticipated annual turnover exceeds SGD 1 million. GST-registered businesses are required to charge their customers this tax, which is presently 7%, on the goods and services they offer and pay this sum to the tax authorities.

Last but not least, for registered Singapore corporations, the Singapore Companies Act specifies specific annual reporting obligations and formalities.

Establishing a corporate bank account in Singapore

When it comes to opening a business bank account, Singapore enterprises have many possibilities. The majority of banks in Singapore include alluring features including multi-currency accounts, internet banking, credit cards, trade financing, the ability to transfer money freely across nations, and more.

In Singapore, opening a corporate bank account is a rather easy and straightforward process. To choose the bank that most closely satisfies the unique requirements of your business, it is crucial to evaluate the corporate accounts features of the various banks.

This guide’s objective is to give a general overview of account opening criteria. It will also help you select a bank that best suits the banking requirements of your business. This manual focuses on the financial requirements of small to midsize businesses.

Keep in mind that the data supplied here is just meant to serve as general advice. Once you have reduced your options to a few banks, you should personally verify the account features with each bank to make sure you are aware of their most recent services and policies. Banks operate in a highly competitive market and frequently change their product offerings to stay competitive.

Requirements for Opening a Singapore Account

For creating a corporate bank account in Singapore, the majority of banks typically have the following requirements:

1. When creating a business bank account, many banks demand that the majority directors and account signatories be physically present in Singapore for the documentation signing. Some financial institutions will take signatures on documents at one of their overseas locations or in front of a Notary Public.
2. The following documents are typically needed by banks. Depending on the situation, the bank could need more paperwork.
3. Forms for Opening a Corporate Account, completed (signed by authorized signatories as per the board resolution)
4. Committee of Directors Resolution authorizing the creation of the account and the account signatories (to be prepared by your company secretary)
5. Resolution authorizing the account’s opening and the account’s signatories, in a certified true copy (most of the banks have their own format and you just need to sign it)
6. Certified True Copy of Incorporation Certificate (must be certified by the company secretary or one of the directors)
7. From the company registrar, a verified true copy of the company’s business profile (must be certified by the company secretary or one of the directors)
8. Copy of the company’s Memorandum and Articles of Association (MAA) that has been certified as true (must be certified by the company secretary or one of the directors)
9. Certified True Copies of the Directors, Signatories, and Ultimate Beneficiary Owners’ Passports (or Singapore IC) and Residential Address Proof. Simply bring the original documents if you’re in Singapore, and the bank will produce a copy.

Local Banks in Singapore

Feature	DBS Bank	OCBC Bank
Is it possible to open an account without being present in Singapore physically? ** For all banks, having a physical presence is highly advised to prevent delays.	No, a face-to-face meeting requires the executive director and an authorized signatory to be present. However, depending on the circumstances, the bank may decide to make some exceptions. DBS Bank offers online apps that may allow you to avoid going to the branch and save time. Subject to the bank’s rules, account verification can be done by FaceTime, Skype, or a phone call.	No, a face-to-face meeting requires the executive director and an authorized signatory to be present. However, depending on the circumstances, the bank may decide to make some exceptions.

Singapore Dollar Current Account

Setup cost	None	None. But there is a monthly account fee of S$38 (waived for 1st 3 months)
Required deposit amount	S$1,000 to S$3,000	S$3,000
Minimum balance required	There is no minimum balance requirement for DBS Digital Business Accounts. DBS Business Accounts must maintain an average monthly balance of S$10,000 in order to avoid a S$35 monthly fee.	A $5,000 monthly average balance (waived for 1st 6 months). Afterwards, if the average monthly balance is less than S$5,000, S$35 each month.
Debit card	Absolutely no yearly fees. On all purchases, receive a 0.3% cash refund.	Yes, with a daily cash withdrawal cap of S$5,000 and a daily debit card transaction cap of S$10,000.
Cheque book	For a DBS Digital Business Account, books cost S$25. with DBS Business Account, Free-of-charge.	Yes
Credit card	Yes, for local entities with permission.	No. Debit card available linked to SGD account.
Internet banking	Free access, indeed. inquiries, domestic payments, and foreign payments. no maximum transaction limit (unless set by the customer). Both the PC and mobile app versions have complete transactional capabilities.	Yes. inquiries, domestic payments, and foreign payments. no maximum transaction limit (unless set by the customer).

Foreign Currency Account

Availability of foreign currency accounts	There are major currency options for both current accounts and fixed deposit accounts.	Various major currencies are supported for both current accounts and fixed deposit accounts.
Initial deposit necessary	varies according to currency (For example, USD1,000 and EUR8,00).	varies according to currency (For example, USD1,000 and EUR1,000).
Minimum balance	varies according to currency (For example, USD1,000 and EUR8,00).	Depending on the type of currency, usually equal to $500 USD or EUR.
Cheque book	For some currencies, yes.	For USD, yes.
Debit Card	Yes	No
Internet banking	Free access, indeed. inquiries, domestic payments, and foreign payments. no maximum transaction limit (unless set by the customer). Full transactional capabilities, including the DealOnline FX platform, on PC and mobile app versions.	Free access, indeed. inquiries, domestic payments, and foreign payments. no maximum transaction limit (unless set by the customer). Full transactional capabilities, including the DealOnline FX platform, on PC and mobile app versions.
Credit Card	Yes, pending approval.	No
Related Services
Business Insurance	Yes	Yes
Treasury Services: FX Spots, Bonds, IR Swaps, FX Options, Futures, Forwards, etc.	Yes	Yes
Business Loans**Generally the entity must have been in operation for a minimum of 1-3 years	Yes. The size of the loan is based on variables including the company’s history, the number of employees, local stock ownership, etc.	Yes. The size of the loan is based on variables including the company’s history, the number of employees, local stock ownership, etc.
Accounts payable services include check issuance, cashier’s orders, DDs, TTs, interbank GIRO payments, and internal fund transfers.	Yes	Yes
Services for Receivables: Incoming TT, Bill Payment, and GIRO Collections	Yes	Yes
Liquidity Management Services	Yes	Yes
Trade Finance Services: Import Products, Export Products, Bank Guarantees	Yes	Yes

International Banks in Singapore

Feature	Maybank (FlexiBiz)	Standard Chartered	Citibank (CitiBusiness)
Is it possible to open an account without being present in Singapore physically? ** For all banks, having a physical presence is highly advised to prevent delays.	As part of our due diligence procedure, we demand a face-to-face meeting from every authorized signatory prior to opening an account. However, in exceptional circumstances where one of the directors—who is neither a major shareholder nor an authorized signatory—cannot travel to Singapore, we can make arrangements for the client to visit one of our overseas branches (in London, New York, Hong Kong, China, Malaysia, Indonesia, the Philippines, Cambodia, Vietnam, Laos, and Myanmar), where they will help to verify the documents and signature before sending them back to Singapore for processing.	No. The executive director and authorized signatory must attend the meeting with the bank officer to do due diligence. Some exceptions, however, may be provided at the bank’s discretion; for example, current customers may visit any branch or agent the bank has designated anywhere in the world for identification verification and a teleconference regarding their due diligence.	No, a face-to-face meeting requires the executive director and an authorized signatory to be present. However, depending on the circumstances, the bank may decide to make some exceptions.

 

Singapore Dollar Current Account
Setup cost	Nil	Nil	Nil
Initial payment required	S$1,000	S$30,000	Comparable to S$100,000 (USD equivalent for USD account).
Required minimum balance	Nil	A monthly fee of $50 will be charged if the average balance is less than S$30,000.	S$50,000 or S$100 per month will be charged (same applies for both SGD and USD account). * Instead of per account, the minimum balance is determined by the relationship’s overall balance.
ATM card	No	No	Nil
Cheque book	Yes	Yes	Yes
Credit card	Yes^	No. Debit card available (only linked to SGD).	Corporate commercial cards available.
Internet banking	Yes	Yes. There will be a one-time setup fee of S$50.	Yes

Foreign Currency Account
Availability of foreign currency accounts	USD, GBP, EUR, CAD, AUD, NZD, HKD	There are major currency options for both current accounts and fixed deposit accounts.	There are major currency options for both current accounts and fixed deposit accounts.
Initial deposit	($1,000) (in the appropriate currency, excluding HKD $10,000).	US$30,000 (Varies based on currency).	Comparable to S$100,000 (USD equivalent for USD account).
Minimum balance	($1,000) (in the appropriate currency, excluding HKD $10,000).	Depending on the currency.	A monthly fee of S$200 will be charged if the average balance falls below US$200,000. * The minimum balance is determined by the relationship as a whole rather than by each account.
Cheque book	For USD only.	For USD only.	Yes
ATM Card	No	No	No
Internet banking	Yes	Yes. There will be a one-time setup fee of S$50.	Yes
Credit Card	Yes^	No	Yes
Related Services
Business Insurance	Yes	Yes	No
Treasury Services: FX Spots, Bonds, IR Swaps, FX Options, Futures, Forwards, etc.	Yes	Yes, subject to commercial activities.	Yes
Business Loans	Yes. Typically, the company needs to have been around for at least one to three years.	Yes. The size of the loan is based on variables including the company’s history, the number of employees, local stock ownership, etc. Financial statements for the past three years are necessary.	Yes. Depending on the bank’s evaluation.
Accounts payable services include check issuance, cashier’s orders, DDs, TTs, interbank GIRO payments, and internal fund transfers.	Yes	Yes	Yes
Services for Receivables: Incoming TT, Bill Payment, and GIRO Collections	Yes	Yes	Yes
Liquidity Management Services	Yes	Information unavailable	Yes
Services for Trade Finance: Bank Guarantees, Export Products, and Import Products	Yes	Yes	Yes

^ Maybank business credit card meets the following requirements:

Directors must be between the ages of 21 and 60; the company must be registered with ACRA in Singapore; at least one director must be a local (Singaporean or Singapore PR); The business must have been in operation for at least two years and have yearly sales of at least S$200,000; Applying for a business credit card that is fully secured by a time deposit with the bank (minimum S$10K limit) is an alternative if the company is recently founded.

Singapore is home to nearly all of the major banks in the world. As long as the required paperwork is presented and the banks are pleased with the information provided for the purposes of their internal due diligence, they will typically be happy to open a corporate bank account for any firm (whether Singapore-based or offshore).

Businesses should take into account outsourcing their annual compliance work. Why? Read on.

The procedure of submitting corporate taxes can frequently be laborious and challenging. Corporate service providers, however, can free up firms from the annual compliance work so they can instead devote their attention to expanding their organization.

All companies in Singapore are required by law and finances to file corporate taxes. Singapore has a flat corporation tax rate of 17%, which is further lowered by a number of grants and incentives from the government.

For companies in Singapore to file corporate tax returns on time and take advantage of any applicable tax incentives, proper documentation is crucial. For 2021, the deadline for corporate tax filing is Nov 30.

For firms with limited resources or time, compiling tax-related documents can be a time-consuming chore or a huge burden. By outsourcing corporate tax preparation, busy executives can fulfill compliance needs while maintaining their attention on expanding the company. Here are some ways that tax outsourcing might benefit Singaporean companies:

Simplifies the gathering of data

For internal accounting and finance executives, the end of a fiscal year is typically peak season. These executives typically have to consolidate all financial data for the year, create budgets for the following year, and file corporate tax papers by the required tax deadlines.

It may not be reasonable or practical for these departments to gather all the information required to cover all bases and permit the greatest possible Singapore tax savings during this busy season. Before the books are closed, they might just be able to gather the essentials.

When firms in Singapore contract with an outside accounting firm to prepare their taxes, the firm handles the labor-intensive data collection, organization, and sorting throughout the fiscal year. This frees up internal finance departments to locate the information required for filing papers.

Guarantees adherence to tax laws

Singapore’s tax rules are continuously changing to reflect industry trends and governmental goals as a rising business-friendly regime. Eight tax adjustments that apply to Singaporean firms were announced in the Singapore Budget just this year, excluding sector-specific tax adjustments.

In-house accounting and finance professionals may find it difficult to keep up with the latest developments in Singapore tax law because they also have other financial responsibilities and commitments to their parent company.

Outsourced accounting firms can be depended on for up-to-date knowledge regarding corporate tax adjustments that effect businesses because of their unique specialization in accounting and tax services. Large outsourced accounting companies will have knowledge of how new tax directives affect clients from various industries and will be able to advise clients on the appropriate course of action.

In-house financiers are now free to concentrate on building plans using the in-depth knowledge that the outsourced accounting firms have offered without having to worry about non-compliance or missing out on tax-saving opportunities.

Guard crucial tax information

To properly file corporate tax returns, financial data security is crucial. Sensitive corporate information must be both accessible and secure at all times, which may be a difficult balance for organizations in Singapore to achieve.

Accountants may need to access data while on the go to meet deadlines during peak season. However, this data are susceptible to hackers, breaches, and theft due to personal devices and open networks (such free WiFi connections).

To guarantee that client data is secure, outsourced accounting companies typically invest in enterprise-level data security and protection technologies. These databases typically contain huge volumes of tax and financial data. They will also have to keep their clients informed on the most recent data privacy and security issues in order to retain these enterprise-level protections.

A third-party vendor provides a safe Businesses in Singapore can govern their sensitive financial data in a safer environment by using an outsourced provider, which also reduces the chance that the data will be hacked or exposed to security risks when used with unidentified devices or networks. Environment for Singaporean enterprises to keep control of their private financial information, while reducing the danger of the information being hacked and exposed to security risks via unidentified devices and networks.

Ensure data accuracy

An important component of filing corporation taxes is paying attention to detail. In addition to checking that all numbers are accurate, accountants who are preparing paperwork must have a thorough understanding of tax regulations in order to deal with any issues that may arise throughout the course of the fiscal year.

Many Singaporean organizations may not be able to achieve or be practical with such thoroughness because they may have in-house accountants combining bookkeeping with other administrative and financial tasks.

Offering specialized filing services for their clients allows external accounting firms and corporate service providers to help minimize errors and omissions. By outsourcing to a company that manages many clients’ filing deadlines, it is also ensured that documents are submitted on time, assisting Singaporean companies to stay out of trouble and avoid fines.

Helps businesses concentrate on their primary services

In a market as competitive as Singapore, where industry players aspire to not only perform locally but also expand regionally, value creation is essential to any company’s success. Filing corporate taxes can be a time-consuming process that consumes time that could be spent on activities and services of higher value.

This is especially important for small firms and businesses that are less than five years old because they need to build their enterprises and create high-value products in order to survive and grow.

The process of locating the appropriate paperwork can be sped up by outsourcing corporate tax filing to an outside accounting company, which in turn reduces the turnaround time for submission. By allowing account and finance executives to concentrate on tasks like client care, value creation, marketing, and business growth, outsourcing corporate tax filing also boosts productivity and profitability.

Lower expenses

Through the following methods, outsourcing annual compliance can save ongoing business administration costs:

• It can take time and money to find and train new staff, and knowledge and skills occasionally disappear with the departing employees as well.

• New business management technologies, such as accounting and compliance software, can be expensive and need extensive training.

• Managing enterprise data insecurely can also put data privacy at risk and result in costly fines.

Frequently Asked Questions About Singapore Corporate Tax

You undoubtedly have concerns about how to make your Singapore business function as smoothly as possible if you’re thinking about starting a new company there or if it’s already up and running. We at Singapore-incorporations will provide the solutions and aid in the expansion of your company.

In order to give you a head start on establishing your business in Singapore, we have compiled a list of the most frequently asked questions.

Will capital gains be tax-free if stock trading is a company’s main activity?

A corporation that buys and sells investments or shares with the intention of turning a profit is referred to as an investment or stock dealing company. The company’s trading stocks are its investments and shares. Therefore, under S10(1)(a) of the Income Tax Act, any gain from the disposal of these investments is taxable.

Is income received in nations without a tax treaty with Singapore eligible for a tax credit?

Yes. According to Section 50A of the Singapore Income Tax Act, you are eligible for a unilateral tax credit for the overseas taxes paid on the following types of income:

• Earnings from any professional, consulting, or other services provided outside of Singapore.

• Dividends

• Profits made by a Singapore-based company’s foreign division.

You must be a tax resident in Singapore and meet all other requirements imposed by the tax authority in order to claim the aforementioned unilateral tax credit.

If there is no profit in the first three years, may the tax exemption be carried over to the following years?

No, your chargeable income and tax payable will be zero if, during any of the first three tax years, your firm experiences losses or has no income (for example, because operations have not yet begun). Since there is no chargeable income in this situation, your business is not eligible to benefit from the tax exemption program for new start-up businesses for that particular tax year. The first three consecutive tax years will still be determined using that specific tax year, though.

What is Singapore’s corporation tax rate?

The corporate income tax rate in Singapore is 17% flat. If all eligibility requirements established by the authority are satisfied, tax incentives are offered for yearly profits up to S$300,000 that lower the effective corporation tax rate below 9%.

What is the deadline for filing corporation taxes?

November 30 is when Singaporeans must submit their final company tax return. The tax return must be filed for the fiscal year that concluded in the previous calendar year because it is filed on a prior-year basis.

But keep in mind that every company must submit an estimated tax return three months after the end of its fiscal year.

Do Singaporean corporations have to pay taxes on capital gains?

Singapore has a tax-free capital gains system.

Are shareholder dividends taxed for Singaporean companies?

Singapore companies are exempt from dividend taxes. Your company’s profits can be transferred to shareholders tax-free once you’ve paid corporate income tax on them.

What tax benefits are offered to new businesses in Singapore?

Since 2005, new tax incentives have been made available to Singaporean start-up private limited businesses to encourage entrepreneurship and SMEs’ expansion.

A newly incorporated company that meets the requirements of the new scheme—namely, that it be incorporated in Singapore, that it must be a Singapore tax resident, and that it have no more than 20 shareholders, at least one of whom must be an individual shareholder holding at least 10% of shares—will be taxed as follows:

• For each of its first three successive tax years, the corporation paid no corporate tax on the first S$100,000 in taxable income and an effective tax rate of about 8.5% on the following S$200,000. Over $300,000 in taxable income will be subject to the headline corporate tax rate of 17%.

• On taxable income up to S$300,000 per year, there is an effective tax rate of about 8.5% as of the fourth tax year. Over $300,000 in taxable income will be subject to the headline corporate tax rate of 17%.

For example, if your taxable income is S$500,000 per year, the following is your effective corporate tax rate depending on the exemption:

First Three Years

Taxable Income (SGD)	Tax Rate
0 – 100,000	0%
100,001 – 300,000	8.5%
300,001 – 500,000	17%

Fourth Year Onwards

Taxable Income (SGD)	Tax Rate
0 – 300,000	8.5%
300,001 – 500,000	17%

YA 2020 Onwards

• 75% of the first $100,000 of normally taxable income is exempt.

• Another 50% exemption on the next $100,000 of normally taxable income

All new companies that meet the aforementioned requirements are eligible for the tax exemption, with the exception of those whose primary activity is holding and developing real estate for sale, investment, or both.

Can shareholders abroad receive the post-tax company profits?

Dividend income is typically used to describe the post-tax company profit distribution to shareholders. Dividends can be repatriated to shareholders anywhere in the world without extra tax repercussions as far as Singapore is concerned.

The local tax regulations of the foreign shareholders’ nation and the applicable tax treaty between Singapore and that country will determine whether the dividend income is subject to taxation there.

Is the distribution of corporate profits to shareholders taxed?

Not at all. In the one-tier corporation tax system in place today, the tax a company pays on its chargeable income is the last tax. In Singapore, all dividend payments made by a corporation are exempt from taxation in the hands of the shareholders.

If our company did not generate any profits throughout the year, do we still need to file a tax return?

Yes. Every Singaporean company is required to submit an annual tax return.

How far can business losses be carried forward?

There will be unutilised losses from the tax year if your company has business losses in a year and the adjusted losses were greater than the other sources of income or if there were no other sources of income to offset the trade losses.

If your company satisfies the shareholding test and there hasn’t been a significant change in its shareholders’ shareholdings as of the relevant dates as determined by authority, the unutilized losses may be carried forward to be offset against your company’s assessable income for the following tax years.

What are the tax laws regarding royalties?

Revenue from the use of patents, trademarks, and copyrights is referred to as royalty revenue. Taxable royalties include those produced outside of Singapore and received in Singapore, as well as those that are accrued in or derived from Singapore.