Singapore is considered as one of the world's most prosperous countries, with strong international trading links (its port is one of the world's busiest in terms of tonnage handled) and with a per capita gross domestic product (GDP) comparable to or exceeding that of many nations in Western Europe.
A person who is carrying on business in Singapore will have to register its business with the Accounting and Corporate Regulatory Authority of Singapore (ACRA). A company is a separate legal entity with limited liability and has its own identity for tax and legal purposes. A private limited company is the most common vehicle used by foreign corporation for setting up business in Singapore.
There are other forms of vehicles for business in Singapore such as Sole Proprietorship, Partnership, Limited Partnership, Limited Liability Partnership, Foreign Branch but are not often preferred by foreign corporation due to taxation challenges or regulatory issues in Singapore & the country of residence.
Benefits of incorporation as Company
M2K Advisors provides business incorporation services in Singapore. Our services include:
As per Singapore Corporate laws, all companies must have at least one resident director in Singapore. In case your company does not have any local director, we can provide you with a Nominee Director on a long-term basis or a temporary one until you find a suitable local director to represent your company. We will transfer the directorship once you have appointed a new local director.
As per Singapore Companies Act, it is mandatory to appoint a Company Secretary within six months of incorporating the Singapore company. A company secretary acts an officer of your firm and will help fulfil a range of duties that ensures your company complies with the regulations stipulated by Inland Revenue Authority of Singapore (IRAS) and Accounting and Corporate Regulatory Authority of Singapore (ACRA).
A Company Secretary must be either a:
Singapore resident (a Singapore citizen or permanent resident) or
holder of Singapore Employment Pass/EntrePass/Dependant Pass.
He/ she must also have sound knowledge of the Companies Act.
M2K Advisors could help in acting as company secretary and undertake the necessary compliance to meet the said requirement. M2K could also assist the company in preparation of minutes of the meeting, filing of forms with ACRA, maintenance of records and registers etc.
Under the Singapore Companies Act,a registered office is an address in Singapore to which all communications and notices to the company can be sent. Also, the registered office must remain open and accessible to the public for not less than 3 hours during ordinary business hours on each business day.
Hence, while setting up a company, registered office address needs to be provided.Accordingly, you need to provide a local Singapore address as the registered address of the company. The registered address can be either a residential or commercial address, but not a P.O. Box.
We could provide our place of business as address to meet the aforesaid requirement. We could also receive documents on your behalf which are addressed to the registered office and send the scanned copy to you as and when received which would help you avoid having a full time staff just for receiving the documents.
Opening of a corporate bank account in Singapore could be a tedious process if the documentation requirement are not met appropriately. Following is an overview of the account opening procedure and a comparison of some of the major banks . This is purely a general guide and should not be considered as a professional advice. Readers are advised to directly check on the current policies and terms of service with the respective banks.
Documents needed to open a Corporate Bank Account in Singapore
Generally, the following documents are needed to open a corporate bank account in Singapore:
Further, opening of bank account would require physical presence of the signatory directors on the scheduled date. Prior to fixing the meeting with the banker, the bank account opening form must be filled correctly,and all supporting documents as mentioned above to be provided. During the meeting, the bank may ask for various queries/ clarification regarding the purpose of bank account, etc. which needs to be appropriately clarified.
M2K Advisors could assist the company in the bank account opening starting from preparing the necessary documents, fixing up meeting with the bank manager, addressing the queries raised by bankers and getting the bank account opened.
Most companies often do not need a full-time accountant. We provide accounting support customised to the needs of the client. We assist clients in:
Accounting of transactions relating to income, expenditure, bank payments, receipts, etc. in Tally or any other accounting software as may be provided by the Company
Assistance in establishing internal controls and enabling timely accounting and reporting to the relevant stakeholders.
Preparation of bank reconciliation and other monthly reconciliations (if any).
Preparation of budgets, monthly MIS (P&L), cash forecasts and provisional balance sheet in the pre-designed formats.
Any other accounting activities as may be required by the management.
All companies incorporated in Singapore are mandatorily required to prepare financial statements that comply with Accounting Standards (also commonly known as Financial Reporting Standards) under Section 201 of the Singapore Companies Act.This is regardless whether the company is required to get the accounts audited or exempted from audit under ‘small companies’category.
Financial statements are required to be presented in the Annual General Meeting (‘AGM’) and to be filed along with the annual return in XBRL.
Audit exemption for small companies
Usually audit is exempted for small companies which satisfies the following 2 out of 3 conditions:
Total revenue of not more than S$ 10million;
Total assets of not more than S$ 10miilion;
Number of employees not more than 50.
For a company which is part of a group, the company to qualify as a small company; the entire group must be a “small group” to qualify for the audit exemption. Therefore, the above limit must be looked at the Group level to determine the applicability of audit.
M2K Advisors could assist in preparation of financial statements on a timely basis and in line with the latest regulations. We offer a range of solutions for business with different levels of complexity and varying volumes of transactions.
Singapore incorporated companies are required to file their financial statements in XBRL format. XBRL stands for eXtensible Business Reporting Language, a language used in computers to present financial statements. XBRL enhances reliability and accuracy of financial reporting with improved transparency and timely dissemination of relevant financial information.
The company would be required to file their financial statements in XBRL format during the filing of Annual return, if it is:
a) insolvent (ie the value of Total Assets less Total Liabilities is Negative); or
b) has a corporate shareholder during the financial year
Singapore Companies are subject to corporate income tax on all income derived from sources in Singapore, and on income from sources outside Singapore if received in Singapore. Capital gains are not taxable in Singapore.
The standard corporate tax rate is 17%, subject to partial tax exemption and start-up tax exemption available for first 3 years. The start-up tax exemption is not available to property development and investment holding companies.
|Particulars||Cos having first FY end prior to 31 Dec 2018||Cos having first FY end after 31 Dec 2018|
|First 100,000 SGD||100%||75%|
|Subsequent 100,000 SGD||50%||50%|
|Subsequent 100,000 SGD||50%||Nil|
|Total exemption||SGD 200,000||SGD 125,000|
|Effective tax on income upto SGD 300,000||5.67%||9.92%|
|Particulars||Year of assessment 2018 to 2019||Year of assessment 2020 onwards|
|First 100,000 SGD||75%||75%|
|Subsequent 190,000 SGD||50%||50%|
|Subsequent 100,000 SGD||50%||Nil|
|Total exemption||SGD 152,000||SGD 102,500|
|Effective tax on income upto SGD 300,000||5.67%||9.92%|
In addition, there is a corporate tax rebate of 40% of the tax payable, capped at SGD 15,000 for year of assessment 2018 and 20% of the corporate tax payable, capped at SGD 10,000 for the year of assessment 2019.
Incentives: There are various tax incentives, exemptions and tax reductions available, depending on the investment level and specified activities performed in Singapore or industries identified as being beneficial to Singapore’s economic development. These incentives are generally subject to an approval process.
Repatriation of profits: There is no withholding tax on payment of dividends by a Singapore company or repatriation of profits by branches to its head office. Dividends paid by a Singaporean tax-resident company are exempt from income tax in the hands of shareholders, regardless of whether the dividends are paid out of taxed income or tax-free gains.
Taxable period: The tax basis period is the calendar year; however, for business profits, the accounting period will generally be adopted.
Tax returns & Estimated Chargeable Income (ECI): Tax is computed for each tax year based on the income earned in the preceding year (the tax basis period). The corporation files an estimate of its income (ECI) within three months of the end of the accounting period followed by a return of income by 30 November of the tax year, and the tax is assessed by the Comptroller of Income Tax.
Payment of tax: Assessed tax is payable within one month after the service of the notice of assessment, whether or not a notice of objection to the assessment has been lodged with the tax authorities. Application may be made to the Comptroller to pay estimated tax liabilities on a monthly instalment basis, who may approve on a case to case basis. Late payment of tax will attract penalties, upto a maximum of 17% of the outstanding tax.
Tax assessment/ audit: The IRAS undertakes tax audit on a risk-based approach, to identify the mistakes made in the tax returns, create an audit presence in the community to deter non-compliance by other taxpayers, educate taxpayers on their tax obligations and how to comply and identify areas of tax law, policies, and processes where the tax system can be simplified.
Time limit for assessment: The statute of limitation is four years from the year of assessment, however, the limitation does not apply where there has been fraud or wilful default by the taxpayer.
M2K Advisors can assist your company in preparation of ECI statement and file with the tax authorities who would then assess and confirm the tax liability and the due date for payment. We could also assist the company in representing before authorities requesting for instalment payment who would approve on a case to case basis.
M2K Advisors can also assist your company in preparation of return of income in accordance with the income tax law in Singapore.
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