Central Provident Fund FAQs (9)
The Central Provident Fund commonly abbreviated by Singaporeans and referred to as CPF, is a compulsory comprehensive social security saving plan. It aims to provide working Singaporeans with a sense of security and confidence in their old age.Under the purview of the Ministry of Manpower, the Central Provident Fund is administered by the Central Provident Fund Board which is a Statutory Board.
Your CPF is for your retirement. You can withdraw your CPF savings when you turn 55, after setting aside your CPF Minimum Sum. Your CPF Minimum Sum can be used to buy life annuity from a participating insurance company, placed with a participating bank or left in your Retirement Account with the CPF Board. From 62 (current draw-down age), you will receive monthly payments from your CPF Minimum Sum to help meet your basic needs in retirement.
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.
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.
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).
Company Directors and Shareholders FAQs (25)
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
The paid-up capital can be of any legal currency.
Singapore Company Act requires all Singapore incorporated company must have at least one director who is “ordinarily resident in Singapore” i.e. Singapore Citizen, Singapore Permanent Resident, or a person who has been issued with a work pass such as EntrePass/Employment Pass/Dependant Pass.
Any person above the age of 18 years may be appointed as a director. However, certain individuals e.g. bankrupts, are disqualified from holding director positions.
Singapore company act requires a minimum of one director who must be a Singapore resident.
A foreigner who wants to register a new company in Singapore and act as a resident director of the company must obtain a work pass before he can act as the local resident director.
Company Incorporation FAQs (12)
Once the Singapore company has been incorporated, what are the post incorporation issues I need to consider before I can start my company business activities?
After your Singapore company has been setup, you can start your business activities immediately. However, you may need to do the following if it is applicable to you.
- Open bank accounts. You may want to choose a bank that serves your corporate banking needs. i.e. Letter of credit, multi currency, location of the bank, banking hours, and check the other services they can offer you, etc.
- If your business requires one or more licenses, you may need to obtain the relevant licences first before you can commence your business activities.
- Register for Goods & Services Tax (GST) if necessary. The registration of GST is not mandatory unless your annual turnover exceeds S$1 million. We can help to register for GST, if you so require.
- If your company activities involves import and exports of goods, you will need to register and obtain a Central Registration (CR) number. The CR number is used in all import, export and transshipment permits, certificates and any other documents issued by the Singapore Customs. We can help obtain a CR number for your company if required.
- If you plan to hire any foreign employee including yourself, your company will need to apply for employment pass (EP) for that person. We can assist you with Employment Pass applications.
- If you intend to hire local employees (Singapore Citizens and Permanent Residents) you will need to open a CPF account with the Central Provident Fund (CPF) Board and a percentage of the local employees’ salaries will be contributed to this Board on a monthly basis as part of their retirement fund. For more details, please visit the CPF website. We can help you register your Company CPF account and manage your staff payroll, if required.
- You will need to decide on your company’s financial year end which can be any date within 18 months from the date of incorporation of your company.
- You will need to keep track of your income and expenses (bookkeeping) according to Singapore accounting standards. Depending upon the volume of transactions, we can provide bookkeeping services either on a weekly, monthly, quarterly or yearly accounting basis
To proceed with your Singapore company formation, you need the following:
|Company Name||For your Singapore registered company, you must avoid choosing a company name that is:
|Paid-Up Capital||The minimum paid-up capital for setting up a Singapore company is S$1.|
|Registered Address||A local Singapore address is a requisite to incorporating your Singapore company. The registered address can be either a residential or commercial address, but not a PO Box.|
|Directors||For setting up your Singapore company, a minimum of one (1) local director is mandatory. The local director must either be a Singapore Citizen, a Singapore Permanent Resident, or an EntrePass, Employment Pass, or Dependent Pass holder.|
|Shareholders||The Singapore private limited company set-up requires a minimum of one (1) shareholder and a maximum of 50 shareholders. Foreign corporate and individual shareholders are allowed to own 100% of the shares.|
|Company Secretary||The Singapore Companies Act requires every Singapore incorporated company to have a company secretary within 6 months of its incorporation.|
For foreign employees, CPF contributions are not required. You just need to pay the agreed upon salary to your foreign employees and that’s all.
No tax deductions are required either for local or foreign employees’ personal salary. The employees are directly responsible for their personal taxes.
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).
Company Statutory Compliance FAQs (28)
If you were to choose your Financial Year end within 12 months, you will enjoy the full S$100,000 tax exemption for exempt companies.
All Singapore incorporated company must hold an Annual General Meeting (AGM) once every calendar year.
The first AGM must be held within 18 months of its incorporation.
All Singapore Companies are required to lodge an Annual Return within 1 month of its AGM.
Financial Year End is the end of company accounting period normally recurring every 12 months.
Directors have a fiduciary duty to their company whereby they must be loyal to the company and must act honestly and in good faith when exercising their powers.
Corporate Services FAQs (28)
Yes most bank in Singapore will allow you to open multi-currency account or different accounts for different currencies.
“Can the bank account be opened before the company is setup? If not, how soon after incorporating the company can I open the bank account?”
The bank account can only be opened once the company has been incorporated. We will prepare the necessary Bank account documents required immediately for opening of the bank account with the bank of your choice.
Depending upon the bank, it may take from one day to few weeks.
There are no restrictions for moving funds in and out of Singapore. You should check with a qualified professional in your home country regarding the rules and regulations in your home country there, if any.
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
Corporate Tax FAQs (4)
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.
|Value of property||Rate (%)|
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%|
|International Commodity Trader||10%|
|Arts & Antique Dealers||10%|
|Asian Currency Unit||10%/exempt|
|Insurance & Re-insurance Co.||10%/exempt|
|Members of Commodity Futures Exchange||10%|
|Financial Sector Incentive Co.||5%/10%|
|Commodity Derivatives Trader (New)||5%|
“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|
Permanent Residence FAQs (2)
The processing time for an application is about 1-6 months, depending on the immigration office and other factors. Applicants will be informed of the outcome by email.
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.
GST FAQs (16)
“My turnover is more than S$1 million in the past 12 months but I do not want to be registered for GST. Can I be exempted from registration?”
No. It is compulsory for you to register for GST once your liability to register arises. The only exemption is when you are certain that your turnover for the next 12 months will not be more than S$1 million. For example if you have plans to wind up your business in the next 12 months.
If your taxable supplies are wholly and substantially zero-rated supplies, you may apply for exemption from registration.
If you are granted an exemption, you need not file GST returns. However, you will not be able to claim the GST incurred on your business purchases of goods or services.
“Zero-Rated Supplies” refer to export of goods or international services. For example, provision of international transport.
“If I fail to register and did not collect any GST from my customers, will my GST registration still be backdated?”
Yes. You will be required to account for and pay the GST on all your taxable supplies made from the date that you should be registered and to pay the relevant penalties. This is so, even if you did not collect any GST from your customers.
If you are late in registering for GST, you will be guilty of an offence and be liable on conviction to a fine up to S$10,000 and to a penalty equal to 10% of the tax due in respect of each year commencing from the date on which you are required to make the notification or to apply for registration.
As per Singapore Company Laws, responsibilities of directors are quite onerous for all directors including nominee director. The nominee director is required to pay for the company liquidation charges in case the foreign client is no longer reachable. Our nominee director service is provided by the reputable and trustworthy professionals and to safeguard interests of the nominee director, we require that a security deposit be kept with us for as long as our nominee director service is active.
- Your annual turnover is not more than $1 million, or
- You only supply goods outside Singapore (out-of-scope supplies), or
- You make exempt supplies of financial services that are also deemed as international services
Personal Tax FAQs (11)
General Personal tax Information – for Individuals (Foreigners):
- The amount of income tax that you have to pay depends on your tax residency in Singapore.
- Top marginal resident tax rate of 20% kicks in at S$320,000 of taxable income. Non-residents are taxed at the flat rate of 15% or the resident rates whichever results in a higher tax amount.
- Income is assessed on a preceding calendar year basis, ending 31 December. You must File Your Annual Tax Form by 15 April of the following year. You can usually expect to receive the income tax bills from May to August.
- Besides salaries and bonuses, perquisites such as housing and stock options will form part of your taxable employment income.
- Overseas income derived outside Singapore, Singapore dividends and bank interests are tax exempt in Singapore.
Paying your taxes: Sign up for the 12-month interests free GIRO Deduction Plan to pay your income tax
by installments. Otherwise, full payment has to be made within one month from the date of the income tax bill.
Are you a Tax resident or non-resident?
Different tax rates apply for tax residents and non-residents. You will be treated as a tax resident for a
particular Year of Assessment (YA) if you are a:
- Singaporean; or
- Singapore Permanent Resident (SPR) if you have established your permanent home in Singapore; or
- Foreigner who stayed/worked in Singapore for 183 days or more in previous year (excludes director of a company).
Otherwise, you will be treated as a non-resident for a particular YA for Singapore tax purposes.
Tax rates for non-resident individuals
- Employment income
Your employment income is taxed at 15% or resident rate, whichever gives rise to a higher tax amount.
- Director’s fees, consultation fees & all other income
The director’s fees, consultation fees and all other income that you received will be taxed at 20%.
If you are leaving Singapore or changing job
If you are about to leave Singapore or changing to another job within Singapore, your current employer
needs to notify IRAS and ensure that you settle all your taxes before you go. This process is known as tax
clearance. If you have any existing stock options or awards on hand which have yet to be exercised or vested,
you will be deemed to have derived gains from the stock or awards at the point of tax clearance.
Tax rates for resident individuals
|Chargeable Income (S$)||Rate (%)||Gross Tax Payable (S$)|
|On the first
On the next
|On the first
On the next
|On the first
On the next
|On the first
On the next
|On the first
On the next
|On the first
For YA 2008 and 2009, a personal income tax rebate of 20%, up to a maximum of $2,000 is granted.
Ways to save tax
- Tax residents are eligible for tax reliefs that can be offset against the assessable income. You can get reliefs for wife support, child maintenance etc. Conditions apply.
- You may claim expenses incurred against your employment income; enjoy tax deductions for approved charitable donations. Conditions apply.
- Under the Not Ordinarily Resident (NOR) Scheme, you can enjoy either Time Apportionment of Singapore employment income or Tax Exemption of Employer’s contributions to Overseas Pension Fund, or both. Conditions apply.
- If you work for a foreign employer and need to travel overseas in the course of work, you may enjoy time apportionment of employment income under the Area Representative Scheme. Conditions apply.
- With the Avoidance of Double Taxation Treaties signed by Singapore, your income may not be taxed twice in Singapore and your home country. Conditions apply.
Need help on your Tax assessment and submission?
Asiabiz Services can assist you in your personal income tax filings. Our personal tax filing services include:
- Registration for new tax payers
- Preparation and filing of income tax return based on your income and determination of possible deductions and reliefs that are applicable to you
- Request for extension of deadline, if necessary
- Preparation of Form IR8A for employees
- Tax planning and tax advice
If you would like us to assist you with your personal income tax return, please contact us at +65 6320 1877 to discuss your requirement in detail or send us an email at [email protected] and we will get back to you.
Singapore DOES NOT have a Capital Gains tax.
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].
“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.
“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.
Trademark Registration FAQs (9)
A registered trademark confers on the owner the right to prevent others from using it in Singapore as a trademark without the owner’s permission.
It is not imperative to apply for a trademark in Singapore before seeking protection overseas. However, in order to file an international application under the Madrid Protocol, you should register the trademark in the country of origin.
No, registering your trademark in Singapore does not entail protection overseas.
Your trademark registration is valid for 10 years and indefinitely, with subsequent renewals provided the mark is used properly.
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.
Work Visa FAQs (13)
The Personalised Employment Pass does not allow you to register a business in Singapore. The pass is intended for professionals who wish to be employed by a third-party employer.
There are two ways Employment pass application can be submitted to the Authority by online or manual submission.
- The electronic EP application submission online is faster in processing the outcome of the applicant. This route is recommended for applicant who can satisfy the EP eligibility requirements easily stated above.
- Manual submission takes a longer time to process. The advantages are that it allows supporting documents to be submitted, which can enhance the chances of a positive outcome, if the applicant primary eligibility requirements is lacking.
The Online Process
The online process consists of the following steps:
- Step 1: Application to obtain authorization code to submit application online for newly incorporated company. Upon submission, it takes about 7-14 days for Ministry of Manpower to send the authorization code.
- Step 2: Upon Submission of applicant application online, it takes the Ministry of Manpower aroung 3 weeks or more to process the application and notify the outcome. Subsequent application do not have to repeat for step one.
The Manual Process
This manual submission route is normally recommended for applicants who do not satisfy the EP eligibility requirements, but have sufficient supporting credentials to support their EP application
- The Application is submitted manually to MOM with all the supporting documents.
- The processing time is about five weeks upon submission. Processing time may take longer during peak periods or when additional information is required from the various economic agencies.
The EP does not fall under any quota system nor is there a monthly levy charge for EP. The MOM will review the application based on the applicant and company merit.
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.
Employment Pass Eligibility Summary Table
|Pass Type||Factor One||Factor Two||Factor Three|
|P1||Fixed monthly salary
|Professional, Managerial, Executive, Specialist jobs|
|P2||Fixed monthly salary
|Professional, Managerial, Executive, Specialist jobs||Recognised qualifications|
|Q1||Fixed monthly salary
|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)|
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