2Introduction Geography Population Singapore’s strategic location at the southern tip of theMalaysian peninsula has ensured its importance, which is greater than its size might seems to justify.Singapore consists of Singapore island and 63 islets within its territorial water.The Central Business District spreads from the central and southern parts of Singapore.PopulationResident population of 3.58 million in June 2007, ofSingapore citizens and permanent residentsTotal population : 4.59 Million
3Introduction Political System Languages Currency Singapore is a republic with a parliamentary system ofgovernment, with a written constitution to provide for theorgans of the state, namely the executive, the legislatureand the judiciary.LanguagesOfficial languages are Malay, Chinese, Tamil and English.CurrencyThe monetary unit used in the Singapore dollar (S$) which is divided into 100 cents.
4Reasons for doing business in Singapore Strategic LocationAccess to unlimited marketsPro – business environmentNucleus for talentsEducated workforceOpportunities to innovate
5Different types of business entities Sole ProprietorshipPartnershipPrivate Limited CompaniesExempted Private CompaniesPublic CompaniesBranches of Foreign companies
6Sole Proprietorship An individual carrying on business on his own behalf.Simplest and most flexible business structure.It is not a separate legal entity.Sole proprietor is liable for the debts of the business.
7Partnership Defined under the Partnership Act(Cap.391) as a relationship that subsists betweenperson carrying on business in commonwith a view of profit.Minimum of 2 partners and maximum of 20partners
8Private Limited Companies A private company is one which has a smallgroup of no more than 50 shareholders.
9Exempted Private Companies This is a private companyHas not more than 20 shareholder and none of the shareholders is a corporation or that is wholly owned by the Government and which the Minister, in the national interest, declares by notification in the Gazette to be an exempt private company.
10Public Companies Public Company limited by shares A local incorporated company in which thenumber of shareholders can be more than 50.The company may raise capital by offering shares and debentures to the public.Must register a prospectus with the Monetary Authority of Singapore before making any public offer of shares and debentures.
11Branches of Foreign Companies Instead of incorporating a local company to conductbusiness, some foreign companies may choose to registerSingapore branch under the Companies Act(Cap.50).A Singapore branch of foreign company is part of the samelegal entity as the foreign company at its head office andbranches of the foreign company in other parts of theworld.
12Representative Office A temporary establishment for foreigncompanies to assess the businessenvironment in Singapore before makingbusiness decision.To undertake promotional and liaison activities on behalf of head office or overseas branches.May not be engage in any trading or business.Usually manufacturing, trade logistics and trade-related services sectors.
13Operational Headquarter Companies using Singapore as a base toconduct HQ management activities.Regional HeadquartersInternational HeadquartersOperational HeadquartersBusiness HeadquartersManufacturing Headquarters
14Register a Business ACRA Accounting and Corporate Regulatory Authority To register business entities and publicaccountant.To ensure compliance with legal requirements.To enforce and prosecute offenders.To provide information on registered entities.
15LIMITED LIABILITY PARTNERSHIP Any on person who wants to carry on business forthe purpose of gain (profit) must register abusiness, company or a limited liability partnershipin Singapore before carrying out such businessACRABUSINESSCOMPANYLIMITED LIABILITY PARTNERSHIP
16Register a Business For Local Sole Proprietor or Partnership Log into to submit an online transaction to apply for a new business.Engage the services of a professional firm (lawyers, accountants or chartered secretaries) or service bureau (DP Bureau) for assistance in submitting the online application to register a new business.Call at ACRA in person to submit the online transaction at the BizFile Kiosks.
17Register a Business For Foreigners Foreigner who wishes to engage in any business,profession, occupation or form of paid employmentin Singapore must apply for an Employment Pass.
18Register a BusinessA successful applicant will be issued with an Approval-In-Principle letter to enable him/her to register the businesswith ACRA.Upon receipt of the Certificate of Registration fromACRA, the applicant needs to send/fax a copy ofthe certificate and the Approval-In-Principle letterto the Employment Pass Department for theprocessing of his/her Employment Pass.
19Incorporating a local company Any person who wants to incorporate a local company may engage a professional firm or service bureau to assist him in the filing of the application for incorporation via Bizfile.A company can also be incorporated by the directors themselves. (For convenience, we call this process “self-incorporation”.) For self-incorporation cases, the proposed directors, secretary and subscribers must all be Singapore NRIC holders.
20Incorporating a local company Requirements:Any person above the age of 21 years can incorporate a local company. A company may have only one director who must be “ordinarily resident in Singapore” i.e. a Singaporean Citizen, a Singaporean Permanent Resident, a person who has been issued an EntrePass/Approval-In-Principle letter or a Dependant Pass.A foreigner who wishes to act as a local director of a company can apply for an EntrePass or Approval-In-Principle letter from the Work Pass Division of the Ministry of Manpower (MOM) under the EntrePass Scheme.
21Register a Foreign Company Any person who wishes to register a branch of a foreign company is advised to engage a professional, e.g. a lawyer or an accountant to assist him in the preparation and filing of the application for registration via Bizfile.
22Register a Foreign Company The Companies Act requires a foreign company to appoint two local agents in Singapore to act on behalf of the company. The agents must be ordinarily resident in Singapore i.e. a Singaporean Citizen, a Singaporean Permanent Resident, or a person who has been issued an EntrePass/Approval-In-Principleletter/Dependant Pass. A foreigner who wishes to act as a local agent of a foreign company can apply for an EntrePass or Approval-In-Principle letter from the Work Pass Division of the Ministry of Manpower (MOM).
23Approvals, Licenses and Permits Certain business in Singapore are subjected tofurther regulatory control by other governmentagencies in Singapore.Certain licenses and approvals need to be obtainbefore the relevant business activities can commence.Finance CompaniesInsurance CompaniesTravel AgentsPrivate SchoolsMore information,
24Audit and Accounting Requirements All businesses are required to maintain a properbooks of account for audit and taxation purposes.For Companies, directors are required under theCompanies Act to appoint a firm of auditors within3 months of incorporation.For Representative Offices, partnerships, soleproprietorships, LLPs, there are no requirementsto have accounts audited.
25Promoting Foreign Investment Economic Development BoardThe leading agency responsible for planning andexecuting strategies to sustain Singapore’sattractiveness as a global hub for business andinvestment. Work closely with other agencies topromote innovation and develop humans, intellectual,financial and cultural capital in Singapore.I
26Promoting Foreign Investment International Enterprise SingaporePromotes Singapore as a hub for Small andMedium-sized companies by attracting enterprises fromother countries to be based in Singapore, so that theycan collaborate with international Singapore companiesto venture into the region.
27Promoting Foreign Investment Jurong Town CorporationLeading provider of industrial spare solutions andspecialized parks for various industries.Monetary Authority of SingaporeRegulates all elements of monetary, banking andfinancial aspects of Singapore and oversees awide range of tax incentives specifically forfinancial sector.
28Taxation Taxes are used to develop Singapore into a stronger community, a better environment anda more vibrant economy.Main objectives of tax policyRevenue RisingA substantial source of funding for government operations.Promotion of Economic & Social GoalsInfluence behavior towards desirable social and economic goals. To encourage mechanization and automation, the government allows accelerated capital allowance for most assets used for business purposes.
29Corporate Tax Taxed based on Income accruing in or derived from SingaporeIncome received in Singapore from outsideSingaporeAssessed PeriodOn a preceding year basis, generally refers to the financial year ending in the year preceding the YAExample: Company A accounts are prepared up to 31 December each. The basis period for each YA is the preceding calendar year ended 31 December. Thus a company’s basis period for YA is from 1 January 2007 to 31 December 2007
30Tax rates and tax exemption for 2008 Corporate TaxA company is taxed on a flat rate on its chargeableincome regardless of whether it is a local or foreigncompany.Tax rates and tax exemption for 2008Tax RateTax exemption18%Effective 2008, partial tax exemption is given to companies on a normal chargeable income (excl. Singapore franked dividends) of up to $300,000 as followsExempted amountFirst 75%Next 50%
31Corporate Tax Tax exemption scheme for new start-up companies was introduced in YA 2005 to supportentrepreneurship and to help our local enterprisesgrow.Tax exemption for new start-up companies on chargeable income up to $300,000Exempt amountFirst $100,000@100%= $100,000Next $200,000@50%=$100,000Total $300,000$200,000
32Partnership Partnership does not pay income tax on the income earned by the partnership. Each partner will betaxed on his share of the income from the partnership.If the partner is an individual, his share of income fromthe partnership will be taxed based on his personalincome tax.If the partner is a company, its share of income will betaxed based on the tax rate for the companies
33Limited Liability Partnership (LLP) LLP will not be chargeable to tax at the entitylevel instead, each partner will be taxed on hisshare of income from LLP.If the partner is an individual, his share of income from LLP will be taxed based on his personal income taxes.If the partner is a company, its share of income from the LLP will be taxed based on the tax rate for companies.
34Tax Treaties An avoidance of Double Taxation Agreement between Singapore and another country serves toprevent double taxation of income earned in onecountry by a resident of another country.Makes clear the taxing rights between Singapore and her treaty partner on different types of incomes arising from cross-border economic activities between the two countries.Provides for reduction or exemption of tax on certain types of incomes.
35Tax Treaties Comprehensive Avoidance of Double Taxation Agreements generally cover all types of income.Limited treaties cover only income from shippingand/or air transport.Treaties which are signed but not ratified areeither comprehensive agreements or limitedtreaties which are not ratified and therefore do nothave force of law.Refer to appendix 1 for countries that Singapore has tax treaties with
36IndividualAll individual who earned an income in Singapore are subjected to taxation and need to declare all sources of income.The amount of income tax need to pay depends on how much is being earned and whether the individual is a tax resident or non resident.Tax Resident – Singaporeans, Singapore Permanent Resident or who stayed or worked in Singapore for more than 183 days or more in the year preceding the YA.
37IndividualNon – Resident – Foreigner who stayed or worked in Singapore for less than 183 days in the previous year or who is the director of a company.Non – Resident, employment income is taxed at 15% or the resident rate, whichever gives rise to a higher tax amount. Director fees, consultant fees and all other income are taxed at 20%.
38Other sources of taxable Incomes Taxable Other IncomesRent and Net Annual Value from propertyRent received from letting of a property in Singapore.Example : Rental income includes rent of premises, maintenance, furniture and fittingsGross rent - Total allowance expenses = Net Taxable RentRoyalty is the income received from the right to use.Example : Copyrights, patents, trademarks and etc.Withdrawal from Supplementary Retirement Scheme is taxable and the amount being taxed will depend on the time of withdrawal.
39Other sources of taxable Incomes Taxable Other IncomesCharge refers to income received under a deed or court order in SingaporeExample : Alimony/maintenance paymentsIncome from separation deed or orderDividends are distribution by a company to its shareholdersExample : Returns on shareholder’s capital that maybe pay in cash or company’s sharesEmployment income are gains or profit earned from employmentExample : Salary, bonus, director fees, commission and other employment income, gains from exercise of stock options and retirement or retrenchment benefitsEstate/ Trust Income received in Singapore from an estate under administrative or a trustIncome received from outside Singapore is taxableExample :If it is received in Singapore through partnerships in Singapore.Overseas employment is incidental to Singapore employment, as part of work in Singapore, there is a need to travel overseasEmployed outside Singapore on behalf of Singapore Government
40Other Taxes Goods and Services Tax (GST) A consumption tax levied on the import of goodsand nearly all supplies of goods and services inSingapore.Business must register for GST when their turnover exceeds $1mil per year and after the registration, must charge and account for the GST at prevailing rate. This is known as output tax.The business can also claim the GST incurred on theirgoods and services purchased if conditions are met. This is known as input tax.
41Other TaxesStamp DutyIt is a tax on documents relating to properties andshares and payable only on documents describedin the First Schedule to the Stamp Duties Act (Cap312). Once the document is signed, the stamp duty mustbe paid 14 days from the date of execution if document issigned in Singapore and 30 days of its receipt in Singaporeif the document is signed overseas.
42Other Taxes Estate Duty It is a tax on the total market value of a person’sassets (cash and non-cash) at the date of hisdeath. Common assets subjected to estate dutyImmovable PropertyMarket value of the immovable property in Singapore as at the date of death iExample : Joint Tenancy, tenancy in common or in the deceased’s sole name.Bank AccountsBalances as at the date of death in the bank accounts are subjected to estate dutyExample : in deceased name or in joint name or by other persons in trust for the deceasedPublic listed sharesMarket values of the shares as at the date of the deathItems in Safe Deposit BoxMarket value of the contents in the Safe Deposit Box as at date of death
43Other Taxes Estate / Trust Income The assets left behind by a deceased may continue toproduce income after his death.Rental income from propertyDividends from shares declared after deathInterest income from bank/finance companyShare of profit from a partnership OR profit from a sole-proprietorship
44Who can buy property in Singapore? Buying HDB flat in SingaporeCitizenshipMust be a Singapore Citizen. The family nucleus must comprise at least another Singapore Citizen or Singapore Permanent Resident.AgeMust be at least 21 years old at the time of application.Family NucleusMust form a proper family nucleus under one of the following schemes:
45Who can buy property in Singapore? Family NucleusPublic You, the applicant and;- your spouse, and children (if any)- your parents, and siblings (if any)- your children under your legal custody(for widowed/ divorced)Fiance/FianceeOrphan
46Who can buy property in Singapore? Household StatusFirst-Timer ApplicantsYou and the essential family members listed in theapplication for purchase of the flat must not:be the owners of a flat bought direct from HDB, a DBSS flat or an Executive Condominium bought from the developerhave sold a flat bought direct from HDB, a DBSS flat or an Executive Condominium bought from the developerhave received the CPF Housing Grant for the purchase of an HDB resale flat;have enjoyed other forms of housing subsidy (for example, enjoyed benefits under the Selective En bloc Redevelopment Scheme, privatisation of HUDC estate etc).
47Who can buy property in Singapore? Second-Timer applicantsYou or the essential family members listed in your applicationhave owned/sold or are currently owners ofany HDB flat that was bought from HDBany resale flat that was bought under the CPF Housing Grant Scheme; or any apartment under Design, Build and Sell Scheme or Executive Condominum from the developerhave enjoyed other forms of housing subsidy (for example, enjoyed benefits under the Selective En bloc Redevelopment Scheme, privatisation of HUDC estate etc).
48Who can buy property in Singapore? Income CeilingBuying a 3-room Premium, 4-room or bigger flatYour gross monthly household income must not be more than $8,000.If you are buying a flat with your extended family, your gross monthly household income must not be more than $12,000.Buying a 3-roomYour gross monthly household income must not be more than $3,000.Buying a 2-roomYour gross monthly household income must not be more than $2,000.
49Who can buy property in Singapore? Ownership / Interest in PropertyYou, your spouse, any occupiers listed in the ApplicationForm or their spouses must not own or dispose any other flat, house, building or land* or have an estate or interest at any time within 30 months before the date of application, or between the date of the application and the date of taking possession of the new flat.
50Who can buy property in Singapore? Stamp Duty / FeeStamp duty is a government tax payable by a buyer whobuys a property in Singapore.Stamp duty payable is calculated on a scale :1% on the first $180,0002% on the next $180,000 and3% thereafterCPF savings may be used to pay the stamp duty.
51Listing of local and foreign banks in Sinagapore Appendic 2 Banking in SingaporeSingapore is a leading financial centre in theAsia Pacific region with more than 800financial institutes offering a wide range ofproducts and services.Listing of local and foreign banks in Sinagapore Appendic 2
52Banking in SingaporeCommercial banks in Singapore are licensed under andgoverned by the Banking Act.Besides commercial banking, the banks may carry on anyother business which is regulated or authorized by MAS,including financial advisory services, insurance broking andcapital market services.
53Banking in Singapore FULL BANKS OFFSHORE BANKS MERCHANT BANKS WHOLESALE BANKSFINANCE COMPANIES
54Banking in Singapore Full banks May provide the whole range of banking businessapproved under the Banking Act.There are currently 29 fullbanks in Singapore. Five of them are locally- incorporatedentities under the three local banking groups, and one is alocally incorporated subsidiary of a foreign bank.Theremaining 23 banks are branches of foreign-incorporatedbanks. Six of the foreign banks operating in Singaporehave been awarded Qualifying Full Bank (QFB) privileges.
55Banking in Singapore Full Banks Foreign full banks with QFB privileges may operate a totalof 25 locations. They may also share ATMs amongthemselves, and relocate their sub-branches freely. QFBare allowed to negotiate with the local banks on acommercial basis to let their credit card holders obtain cashadvances through the local bank's ATM networks.
56Banking in Singapore Full Banks QFBs may provide debit services through an EFTPOSnetwork, offer Supplementary Retirement Scheme andCPF Investment Scheme accounts, and accept fixeddeposits under the CPF Investment Scheme andMinimum Sum Scheme.
57Banking in Singapore Offshore banks Engage in the same activities as full and wholesale banksfor businesses transacted through their Asian CurrencyUnits (ACUs). The ACU is an accounting unit, which thebanks use to book all their foreign currency transactionsconducted in the Asian Dollar Market (ADM). The banks'Singapore dollar transactions are separately booked in theDomestic Banking Unit(DBU).
58Banking in Singapore Offshore Banks The scope of business transacted in offshorebanks' DBU has slightly more restrictions ondealings with residents as compared withwholesale banks. Offshore banks operate withinthe Guidelines for Offshore Banks issued byMAS. Under the banking liberalisation programme,offshore banks were given greater flexibilityin Singapore dollar wholesale
59Banking in Singapore Offshore Banks Offshore banks had their Singapore dollar lending limitraised to S$500 million. They are now allowed to engage inSingapore dollar swaps in respect of proceeds arising fromthe issue of Singapore dollar bonds managed or arrangedby them.All offshore banks in Singapore, operate asbranches of foreign banks.
60Banking in Singapore Merchants Banks The typical activities of merchant banks include corporatefinance, underwriting of share and bond issues, mergersand acquisitions,portfolio investment management,Management consultancy and other fee-based activities.Most merchant banks have, with MAS' approval,established ACUs , through which they compete withcommercial banks in the Asian Dollar Market.
61Banking in Singapore Merchants Banks In their DBU, merchant banks may not accept sight ordeposits or borrow from the public. However they mayaccept deposits or borrow from banks, finance companies,shareholders and companies controlled by theirshareholders.
62Banking in Singapore Finance Companies Finance companies focus on providing small-scalefinancing, including instalment credit for motor vehicles andconsumer durables, and mortgage loans for housing.Finance companies may not offer deposit accounts whichis repayable on demand by cheque, draft or order. Theyare licensed under and governed by the FinanceCompanies Act.
63Banking in Singapore Wholesale Banks Wholesale banks may engage in the same range ofbanking business as full banks, except that they do notcarry out Singapore Dollar retail banking activities. Theyoperate within the Guidelines for Operations of WholesaleBanks issued by MAS.All wholesale banks in Singapore, operate as branches offoreign banks.
64Banking in SingaporeQ : Do the individual need to be present for account opening procedures?A: The specific requirements for opening a bank account vary from bank to bank. Most banks require that the bank signatories be personally present for the account opening witness by the bank staff.For foreigners who are unable to attend, the sighting canbe arrange if the bank has branch in the overseas countries.
65Banking in Singapore Q : How long does it take to open a bank account? A : Bank Accounts are open immediately upon signing of bank papers and transferring of funds. Some bank services such as internet banking may take some time for activation
66Banking in SingaporeQ : Can an individual open a multi-currency account?A : Yes, bank allows clients to open multi-currency accounts.Q : Can the funds be move freely between home country and Singapore?A : Singapore has no currency / funds transfer restriction to any where in the world. Funds can move in and out freely.
67Foreign Missions Accredited to Singapore There are 63 resident foreign Embassies andHigh Commissions, 41 foreign Consular postsand 10 international Organizations inSingapore.
68Employment regulations A foreigner who wishes to take up employmentor engage in business in Singapore must obtainan employment or entrepreneur pass.
69Employment regulations Requirements for Employment Pass andDependent’s PassRecognized educational or technical qualification and earn a monthly salary of SGD2500.Entrepreneur will need to submit business plan together with application.An employment pass holder can apply dependent pass forhis/her spouse or children below 21 years of age to enablethem to stay with him/her in Singapore
70Employment regulations Terms and conditions for employees earning up to SGD1600 a month are subject to the Employment Act.Other statutes dealing with workforce matters are the Industrial Relations Act, Trade Dispute Act and Workmen Compensation Act.
71Employment regulations A contract of service must be sign by employer and employee and would include (i) salary and working hours(ii) leave entitlement (iii) sick leave entitlement (iiii) notice period for termination of employment (v) details of contribution to CPF.Trade Union, registered under the Trade Union Act which regulates the rights and liabilities and proper use of funds. Purpose is to promote a harmonious labour relations and strike free environment.