Singapore Clinched Second Spot In Asia For Ease Of Starting Business
Singapore has always been a top business destination in Asia, competing with Hong Kong for the top spot. And though we lost out to Hong Kong yet again, Singapore emerged top of countries like Korea, China, and India. The Global Business Complexity Index ranked seventy-seven jurisdictions globally in three areas – accounting and tax standards, human resources and payroll matters, and rules, regulations, and penalties. So let's find out why has Singapore ranked second globally in terms of starting a business.
Keeping up with the business landscapes...
The dynamics of business are always evolving globally, which changes compliance requirements, setting the bar higher for most companies to start their businesses. Companies need to be familiar with all the changes in the countries' legislation in order to stay compliant.
How does Singapore fare?
Singapore excelled, in particular, in the area of accounting and taxation, because of the clarity of rules. Filing requirements are straightforward and clear-cut, and the country adopts International Financial Reporting Standards. We have a competitive corporate tax rate of 17 per cent and we have Double Tax Agreements with more than 80 countries. That makes Singapore very attractive to foreigners. The Accounting and Corporate Regulatory Authority (ACRA) together with the Inland Revenue Authority of Singapore (IRAS) has over the years, streamlined the processes of e-filing. Almost every filing and change can be done online almost instantaneously.
Another area that has scored well is the island nation’s transparent and unbiased policies on employment and payroll guidelines. Singapore has a long-standing policy on ‘humans are our only resource’. For a long time, there is a strong focus on attracting talents to our shores. The Singapore Government has always emphasized skills upgrading for our workforce, people are encouraged to take on additional roles in companies, re-learn and redeploy human resources within an organization.
What about our competitors?
Hong Kong outperformed Singapore in the area of basic compliance regulations. The Republic has been enhancing its defence against money laundering activities and the funding of terrorism activities, which inevitably increased the complexity and business of doing business here. Recently, local banks have been tightening their compliance and regulations to foreign-owned companies opening a corporate bank account in Singapore. That also makes starting a business in Singapore slightly more challenging in this aspect. Learn more about opening a corporate bank account here.
Impact of COVID-19
COVID-19 pandemic has definitely accelerated the changes of regulatory frameworks in Asia to a much faster pace, to make it more encompassing for businesses to carry out activities. IRAS has granted extensions to filing deadlines for all companies and a three-month extension for corporate tax payments due to COVID-19.
Asia has the highest number of jurisdictions that encourage the submission of company documents, tax invoices through an authority portal. Singapore’s ACRA is one of them. Digital solutions and e-filing are the main forms of submissions right now, moving forward amid this global COVID-19 pandemic. Even if a vaccine is ready by the end of 2020, our way of conducting business is going to be different. Many businesses have already adopted digital solutions, bringing their physical shop and merchandise onto virtual space or virtual reality.
Businesses in Singapore are already accepting e-signatures for trust, property, and financial instruments in place of traditional methods. In fact, many legal firms and corporate secretary firms are already adopting such practices for overseas clients like sgcompanyservices.com.
Hence starting businesses in Singapore is a structured and straightforward process, and it will only become smoother moving forward.
If you have any questions on the process of setting up a company in Singapore, contact us today.
**This article was first written in June 2020
Editor's note: COVID-19 vaccine has already been rolled out progressively in Singapore. Singapore is already looking at how we can open up our borders to businesses and tourism once more.
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Opening A Corporate Bank Account In Singapore
Corporate Banking In Singapore
Singapore has become a forerunner to the title of Asia’s top financial hub. Singapore has always been a top destination for foreigners to incorporate a company. This is thanks to our transparent policies, governance, and relatively low corporate taxes. Opening a corporate bank account is vital to your operations in Singapore, for the ease of receiving monies and expenditures.
The major local banks are the Development Bank of Singapore (DBS), United Overseas Bank (UOB), and Oversea-Chinese Banking Corporation (OCBC). Some of the more prominent foreign banks are Malayan Banking Berhad (Maybank), Standard Chartered Bank, Citibank, Hong Kong, and Shanghai Banking Corporation (HSBC). The Monetary Authority of Singapore (MAS) is the central bank of Singapore, governing all financial institutions.
The process of opening a corporate bank account in Singapore is fairly straightforward and easy, provided all documents are in order. However, different banks have varying checks and processes. In the current pandemic, banks have switched to a different mode of operation as compared to pre-COVID-19 days. Online meetings are going to be new normal moving forward.
Documents needed for a corporate bank account
- Board of directors resolution.
- Certificate of incorporation.
- Business profile.
- Company’s constitution.
- Original passports or Singapore national identification cards (NRIC) of all company directors.
- Proof of residential addresses of all directors and shareholders.
Do note that the banks may ask for additional documents from concerned parties. Please be aware that for all identification documents, the original copies must be sighted. As the interview process is done online, all sighting of these documents is over a video call. In the event that anyone is unable to produce his or her passport for foreigners, or NRIC for Singaporeans, the application will be rejected.
Oversea-Chinese Banking Corporation (OCBC) is one of the banks that is currently adopting such practices. It requires more filling up of documents on the client’s part. Previously all you have to do is just to turn up and meet your mobile banker in person. The new online practice that they have adopted requires all shareholders and directors, including Nominee Directors, to have an online interview with the banker.
The lead time needed for corporate bank accounts to be open varies. It depends on the structure of the shareholders, may take anything between 1 week to 4 weeks for you to receive everything like your login ID and PIN and token.
Things to consider before deciding on which bank to go with
In general, most banks’ requirements are the same. What you have to consider is the response time and customer service aspect of it. These are some of the common factors to consider:
- Rates
- Initial deposit
- Fall below fee
- Accessibility of account services
- Online banking services and security
- Multi-currencies accounts
OCBC has no minimum deposit requirement for now as part of its marketing efforts. As a foreigner, you should always pick one that is able to offer its services entirely online. Flying to Singapore frequently to handle banking matters will be highly inefficient.
In most cases, you should go for the recommendations of your corporate secretary, as they work with corporate bankers on a frequent basis they will know better which bankers are more responsive and responsible.
A breakdown of features of different banks
There are certain bank charges for some of the features that you may use frequently as a foreigner. Such as telegraphic transfer for foreign currencies, or even inter-bank transfers. These are what the local banks are offering currently:
DBS Corporate Multi-Currency Account
- Minimum balance – SGD $10,000 or equivalent
- Minimum initial deposit – SGD $3,000 or equivalent
- SGD and 12 foreign currencies including USD, EUR, HKD, and AUD.
- Free digital token for authentication
- Monthly account fee – N.A.
- Annual account fee – SGD $40 or equivalent
- Fall-below fee – SGD $35 or equivalent
- Internet & mobile banking fee – Free
- Debit card – Free
- Cheque books – Free
OCBC Business Growth Account
- Minimum initial deposit – N.A.
- Monthly account fee – SGD $10. Waived for first 2 months
- Service fee – N.A.
- Early account closure fee – SGD $50 for accounts closed within 6 months of opening
- Excess fee for an overdraft – Minimum $30 or Prime rate + 4.75% per annum (whichever higher) on the excess amount
- Free digital token for authentication
- Cheque books – SGD $25 per book. First cheque book free
- Cheque clearing fee – SGD $0.75 per cheque
- Over counter branch transaction charges – SGD $20 per transaction
- For more detailed information on Multi-Currency Business Account, click here
UOB eBusiness Account
- Minimum balance – SGD $5,000
- Minimum initial deposit – SGD $1,000
- Annual account fee – $35 (with effect 1 January 2020)
- Monthly fall below fee – SGD $15. Waived for first 2 months
- Bulk payroll transactions – Free
- Internet banking with bulk functionalities – Free
- Transaction alerts on email – Free
- FAST transaction fee – Rebates for up to 60 outgoing PayNow FAST transactions per month
- Over counter branch transaction charges – SGD $20 per transaction
- Cheque clearing fee – SGD $0.75 per cheque
- Early account closure fee – SGD $30 for accounts closed within 6 months of opening
- For more detailed information on Global Currency Account, click here
Of course, there are many other banks offering similar services as well. Our advice is to choose the bank that you are the most comfortable with in terms of remote support and features. You can always contact us if you need our help with the opening of corporate bank accounts.
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Guide To Personal Income Tax For Foreigners Working In Singapore 2021
If you are a foreigner living and working in Singapore, you need to fulfil your legal liability for personal income tax. The rate taxable will differ, dependent on your tax residency status.
Who is a tax resident?
Under the following circumstances, you are a tax resident of Singapore:
- Staying in Singapore for at least 183 days of a year – Tax resident for that particular year.
- Staying in Singapore of at least 183 days for a continuous period over 2 years and the employment period must be for 2 calendar years – Tax resident for both years.
- Stayin Singapore for consecutively 3 years – Tax resident for all 3 years.
Tax residents will be allowed to claim tax reliefs where applicable and they are taxed at progressive rates.
The tax resident will be taxed at a rate beginning from 0% on the first S$20,000, subsequently up to 22% on the amount above S$320,000. (annually)
For the YA 2019, there is a personal rebate of 50% for individual tax residents, up to a maximum of S$200.
Besides claiming tax reliefs, you can save on tax as a foreigner if you make donations to any approved charities or your native country has a double taxation treaty with Singapore.
What about non-residents?
For non-residents, they will be taxed at a flat rate of 15% or resident rates, whichever is higher. Non-residents do not enjoy any tax reliefs.
The prevailing rate of 22% applies for director’s fees and other forms of income.
Stock options as a form of employment benefit will also be part of the taxable employment income.
Do take note that overseas income derived overseas, Singapore-derived dividends and bank interests are not taxable.
The deadline to file for your personal income tax is different from that of a corporate income tax. Personal income tax will be assessed on a preceding year basis ending 31st December. The deadline to file personal income tax is by the 15th of April annually.
Need help on your tax assessment? We can help. Get in touch with us today!
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How To Choose A Suitable Corporate Secretary For You
Roles of a Corporate Secretary in Singapore
All companies incorporated in Singapore are mandated by law, to have a named individual sit on board as a company secretary. The roles of a company secretary are mainly to ensure that the company meets with all regulations and compliance matters as set out by law and the Accounting and Corporate Regulatory Authority (ACRA). Failure to do so will result in penalties, and in serious cases imprisonment.
As this is a critical role in the functions of a company, most companies choose to engage the services of a professional corporate secretarial firm. There are many service providers out there in the market. Thus, choosing one that is suitable for your company's operations is crucial.
ACRA regulations
All companies have to appoint a corporate secretary within six (6) months of its incorporation. The corporate secretary must be someone who is a resident in Singapore, meaning a Singapore citizen, Singapore Permanent Resident (PR), or EntrePass holder. In layman terms, that named individual must be residing physically in Singapore.
In certain cases, a corporate secretary may be legally liable for any failures in compliance matters as set out by ACRA. Directors can be the corporate secretary as well, so long as there is more than one director in the company. This is in accordance with section 171(1E) of the Companies Act, the sole director in a company is disallowed to be a corporate secretary in the company.
Requirements to be a Corporate Secretary
Needless to say, a corporate secretary has to be competent in his or her duties. As stated in section 171(1AA) of the Companies Act, a corporate secretary in a public company have to fulfil at least one of these requirements:
- Has been acting as a corporate secretary for a minimum of three (3) in the five (5) years immediately, before his or her appointment as a corporate secretary in the public company.
- A member of the Institute of Certified Public Accountants of Singapore (ICPAS).
- A Qualified Individual defined in the Legal Profession Act.
- A member of the Singapore Association of the Institute of Chartered Secretaries and Administrators (SAICSA).
- A public accountant registered under the Accountants Act.
- A member of the Association of International Accountants (AIA) (Singapore branch).
- A member of the Institute of Company Accountants, Singapore (IComA).
Some companies will choose to have their own associates, or friends, or family members to take up corporate secretary roles for them, so long as they are qualified as set out by the above guideline.
Services provided by Corporate Secretaries
The duties and services done by corporate secretaries are mainly in relation to compliance matters. The services provided are as below but are not limited to:
- Update and file documents with ACRA.
- Maintaining an updated statutory register.
- Preparing meeting minutes and documents required for an Annual General Meeting (AGM).
The difference between a normal corporate secretarial firm and a competent one is that a good corporate secretarial firm will provide additional services. These will help to facilitate the smooth operation of your business and also the incorporation process. They are but are not limited to:
- Nominee director services
- Bookkeeping and taxation matters consultancy
- Legal matters advisory
There are more services that may or may not be stated explicitly on their websites, but it will be advisable to ask them directly. Corporate secretarial firms which are providing such additional services are usually the ones more reliable and competent.
A good corporate secretary is an invaluable asset to the company as they can take on additional roles as well. Such as providing advice to directors in the company, in areas of legal or compliance-related matters.
Can I choose not to engage a corporate secretarial firm?
There are no written regulations from ACRA that state you must engage a corporate secretarial firm to execute corporate secretarial work for your company. However, some of the companies may not see the value of engaging a professional corporate secretary. This is commonly known as the 'Do-It-Yourself' (DIY) secretary. He or she is just an ordinary member (employee) of the company who is qualified. The selection criteria depend on whether you are a private or public company.
For public companies, he or she must be a qualified individual or registered filing agent with ACRA, stipulated in section 171(1AA) of the Companies Act. There is a set of requirements and you will have to submit an application on ACRA to be a qualified individual or registered agent.
In short, this means that while public companies can avoid engaging a corporate secretarial firm, they have to ensure that these individuals are fully qualified to act as a company secretary in accordance with the qualifications above.
Private companies can appoint anyone with a valid Singpass, meaning ordinarily resident in Singapore, to be their corporate secretary. Define as an individual who has the 'requisite knowledge and experience to discharge the functions of secretary of the company' in the Companies Act section 171(1A). They can choose not to engage a professional corporate secretarial firm, instead, they can appoint friends or family members so long as they have a valid Singpass.
Which is a better option?
One of the little benefits of getting such a DIY corporate secretary is savings on the annual fees and other ancillary fees charged by a professional corporate secretarial firm. You probably save some time on doing everything internally within your company, without the need to liaise with an external party as some are usually non-responsive.
However, a DIY secretary may not have the necessary experience and knowledge compared to a professional corporate secretary. A DIY secretary may not be in tune with the latest changes in regulations and compliance matters with ACRA. This may cause a lapse in missing filing deadlines or gaps in compliance.
Compliance mistakes are usually costly, and they may result in penalties, fines for the company, and in more serious cases, imprisonment for the secretary or directors. They will also risk being barred from being a company's director or secretary for life.
Public companies are unable to appoint just any individual with a valid Singpass. It is definitely worthwhile to engage a professional corporate secretarial firm. They have all the qualifications as stipulated by ACRA, and they can ensure that you as a public company, comply with ACRA regulations. Similarly for private companies, it is advisable to appoint a professional corporate secretarial firm to handle all compliance matters. This is so that you can focus on your business operations.
So what are the qualities of a good corporate secretarial firm?
Some of the important traits of a good corporate secretarial firm are:
- Fast and responsive to your queries.
- Although there is ample time for filing documents with ACRA, there are many business decisions to make based on regulations. A responsive corporate secretary will ensure that your company matters are timely settled within the stipulated deadline.
- Highly organised and details oriented
- With multiple responsibilities and compliance duties, he or she needs to be able to handle multiple tasks simultaneously.
- Time management and planning
- Corporate secretaries have to make sure companies' filing of documents are in compliance with their deadlines; as such, they need to have great time management skills.
- Digitised platform
- It comes as no surprise that this is one important trait. ACRA has already moved on to the digital platform. You can complete all filings online. If you have multiple companies across the world, you may be operating in a time zone different from Singapore's. So it is crucial to have all your company's key documents readily available to you via an online platform, twenty-four (24) hours a day.
- Team of experienced professionals
- To save you precious time, it will be prudent to engage a corporate secretarial firm that is an all-rounded service provider. This can significantly reduce your stress and time spent running around searching for lawyers, tax consultants, bankers, accountants. You can just deal with one (1) single entity to get all that you need to be done.
Costs involved
Typically most corporate secretarial firms have their prices up on their website. Everything is pretty much transparent. However, for ancillary matters such as legal or taxation, you may check with them directly.
Most firms will have an upfront fee for incorporation and other matters, and subsequently, there will be pricing for renewal on an annual basis such as this. The standard duration for every renewal will generally be a 1-year basis.
Significance of hiring a corporate secretary
Engaging a competent corporate secretary is the first major task that you need to decide before incorporating a company. In the long term, the right corporate secretarial firm will ensure the smooth operation of your company.
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What Is Paid-up Capital
When most company owners start a company, most often than not, never give much thought about their paid-up capital. Quite a number of company owners do not know what it is. It is the amount of money shareholders pay to a company, in exchange for shares in the company.
Thereafter, when a company sells its shares on the primary market to investors directly, the company is offering new shares in exchange for cash to operate its business. In the secondary market, investors can trade among themselves. Therefore any capital that belongs to the company, is for the company's day-to-day operating and business expenses.
What is the minimum paid-up capital?
The minimum paid-up capital is $1 per shareholder in Singapore. Once the company is incorporated, it must be paid and deposited into the company's bank account immediately once the bank account is opened. For illustration, if the company has 4 shareholders and they each own a 25% share of the company with $20,000 paid-up capital, each of them must pay $5,000 into the company's bank account. As mentioned, this money is for running the company's business.
In the event, if a company is winding up, the creditors can lay a claim to whatever unused capital. A high paid-up capital would signify that the company has strong backing. That is the reason why for certain government tenders, there is a minimum paid-up capital requirement, especially for construction-related tenders. Imagine encountering a company that only has a capital of Singapore Dollars $1. I do not think any companies will deal with such a company as it doesn't instil confidence.
Paid-up capital is crucial because it represents money that is not from any financial institutions. A company that has sold all its issued shares is understood to be fully paid up. To raise more capital, the only way is to borrow money from financial institutions or individuals or to get authorisation from its existing shareholders to sell more shares. In order to understand the balance of a company’s operations, investors, or the management of a company look at the paid-up capital.
If you have any questions about setting up a company in Singapore, do not hesitate to contact us today.
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Government Salary Support - Jobs Growth Incentive
If you have increased your local hiring headcount between September 2020 till the end of February 2021, your company may be eligible for up to 50% salary support from the government for your new local hires. If your company is looking to expand, there is no better time to consider hiring locals right now. The Jobs Growth Incentive is here to help.
How To Be Eligible For Jobs Growth Incentive
In order to be eligible, your company must fulfil the below conditions:
- The hiring period must be between September 2020 to February 2021 (inclusive)
- The overall local workforce size during this qualifying period must see an increase compared to August 2020.
- The local workforce count must be earning at least S$1,400 and above to be eligible for consideration.
- The company must exist before 16th August 2020.
Which Of The Employees Will Be Eligible and How To Compute The Incentive.
- New local hires between the period of September 2020 to February 2021 are eligible.
- For new local hires aged 40 and above, the company will receive a 50% rebate of the first S$5,000 gross monthly wage for up to 12 months. (Maximum S$30,000)
- For new local hires aged below 40, the company will receive a 25% rebate of the first S$5,000 gross monthly wage for up to 12 months. (Maximum $15,000)
- In order to enjoy the full 12 months of salary incentive, the employer must meet the criteria continuously.
- If any of your previous local employees are to leave the company during these 12 months, the incentive will be adjusted downwards accordingly. This is to encourage the retention of employees by the company.
- The Jobs Growth Incentive is an addition to the Jobs Support Scheme Incentive.
When Will You Receive the Payout?
The first payout will commence in March 2021. Subsequent payouts will take place quarterly. The computation of the payout is determined by the mandatory CPF contribution paid. You are strongly advised to make your CPF payments on time in order to be eligible for the incentives payout.
How To Apply For Jobs Growth Incentive Scheme
No action is required on your part. The payout is automatically computed and disbursed.
Would you like to find out more about the many government grants and incentives schemes available for your company? Talk to us today!
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Audit Exemption For Singapore Private Limited Companies 2021
Legislated in Singapore Companies Act, before filing with the Accounting and Corporate Regulatory Authority (ACRA), all private limited companies in Singapore are to prepare their annual financial statements and audit them. However, in certain cases, you can get an audit exemption.
In 2015, the Small Company Concept was legislated. It stipulates that if the private limited company fulfils certain conditions, the company can have an exemption from its accounts being audited.
To qualify as a small company, the private limited company must:
- Be a private company in that particular financial year; and
- Must meet at least 2 out of the 3 following conditions for the immediate past 2 financial years consecutively:
- For total annual revenue, to be not more than S$10 million.
- In terms of total assets, not more than S$10 million.
- No more than 50 employees in the company.
You will need to fulfil these in order to qualify for an audit exemption if the company is part of a group (i.e. subsidiary or holding company):
- The entire 'group' of companies must be a 'small group';
- The company must qualify as a small company.
To qualify as a small group, it must satisfy 2 out of the 3 quantitative conditions, on a consolidated basis for the immediate past two financial years consecutively. If the group has a total of five (5) companies, all of them can exempt themselves from the audit when they satisfy the said conditions.
During a financial year, once the small company is no longer a private company at any point in time, or does not meet 2 out of the 3 quantitative conditions for the past two immediate financial years consecutively, it does not qualify. Henceforth, the company must get an auditor to audit its financial statements.
Do not confuse yourself on audit exemption with filing annual accounts or returns. Exemption from an audit is not the same as exemption from filing annual accounts. Your company still need to prepare and file its unaudited annual financial statements.
If you need assistance with your bookkeeping and tax filing? Talk to us today.
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A Guide To Hiring Locals and Permanent Residents In Singapore.
This article serves to give companies looking to hire local and/or permanent resident employees a better understanding on what to take note during the hiring process.
UNDERSTANDING PAY STRUCTURE IN SINGAPORE
Companies generally have no hiring quota restrictions when they employ locals and/or singapore permanent residents. It is important to note that employers are required to pay social security for the employee. This is known as central provident fund a.k.a CPF. CPF is payable by the 14th of every month for the preceding month of employment.
For hiring a Singaporean with a gross fixed salary of $2500, here is the payment breakdown:
- Employee take home pay – 80% of $2500
- Employee’s mandatory contribution to CPF – 20% of $2500
- Employer’s mandatory contribution to CPF – 17% of $2500
- Employer’s mandatory contribution to SDL – 0.25% of $2500
Thus, when hiring a local or PR with a fixed monthly salary of $2500, the total outlay for the employer is $2,931.25.
If the employee is required to travel and or entertain in their field of work, such expenses may also be claimable. This will be subjected to the terms of employment.
LEAVE AND MEDICAL BENEFITS
For a full time office employee, the working hours are typically Mondays to Fridays, 9am to 6pm. This may vary however depending on the agreement between both parties.
There are 11 public holidays in Singapore whereby if the employee is required to work on those days, a off day in lieu will be given.
A typical employment contract will provide annual paid leave of between 7 to 21 days. You can consider starting with 7-14 days and increase them as the employee stays on in subsequent years. Leaves not utilised may be carried over to the following year depending on what is agreed on the employment contract.
There is also paid medical leaves. Employee must first obtain a medical certificate from the doctor certifying they are unfit for work before claiming paid medical leaves. They also ought to inform employer within 48 hours of their absence. The number of paid medical leaves range from 5 to a maximum of 14 days. (This is in tandem with the number of months employed).
If the doctor deem the employee necessary to be hospitalised, this will be offset from paid hospitalisation leave. Paid hospitalisation leave may be given up to 60 days per calendar year.
For mothers giving birth, they are also entitled for up to 16 weeks of paid maternal leaves. (Subject to eligibility criteria)
Last but not least, some employment contract may also provide for compassionate leave. This is additional benefit and is not mandatory. If not given as per contract, the employee may apply for unpaid leave for special circumstances.
TERMINATION OF EMPLOYMENT
The employee will be typically placed on probation for 3 to 6 months. During probation, if stipulated in contract, either party may end the employment relationship with immediate effect.
After probation period, it is typical for the employer to give at least 1 month notice if they are to terminate the employee’s service with the company. Salary due to the employee is payable during this 1 month notice period.
Ready To Hire A Talent Today?
Companies can list their job offer on many online job portals. Some examples are the mycareersfuture.gov.sg which is a government initiative or other major private portals such as JobStreet.com.sg and jobscentral.com.sg.
The job description should be as detailed as possible and it is highly suggested that the pay offered be in line with market. Doing so will help the company attract the right talent required.
Alternatively the company can consider outsourcing the hiring process to a professional 3rd party. It is important to ensure the 3rd party holds a valid employment agency license in Singapore. An experienced employment agency will have an extensive talent database. They will also be able to assist in the crafting of the job description, shortlisting of suitable applicants and in the successful placement of the selected talent.
Get in touch with us today if your company is looking for a reliable employment agency in Singapore to help with the hiring process!
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Important Compliance Needed For Singapore Companies
Before you decide to incorporate a company, there are several compliance requirements to take note of for Singapore companies. As a company director, you must ensure that your company is compliant and follows regulatory requirements, failure to do so will subject your company to fines and/or penalties. As directors, if the offence is of a criminal nature, you may be personally liable for fines and/or jail.
What you need to know:
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Appointing a Company Director
The company needs at least one director who is a resident of Singapore, meaning to say, he or she must reside in Singapore. However, do not confuse this with being a Singapore Citizen (SC) or Singapore Permanent Resident (SPR). He or she need not be an SC or SPR to be a company director. He or she cannot be disqualified from acting as director of a Singapore company or an undischarged bankrupt under the Companies Act. To do this, the company can declare the director's details and complete Form 45.
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A Registered Singapore Address
The company must have a registered Singapore address. This local address must be open to the public. It should operate during normal office hours, it will be from Mondays to Fridays, 9 am to 5 pm typically. Ideally, all registers of the company must be kept at the same address. If your company plans to engage a corporate secretarial firm like ours, our registered office address will be available to receive all your company’s mails as well as keep the registers of your company.
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Appointing a Company Secretary
Within six (6) months of the incorporation of your company, you need to appoint your Company Secretary. As with a Company Director, the Company Secretary must be a qualified Singapore resident. The Company Secretary should complete Form 45B.
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Appointing a Company Auditor
If your company is private, an audit exemption can be granted if it meets at least 2 of the 3 conditions:
a) Total annual revenue is not more than SGD$10 million
b) Total assets are not more than SGD $10 million
c) Not more than 50 employees in your company
Within three months from the date of incorporation, a company must appoint an auditor. All public companies must hire an auditor. -
Accounting Records
Your company should set up an accounting system as soon as it starts conducting business. The Registrar of Accounting and Corporate Regulatory Authority (ACRA) expects all companies to keep proper accounting records. The Registrar has the right to call for an audit anytime he or she chooses to. Your company can be in trouble with the relevant authorities for failure to do so. Here at SG Company Services, we recommend using Xero as it is cloud-based accounting software. You can check out our review of Xero here.
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Company Letterhead and Stamp
All official company documents must contain the Company Name and Unique Entity Number (UEN). The company letterhead should be on all company documents. If the documents do not bear the company’s name and UEN, a company stamp will be required. Our corporate secretarial firm will assist your company in generating one free letterhead for usage, and the making of company stamps if required. Once ready, we will hand it over to your company’s director(s).
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Maintenance of Register of Controllers
Starting from 31st March 2017, all companies must keep a hard or soft copy of the register of controllers. The register must be accessible during office hours as mentioned above. However, with effect from 30 July 2020, all companies must lodge this information in their Register of Registrable Controllers (RORC), with the central register of ACRA, the deadline is 29 September 2020. You can read more on the lodging of the Register of Registrable Controllers here.
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Maintenance of Public Register of Members (For Foreign Company)
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Application of Business Licence
In some instances, you cannot do the business activity as defined in your SSIC code even after you have successfully incorporated a Singapore company. Due to the reason that there are some business activities that will need a Business Licence, such as the import and export of fresh vegetables and meat, the import of controlled items like alcohol or tobacco. Find out more about the application of business licenses here. However, you must first incorporate a Singapore company before you can apply for a business license. The order of the process is compulsory.
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Maintenance of Records of any Conflict of Interest by any Company Directors
At the point of appointing your company directors, they must declare any potential conflict of interest to your company. This exercise is generally repeated annually through declaration.
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Goods and Services Tax (GST) Registration
Your Singapore company will need to be GST registered with the Inland Revenue Authority of Singapore (IRAS) if the projected or annual revenue exceeds SGD$1 million ($1,000,000). Depending on the nature of your business, being GST registered has its own merits. If you need further advice, you should contact us.
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Changes in Company Particulars
Any changes made to your company particulars must be filed with ACRA within a given timeframe. Failure to do so will most definitely result in penalties. And in more serious cases, your company’s directors can be personally liable for these offences.
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Annual Return Filing
It is compulsory to file Annual Returns with ACRA for all companies. You can read more about the requirements here.
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Estimated Chargeable Income (ECI) Filing
Within 3 months after the end of your company's financial year, you need to file your ECI. You can also read more in detail here.
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Corporate Tax Filing
You need to file your company's Corporate Tax Returns with IRAS. The deadline to do e-filing is on the 15th of December every year.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
Yours Sincerely,
The team at SG Company Services
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What Is Estimated Chargeable Income (ECI)?
What is Estimated Chargeable Income (ECI)?
Estimated chargeable income (ECI) is an estimate of the company’s taxable income after deducting eligible expenses.
Starting from YA 2020, all companies are required to e-file their estimated chargeable income (ECI). They can do this within 3 months from the end of the financial year of the company. This is in addition to the yearly corporate tax filing that the company needs to do by the 15th December of every year.
Who Needs To File ECI?
Your company may excuse itself from filing ECI for the immediately ended YA if:
- Annual revenue is not more than S$5 million for the financial year and;
- ECI is nil for the YA
If your company for the particular financial year meets both of the conditions above, then your company may exempt itself from filing ECI. However, do note that the year-end corporate tax filing is still compulsory.
The following foreign entities can excused themselves from filing ECI:
- Foreign ship owners or charterers for whom the Shipping Return (PDF, 145KB) has been or will be submitted by the local shipping agent;
- Foreign universities;
- Designated unit trusts and approved CPF unit trusts#
- Real estate investment trusts that have been granted the tax treatment under Section 43(2) of the Income Tax Act; and
- Any other specific case granted a waiver to furnish ECI by IRAS, e.g. via an advance ruling issued.
Benefits Of Filing ECI Early
Companies that file their estimated chargeable income (ECI) within the stipulated 3 months get to enjoy the privilege of paying their corporate tax via instalments. The privileges depend on the point of filing your ECI:
- 1 month from financial year-end - 10 months instalments
- 2 months from financial year-end - 8 months instalments
- 3 months from financial year-end - 6 months instalments
- 3 months after financial year-end - No instalments allowed
What Happens If The ECI Amount Is Different From Form C/C-S?
For any difference between the amount declared in ECI versus that of Form C/C-S, the excess (if any) will be refunded automatically. If there is a shortfall, the company will have to top up the difference within 1 month from the date of Notice of Assessment.
How To Compute and File ECI?
Prior to filing ECI, the company must have their financial statements (profit and loss statement) ready. The company can then either appoint someone internally to prepare and file the tax on behalf or hire a professional accountant to assist.
Need assistance to file estimated chargeable income for your company? Get in touch with us today!
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