Open your business in Singapore
The result of the training at the Singapore Academy of Corporate Management can be the desire of doctoral students to open their own business in Singapore or to bring to the Asian markets products and services of existing companies. Legal partners and international consultants of the Academy provide following opportunities to doctoral students and graduates: opening their own business in Singapore - company or representative office of an offshore company, as well as unique professional advice on licensing, opening bank accounts, auditing and optimizing the costs of doing business. Also, it is possible to acquire a ready-made company in Singapore, with a successful history and a positive business reputation.
Singapore is one of the leading international financial centers in the region. Incorporating a company in Singapore can provide a tax efficient corporate structure in order to conduct international business. Singapore is a city state located at the southern tip of the Malaysian Peninsular with a population of approximately 4.8 million. It is known as one of the four ‘Asian Tigers’ and is the major center for business and trade within the region.
The official business language in Singapore is English but Mandarin and Malay are also widely spoken. The work force is well educated and hard working with a high level of expertise. Singapore is one of the leading international financial centers in the region and offshore investors will find most of the major banks present along with numerous financial institutions, investment management companies and accounting and legal firms.
The single ruling party since independence in 1965 is the people’s action party. the government effectively plans and manages the social and economic development of the country resulting in Singapore becoming one of the most politically stable and corruption free countries in the world. In 2006 a study by KPMG rated Singapore as one of the most competitive business locations amongst industrialized countries in the world.
The World Bank’s ‘Doing Business 2011′ study has also recently concluded that Singapore is the best country in which to run a business. The study rates 183 countries on the ease of which they allow firms to operate using criteria such as how easy it is to start a business, get credit etc. There are various benefits attached to incorporating a Limited Liability Singapore company. Some of these benefits are listed below:
English is the official business language and therefore all company reports are produced in English and all information is available in English; Common law is in place; Singapore is a world leader in foreign trade and investment and has one of the best business environments in the Asia Pacific region; Singapore is the best country in which to run a business according to a recent world bank study and it has been named as having the most open economy for international trade and investment and least corrupt economy in the world; Singapore has one of the most highly developed and well-regulated financial centres in the world which has been built on the highest regulatory and prudential standards; The Singaporean tax system is straightforward and stable; There are no restrictions for foreigners to be shareholders or Directors of a Singapore company; The incorporation process for a Singapore company is quick and efficient; No minimum requirements for share capital.
Only one Director and Shareholder is required to form a limited liability company; There is a concept of territorial taxation where foreign source trade profit is not subject to Singapore income tax if it is not repatriated in Singapore; There is no capital gains tax in Singapore; Foreign dividends are not subject to Singapore income tax; Tax credits for foreign tax paid are available in Singapore. However, they are is subject to some conditions; There are some partial income tax exemptions available in Singapore; There is no net worth tax in Singapore; Intensive double tax agreement system with more than 60 agreements signed and ratified with other countries.
Company administration guidelines
There are no specific requirements about minimum share capital; it may be as small as S$1.00. The concept of par value of shares was abolished in January 2006. Shareholder must subscribe at least for one share. Different types of shares could be issued by a Singapore company, namely ordinary shares, preference shares of different types, or treasury shares. Proper share transfer instruments are required to register the transfer of shares in a Singapore company and stamp duties should be paid before this registration. 0.2% of stamp duty is charged for buying or acquiring shares, also on mortgaging shares.
The minimum number of Shareholders required is one and there are no restrictions on foreign individuals or corporate bodies. The number of Shareholders of a private company is limited to 50.
The minimum number of Directors is one. Corporate Directors are not permitted in Singapore. There are no restrictions for foreign nationals to act as a Director of a Singapore company however at least one of the Directors must be a Singapore citizen or resident. Eltoma Corporate Services can provide this service. The sole shareholder could be appointed as Director if the Secretary is separate individual; by other words in a company always should be two officers at the same time.
Singapore local Director
When incorporating a Singapore Limited Liability Company, it is obligatory to have a local Singaporean Director. Eltoma Corporate Services can supply a local Director to fulfill this statutory requirement.
Restrictions on name & activity
All business entities in Singapore must have an approved name prior to company registration. This can be done relatively quickly, within 1-2 working days. The general rules are that the business name must not be too similar to any already in existence, must not infringe any trademarks or patents and must not be offensive in any way.
Government approval is generally not required for companies to do business in Singapore with the exemption of the following: banks and financial institutions, certain activities which require a license such as the operation of a restaurant or clinics etc.
The company must appoint a secretary who should be a natural person residing at Singapore.
The sole Director cannot be appointed as a Secretary.
The Secretary shall be present at registered office.
Every company in Singapore is required to have a registered office where the registers of Directors, Shareholders, Secretary and minutes of General and Director meetings are kept. All changes have to be filed with ACRA within 14 days or a month of the date of change. Eltoma Corporate Services can provide this service through our Singapore Office.
It is obligatory to have a Secretary. This must be a natural person who is a resident of Singapore. The company Secretary is responsible for keeping and filing corporate documents with ACRA. An annual general meeting of Directors of a Singapore company must be held within 15 months of the previous one and the audited/unaudited financial statement should be present on it for approval and further filing with Annual return. As a compliance matter the Annual Return and Tax return should be filed by all companies in the necessary time.
Details of the Directors, Shareholders, and company Secretary are placed on public record. It is permitted to use nominees to maintain confidentiality. The financial statements should be filed with Annual returns, but the Exempt Private companies may file only Director’s Declaration of solvency instead.
Documents Needed from Clients for Book Keeping
Applicable for all Jurisdictions for Newly Incorporated Companies:
Detailed description of the company’s activities; Bank Statements for the financial year for all accounts that are under the company’s name; Sales Invoices issued from the company during the financial year; Purchases Invoices received from the suppliers of the company during the financial year; Any expense receipts issued under the company’s name; Any agreements and contracts signed by the company during the financial year.
Documents needed from companies that were transferred from another agent:
Singapore Jurisdiction: All the documents that are mentioned above in Part A. A set of the submitted financial statements of the previous financial year that were submitted to ACRA; A copy of the Annual Return by ACRA – proves the submission of the accounts; A copy of the Notice of Assessment – C Form; A copy of the Notice of Assessment – ECI Form.
This guide highlights the annual filing requirements for all Singapore Exempt Private Company (EPC) and private limited company. This is applied to both active and inactive private limited companies. Conversion of financial accounts into XBRL format (cont’d). Most of the companies need to file their financial statements in the format of eXtensible Business Reporting Language (XBRL). This is a standard implemented by ACRA to present financial statements.
Filing of Estimated Chargeable Income (ECI)
All Singapore companies are required to declare annual revenue amount and Estimated Chargeable Income (ECI) by filing ECI form with Inland Revenue Authority of Singapore (IRAS) within 3 months of the financial year end for the company. Under administrative concession of IRAS, for companies with financial year ending October 2012 or after, ECI will not need to be filed if:
Annual revenue is not more than S$1 million for the financial year, and ECI is NIL.
Filing of annual tax return
All Singapore companies must file its annual return with IRAS by 30 November. Singapore adopts the preceding year basis for taxation. The profits for the financial year ending in the preceding year will form the basis for filing the tax return in the current year. The responsibilities and accountabilities for complying with the annual tax filing requirements are with the directors of a company. Failure to comply with the statutory compliance requirements is an offence and may result in fines or prosecution.
Opening a bank account in Singapore
A bank account in Singapore may be opened as soon as a company has been officially incorporated. The Process is as follows:
We receive your questionnaire with details required for the bank account opening process. Once we receive your payment, the process will begin immediately.
We submit your initial applications to the relevant banks and wait for an invitation to arrange a meeting with the signatory. We coordinate a meeting time based on your availability.
We conduct a briefing with you for the bank meeting to review any potential questions which may be asked of you by the bank.
We organise and accompany you to the meeting with the bank, where all documentation is signed and all matters are discussed. Within three weeks, the bank will make a final decision on the approval of the account. Once approved, all funds may be transferred immediately.
Dependent upon the time of the documents' submission, the entire process takes from3 to 8 weekson average, however every case may differ depending on the complexity. Share capital of the company shall start from SGD $5000 in order to be accepted by the bank in Singapore and according to the OECD regulatory framework on international transparency, it is advisable to have a simple and clear shareholding structure. Please be advised that Singapore banks may require additional documentation from both Business Owners and signatories.
Tax and accounting regulations
A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. We can assist by structuring the most tax efficient strategy to satisfy your requirements. We will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. We will provide tax planning advice that will identify which is the most favourable tax efficient jurisdiction in which to incorporate. All private limited companies must comply with the statutory regulations set out by ACRA (Accounting and Corporate Regulatory Authority) and the IRAS (Inland Revenue Authority of Singapore).
Corporation tax: The corporate income tax rate in Singapore is 17% for 2013 & 2014 respectively.
Income tax: Singapore operates a territorial taxation principle therefore income derived in Singapore is subject to tax. Sales proceeds originating from outside Singapore but received in Singapore are subject to tax. Prior approval must be obtained by the Singapore Inland Revenue Authority before profit can be classified as non-Singapore Income (i.e. not derived from Singapore) and therefore be exempt from Singapore Income Tax.
Taxation of investment holding companies in Singapore
There are two types of investment companies, namely, investment dealing companies and investment holding companies.
Investment dealing company
The main activity of the above company is to make investments to then subsequently see it. The proceeds from the sale of investments are assessed under s10(1)(a). The deductibility of the expenses is also alike other companies whereby s14 and s15 apply and capital allowances can be claimed by the company.
Investment holding company
The main activity of an investment holding company is the passive holding of long-term investments. The company earns passive income in the form of rentals, dividends and interest. The income derived is assessed under s10(1)(d) or (f). Any subsequent sale of these long-term investments is considered to be capital gains.
XBRL filing services
Shelf companies areready made companieswhose primary purpose is to bypass the lengthy registration or incorporation process that can be required when forming a business.
Certain jurisdictions may take from 3 business days up to 3 weeks for the whole incorporation process to be completed. Shelf companies can be up and running within 4 business days. In some cases banks, government projects and investors will not provide credit ratings, projects or be interested to invest in newly formed companies. This is where shelf companies offer invaluable creditworthiness as they are able to show company history.
What is XBRL?
XBRL stands for eXtensible Business Reporting Language, a language used in computers to present financial statements such that they can be retrieved from online records and transferred directly to users (for e.g. Auditors, Regulators & Financial Analysts) for various purposes. ACRA (Accounting & Corporate Regulatory Authority) implemented a new filing requirement for Singapore incorporated companies to file their financial statements in full XBRL format with effect from the 3rd of March 2014.
Applicable financial periods
The revised XBRL filing requirements are applicable for companies filing financial statements with periods ending on or after April 30th 2007. Companies filing financial statements relating to financial periods ending before April 30th 2007 will continue to file their financial statements in PDF format and their financial highlights in respect of the financial statements in their Annual Return.
Who is responsible for the correct representation and accuracy of information?
Directors of the companies will continue to be responsible for the correctness and accuracyof their financial statements in XBRL format filed with ACRA. Therefore Directors of the company have to check the information to be filed before authorising their company or authorised persons to submit the information on behalf of the company to ACRA.
Minimise your risk
Minimise your business’ risk of non-compliance with our XBRL filing service; our risk-based approach is highlighted to areas with the highest probability to receive attention from regulators. This not only reduces risks of having to submit amended filing as a result of any issues, it also keeps time spent to a minimum. We can provide explanations and feedback on any companies draft XBRL statements and assist with the internal processes & controls for continuing detail-tagging, enabling your management or compliance department to demonstrate to the audit committee and investors that the process is being conducted with precision and accuracy.
Singapore AML compliance
Singapore’s Anti Money Laundering/Counter Terrorist Financing coordination is a sophisticated system with a reasonable understanding of its Money Laundering risks and as a country has taken steps to mitigate them. Driven by the AML/CFT Steering Committee and the Inter-Agency Committee, the competent authorities ca be an extremely valuable tool in AML policy development for international companies. Singapore’s Financial Intelligence Unit, the Suspicious Transactions Reporting Office, uses well-functioning systems and coordination mechanisms to integrate FIU information into LEA processes. Singapore’s primary investigative agencies routinely make significant use of STRs at early stages of ML and predicate investigations.
For most Financial Institutions; Singapore’s AML/CFT supervision remains vigorous, with a variety of off-site factors examined and comprehensive on-site examinations/follow-up being conducted. Singapore has recently extended AML supervision to most types of Designated Non-Financial Businesses; however there remain differences in the supervision of AML requirements between relevant supervisory bodies. The country consistently provides constructive and high-quality information and assistance when requested for international cooperation. We have both knowledge and substantial number of years’ experience in the area of AML requirements. Our experience focuses on our international client base and ACRAs company guidelines. We can assist with the following services for fulfilling Singapore corporate compliance requirements:
Compliance checks at ACRA & MAS level: We can carry out an assessment of your Singapore Company’s current compliance provisions to identify any areas your company may be required to address to ensure compliance. A comprehensive report on the findings will be supplied, with an action plan.
Pre-acquisition Due Diligence & new license applications. Opening a subsidiary company is a big step for any business and the status of which may be the focus of MAS regulations that may affect your holding company’s good standing. Eltoma can assist by conducting a pre-acquisition compliance assessment and assist in obtaining the necessary permits in Singapore accordingly.
Drafting of risk mapping & risk management services: We can help to produce compliance and procedures manuals for data protection which are customized to your precise needs. We also provide training and competence schemes, compliance monitoring programmes, client letter templates, disclosure documents, business agreements and many other types of documentation you will need, in the form of risk mapping and risk management services.
New applications for MAS authorization: We can assist with the lengthy practice of applying for authorization by project managing your application. Our service ensures that the application is complete and accurate, in turn minimizing delays to the commencement of trading after being granted MAS authorization.
Continued compliance assistance: We provide ongoing assistance with compliance matters through any convenient method of communication, skype, email and telephone.
CDD, Politically Exposed Persons & Conflict of Interest resolution: We can help you to identify and satisfy any issues that may need to be addressed by creating an action plan and employing monitoring programmes.