FAQs

Central Provident Fund FAQs

Can I use CPF for Education Scheme?

Yes.  The Education Scheme is a loan scheme that allows you to use your CPF savings for full-time tertiary education in Singapore for those who are Singapore citizens or Permanent Residents.

Can I nominate a beneficiary of my CPF savings upon my death?

Your CPF nomination allows you to specify who to receive your CPF savings, and how much each nominee should receive, when you are no longer around.

You do not need to make a CPF nomination if you wish to distribute your CPF savings under the intestacy laws. Distribution under the intestacy laws ensures that your family members will receive your CPF savings.

If your nominee is below the age of 18 years old at the time your CPF savings are paid out, his/her share will be forwarded to the Public Trustee for administration until he/she reaches 18 years of age.

Can I use my CPF for Health Care?

Your monthly contributions to your Medisave Account help you build up savings for your healthcare needs. Medisave can be used to pay for your own or your dependant(s)’ hospitalization expenses as well. In addition, it can also be used for certain outpatient treatments like chemotherapy and radiotherapy treatments.

You can also use your Medisave savings to pay the premiums for MediShield or private medical insurance plans under the Private Medical Insurance Scheme (PMIS).

Can I use CPF For Owning A Property?

Your Ordinary Account savings can be used to buy a home under the CPF housing schemes. You can buy an HDB flat under the Public Housing Scheme, or a private property under the Residential Properties Scheme. Your CPF savings can be used for full or part payment of the property, and to service the monthly housing payments. If you buy a flat under the Public Housing Scheme, you will need to be insured under the Home Protection Scheme.

From 1 July 2006, the Board no longer approves application under the Non-Residential Properties Scheme (NRPS). If you are currently using CPF to service your non-residential properties, you will not be affected by the policy change.

Can I make Voluntary CPF Contributions?

Yes, you can make voluntary contributions to build up your retirement savings. These contributions can also be used for your housing and health care needs.

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Company Directors and Shareholders FAQs

What is the role of a director?

A director is an officer of the company. All directors must carry out their duties and responsibilities in accordance with the law and the objectives of the business.

Tax on dividends

“What are dividends and do Shareholders have to pay any tax on dividends in Singapore?”

During the year, a company’s board decides whether the business has done well enough to pay the shareholders an interim dividend and at the end of the financial year, the shareholders can pay themselves a final dividend. Dividends can be paid from the company’s profits or reserves. Dividends are paid according to the number of shares held by the shareholders, so the more shares you own, the more money you get. Singapore practices one tier tax system which means shareholders are not taxed on the dividends they receive from Singapore companies.

Who is not allowed to be a director?

The following persons are prohibited from acting as directors:

  • A person who has been convicted for fraud or dishonesty punishable on conviction with imprisonment for 3 months
  • An undischarged bankrupt
  • A person who is disqualified by the High Court of Singapore

Are shareholders liable for companies’ debts?

A shareholder is not liable for the debts or other obligations of the company except to the extent of any commitment made to buy shares. The benefits of owning shares include a right to participate in profits (through dividends) and the right to share the residue of assets of the company, once liabilities have been paid off, if it is ever dissolved.

What are Company directors’ responsibilities?

The directors duties, responsibilities and liabilities specified in the Act as well as under the common law where applicable, include the following key administrative and substantive duties, that is, to:

  • discharge their responsibilities in the company;
  • ensure that they have a reasonable degree of skill and knowledge to handle the affairs of the company;
  • act honestly and be reasonably diligent in discharging their duties and act in the interest of the company without putting themselves in a position of conflict of interest.
  • employ the powers and assets that they are entrusted with for the proper purposes of the company and not for any collateral purpose;
  • to comply with all the requirements and obligations under the Act including those in respect of meetings, requisitions, resolutions, accounts, reports, statements, records and other documents on the company, filing and notices and any other prerequisites; and
  • account to the shareholders for their conduct of affairs of the company and make such disclosures that are incumbent upon them under the Act.
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Company Incorporation FAQs

What is paid up Capital?

Paid-up capital is essentially the portion of share that the company has issued and received payment for in full.

A Singapore company can be registered with a minimum paid up capital of S$1 (Or its equivalent in any currency).

Issued Share Capital funds

Upon incorporation, the issued share capital must be paid up immediately into the corporate bank accounts.

In the unfortunate event that the company goes under, the creditor can inspect the company’s accounts and lay their claim for the balance paid up, if it has not been utilized.

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Company Statutory Compliance FAQs

Role of Asiabiz as Company Secretary

What will AsiaBiz company secretary role be in my company should I appoint your firm? What is included in the annual fee for your Company Secretary Service?

Our annual fee for acting as the company secretary includes the following:

  • Providing one qualified person as Secretary of your company including named Company Secretary in ACRA Records for 12 months
  • Preparation of forms to be filed with the ACRA
  • Maintaining the statutory books and preparation of all relevant minutes for directors and shareholders meetings
  • Share transfer forms and any other documentation normally required in the field of Company Secretarial work.
  • ACRA and IRAS various statutory Compliance Alert & Reminders via Email.

*Non-routine corporate secretarial services are charged on a time-cost basis. ACRA – Accounting & Corporate Regulatory & Authority

What is Directors Disclosure?

A Director shall disclose to the company:

  • any material personal interest they have in a matter which relates to the affairs of the company; and
  • any other interest which the Director believes is appropriate to disclose in order to avoid an actual conflict of interest

What kind of secretarial services will be chargeable?

Secretarial matters of non-routine nature will be chargeable on a per request basis and all out of pockets expenses. Examples include:

  • Increase of paid-up capital
  • Change of shareholding
  • Change of M&A
  • Change of directors
  • Opening of additional bank accounts
  • Change of registered address
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Corporate Services FAQs

What kind of secretarial services will be chargeable?

Secretarial matters of non-routine nature will be chargeable on a per request basis and all out of pockets expenses. Examples include:

  • Increase of paid-up capital
  • Change of shareholding
  • Change of M&A
  • Change of directors
  • Opening of additional bank accounts
  • Change of registered address

What are your terms for providing a nominee director service?

As per Singapore company laws, the responsibilities of a company director are quite onerous and therefore we have certain conditions that must be fulfilled in order for us to provide a nominee director service. Specifically,

  • We would need to be satisfied with the credibility of company beneficiaries and may require additional information on a case-by-case basis.  We are required to conduct our own due diligence process known as KYC (or “know your client”).
  • We require you to sign a nominee director indemnity letter.
  • In addition to our nominee director professional service fee, we require a refundable security deposit for the provision of this service.

What are company secretary responsibilities?

The company secretary is usually responsible for establishing and maintaining the company’s records. Monitoring and ensuring compliance with relevant legal requirements, particularly under the Companies Act are adhered on a timely basis.

  • any changes in the director(s) of a company or particulars relating to director(s)
  • changes to a directors name or residential address
  • removal from office in accordance with the Act or constitution
  • appointments/resignations/deaths
  • annual return
  • change of company name
  • adoption, alteration and revocation of constitution
  • issue of shares
  • any other changes that requires updating with ACRA

Is the service fee and security deposit the same?

A security deposit should not be confused with our Service Fee or some other fee. It’s your money that is temporarily in our custody for the duration of our nominee director service. We will refund the security deposit back to you immediately upon termination of our nominee director service.

Must a Singapore company appoint a company secretary?

Singapore Companies Act Section 171 of the Companies Act requires a company to appoint a Singapore resident company secretary. All Singapore Companies must appoint a Company Secretary to handle on-going statutory compliance matters. AsiaBiz will act as the named Company Secretary for your Company to comply with the Companies Act.

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Corporate Tax FAQs

Are there any Tax Incentives for foreign companies to set up in Singapore?

To encourage foreign capital inflow into Singapore, there are tax incentives provided to various industries namely in the form of reduced corporate tax rates.

Finance & Treasury Centre Co. 10%
Fund Manager 10%/exempt
Headquarters Co. 10%
International Commodity Trader 10%
Offshore Leasing 10%
Oil Trader 10%
Securities Company 10%/exempt
Trustee Company 10%
Arts & Antique Dealers 10%
Asian Currency Unit 10%/exempt
Insurance & Re-insurance Co. 10%/exempt
Members of Commodity Futures Exchange 10%
Pioneer/Incentive Co. exempt/various
Financial Sector Incentive Co. 5%/10%
Cyber Trader 10%
Commodity Derivatives Trader (New) 5%

 

Tax Rates for Companies

“What is the tax rates for companies for Year of Assessment 2013 and for those who do not qualify for the New Start up exemption rates?”

Singapore corporate tax rate is 17%. When taking into account the rebates and tax exemptions available to resident companies, Singapore has one of the lowest effective corporate tax rates in the world.

Companies that are not eligible for full exemption may still qualify for partial tax exemption, as follows:

Taxable Income Effective Tax Rates
$100K 5.65%
$300K 5.80%
$500K 8.27%
$1M 11.41%
$5M 15.88%
$10M 16+%

Are there any conditions to qualify to these exemptions?

Note: *A qualifying new company must fulfill the following conditions:

  • It is incorporated in Singapore;
  • It is a tax resident of Singapore for that Year of Assessment;
  • It has no more than 20 shareholders throughout the basis period relating to that Year of Assessment;
  • All its shareholders are individuals throughout the basis period relating to that Year of Assessment OR start-up companies with corporate shareholders can qualify for the existing Start-Up Tax Exemption Scheme, provided that there is at least one individual shareholder of minimum 10% shareholding.

*A company is resident in Singapore if the control and management of its business is exercised in Singapore.

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Permanent Residence FAQs

Am I eligible to apply for Singapore PR?

The following people are eligible to apply for Permanent Resident in Singapore:

  • Spouse or unmarried children (below 21 years old) of a Singapore Citizen/Permanent Resident
  • Aged parents of a Singapore Citizen,
  • Employment Pass (P or Q Pass) Holders
  • Investors/Entrepreneurs and exceptional artists

Feel free to consult our experts for your eligibility of Singapore PR by filing up the contact form.

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GST FAQs

Do I have to register for GST?

In most cases, registering for GST is compulsory when:

  • the turnover of your business is more than $1 million for the past 12 months; or
  • you are currently making sales and you can reasonably expect the turnover of your business to be more than $1 million for the next 12 months.

Otherwise, you can choose to be voluntarily registered for GST. Companies with annual revenue of below S$1million, GST registration is optional.

You may apply for voluntary GST registration even though you are currently not liable for compulsory registration.

Does Singapore have any value added tax or general sales tax?

Yes.  The sales tax in Singapore is called Goods and Services Tax (GST).  The current GST rate is 7%.  Only GST-registered businesses are allowed to levy the GST on their sales or invoices.

What is Taxable Supply?

A Taxable Supply is a supply of goods and services made in Singapore other than an exempt supply. GST is chargeable on a taxable supply of goods and services made by a taxable person in the course or furtherance of his business. However, any GST incurred by a taxable person on business purchases used in making taxable supplies can be recovered from the Comptroller of GST.

What is an Exempt Supply?

There are 2 broad categories of exempt supply. They include the sale and lease of residential properties and financial services specified in paragraph 1 of the Fourth Schedule to the GST Act. GST will not be charged on the exempt supply. Generally, any GST incurred in making exempt supplies cannot be claimed as input tax.

What is needed to register for Goods and Services Tax?

GST is a self-assessed tax. This means that businesses are required to continually assess the need to register for GST. Registering for GST is compulsory when the turnover of your business is more than S$1 million for the past 12 months or is expected to be more than S$1 million in the next 12 months.

Once a person is liable to register, he should inform the Comptroller of GST within 30 days from the day the liabilities arises. If the total turnover of your company is more than S$1 million in any past 12 months and you have not informed the Comptroller of your liability, you should do so immediately.

If the Turnover of the company for the past 12 months is less than S$1 million, no action is required from you.

The only exception is if you are certain that your combined turnover for the next 12 months will be not more than S$1 million.

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Personal Tax FAQs

What are the personal taxes I will have to pay based on my declared salary?

Singapore Personal income tax rates follow a progressive pattern where the rate ranges from 0%-20%. The maximum tax rate, for income above $320,000, has been reduced over time and has reached the present rate of 20%.

For a more information, please read [intlink id=”241″ type=”page”]Singapore Personal Income Tax[/intlink].

Do I need to pay tax in Singapore as a visiting professional?

“My engagement in Singapore as a visiting professional spreads over 5 months. My home country has a tax treaty with Singapore. Do I still need to pay tax in Singapore?”

Whether you need to pay tax in Singapore would depend on the provisions of the tax treaty. For example, under the tax treaty between Singapore and United Kingdom, the income derived by you from Singapore will be tax exempt provided that you do not have a fixed base regularly available to you in Singapore for the purpose of performing your activities; or that you are not present in Singapore for not more than 183 days in any period of 12 months commencing or ending in the fiscal year concerned.

Taxation of Overseas Income for Services Rendered in Singapore

“I am engaged by a foreign consulting firm to render my services in Singapore. Will my consultation fees be taxed in Singapore if the fees are paid to me outside Singapore?”

Yes. You are liable to pay Singapore tax for the professional services rendered in Singapore. It does not matter where you are paid.

Tax exemption for visiting professionals

“I am a visiting professional. Will I be exempt from tax if I render my services for not more than 60 days in the calendar year in Singapore?”

The tax exemption for short-term employment of 60 days or less does not apply to visiting non-resident professionals who exercise their profession in Singapore. Only visiting non-resident professionals who are employees would qualify for the exemption.

Is income taxable as a visiting lecturer or speaker?

“I am invited by a government body/Ministry in Singapore to conduct seminars/workshops in Singapore. Is my income taxable?”

You will be taxed on the income derived from Singapore unless it is exempted from tax.

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Trademark Registration FAQs

How long does the trademark application process take?

If your trademark application is in order, and there are no objections from the registrar, it will take approximately 4 to 6 months for the registration to be processed.

What is a trademark?

A trademark is a sign or symbol used by a person in the course of business to identify his particular goods or services as distinct form that other traders.

It must be represented graphically in the form of a letter, word, name, signature, numeral, device brand, label, ticket, shape, color packaging or a combination of all as stated.

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Work Visa FAQs

Employment Pass holders contributions to social security funds

Do Singapore Employment pass holders need to contribute to any social security or skill development fund etc?

Employment pass holders do not have to contribute to any social Security, i.e. Central provident fund (commonly know as “CPF” which is only applicable to Singaporeans and permanent residence). However, the employer (company) is required to contribute a fee to the skill development fund. SDL contribution is payable by employers for all employees up to the first $4,500 of gross monthly remuneration** at the rate of 0.25% or $2, whichever is higher.

What are the various types of categories of Employment Passes issued?

 

Employment Pass Eligibility Summary Table

Pass Type Factor One Factor Two Factor Three
P1 Fixed monthly salary
> S$8,000
Professional, Managerial, Executive, Specialist jobs
P2 Fixed monthly salary
> S$4,500
Professional, Managerial, Executive, Specialist jobs Recognised qualifications
Q1 Fixed monthly salary
> S$3,600
Recognised qualifications In lieu of recognised qualifications, we may also consider compensatory factors such as skills and years of experience (we recommend a minimum of 5 years relevant work experience)

What is the base salary range must I declare to secure an Employment pass?

Depending upon your salary, education and experience declared, you will be issued with one of the following types of Passes:

  • P1 Pass: for applicants with a base salary of above S$8,000 a month.
  • P2 Pass: for applicants with a base salary between S$4,500 and S$8,000 a month.
  • Q1 Pass: for applicants with a base salary between S$3,600 and S$4,500 a month.

The final decision of which type of passes will be issued is at the discretion of MOM.

What are the employment pass eligibility requirements?

To be considered for an Employment Pass, you must have a fixed monthly salary of at least S$3,600 (effective 1 January 2017) and possess one or more of the following:

  • Generally, a recognized Diploma/Degree qualification from a reputable university
  • Professional qualifications
  • Specialist skills
  • Work related experience

Possessing a recognised qualification does not automatically guarantee a successful Employment Pass application, as the applicant may need to satisfy other criteria, such as relevant work experience or professional skills.

The Ministry of Manpower evaluates each applicant based on individual’s and company merits.

Other factors which also play a contributory role are:

  • Salary of applicant
  • Age of applicant
  • Roles & responsibility
  • Repute of the company
  • Company paid up capital
  • Applicant current citizenship

What are my chances of obtaining an employment pass?

The reality is that not all EP work visa applications are approved. The Ministry of Manpower evaluates each applicant based on the individual’s and company credentials.

Factors which play a very important role are:

  • Applicant age, salary, citizenship, education, professional experience and skills
  • Roles & responsibility of applicant
  • Repute of the company and paid up capital
  • Availability of local staff and economic viability of the company to Singapore

If the initial application is rejected, we will explore the rejection reasons with MOM and if appropriate, file an appeal by addressing the issues raised by authorities. If the additional details submitted are satisfactory to MOM, your employment pass application will likely be approved. Please note that MOM will take a minimum of three weeks or more to review appeal application.

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