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Central Provident Fund FAQs (9)

What is CPF for?

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.

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.

Company Directors and Shareholders FAQs (25)

What is the minimum numbers of Directors a company must have?

Singapore Companies Act requires that at least one of the company directors must be ordinarily resident in Singapore i.e. Singapore citizen, Singapore Permanent Resident, employment pass, EntrePass or dependent pass holder. We can provide Nominee Director Service to meet this statutory requirement, if you do not have a local resident director.

What is a Shareholder?

A shareholder can be an individual or a company (commonly known as a corporate shareholder) who owns a share or multiple shares of the company. A company can be owned by multiple individuals or a single corporate shareholder. To be considered a shareholder, you must own at least one share of the company. Shareholders (often referred to as, “the members”) are the actual owners of the company. The minimum number of shareholders is one; the maximum number of shareholders is twenty in the case of an exempt private limited company.

Singapore Companies Act allows local and foreign Corporate and Individual shareholders to own 100% of Singapore companies.

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

Company Incorporation FAQs (12)

What are the Requirements for Registering a Singapore Company?

To proceed with your Singapore company formation, you need the following:

Requirements Description
Company Name For your Singapore registered company, you must avoid choosing a company name that is: 

  • identical to existing local company names;
  • offensive, obscene or abusive names; or
  • already reserved.
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.

Are there any CPF contributions For Foreign Employees?

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.

Are we responsible for the personal tax of foreign employees?

No tax deductions are required either for local or foreign employees’ personal salary. The employees are directly responsible for their personal taxes.

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).

Is there authorised capital in Singapore?

Singapore has abolished authorised capital requirements for a Singapore company.

Company Statutory Compliance FAQs (28)

What are some of the statutory obligations the director have to comply with?

Changes in certain statutory information (e.g. notification of a change of registered office address, appointment or resignation of directors, secretaries, or auditors, allotment of shares) must be lodged with the ACRA on the prescribed forms within specified time limits as stipulated by the Companies Act.

In addition, an annual return must be filed with the ACRA together with a copy of the audited accounts of the company within one month from the date of the annual general meeting of the company unless it is an exempt private company (a private company whereby its shares are not held directly or indirectly by any corporation and which has not more than twenty members). An exempt private company has to file an exempt private company certificate which states that the company is in a position to meet its liabilities as and when they fall due and that a set of audited accounts has been laid before the company at the annual general meeting.

When do I need to Notify Changes in the company?

ACRA has to be notified every time there is a change in the company structure such as:

  • Shareholder or to its officers,
  • Change in particulars i.e. passport number, nationality, residential address of the director/shareholder/s,
  • Change of financial year end,
  • Change of registered office address, etc.,

Failure to do so will incur penalties.

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

Is the company secretary an officer of the company?

Yes.  The Company Secretary is the officer of the company and his/or her name must be registered ACRA Records.

Corporate Services FAQs (28)

Is the company secretary an officer of the company?

Yes.  The Company Secretary is the officer of the company and his/or her name must be registered ACRA Records.

What is the nominee director?

A nominee director is a third party provided by us to be registered as the local resident director of the Singapore Company due to Singapore Companies Act requirements.

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

Corporate Tax FAQs (4)

What is the Stamp Duty Tax for Property Transfer in Singapore?

Value of property Rate (%)
First S$180,000 1.0
Next S$180,000 2.0
Thereafter 3.0

 

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.

Permanent Residence FAQs (2)

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.

How long does it take to process my application as a Singapore PR?

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.

GST FAQs (16)

What is GST?

Goods and Services Tax (GST) is a consumption tax that is levied on the supply of goods and services in Singapore and the import of goods into Singapore.

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.

Personal Tax FAQs (11)

What are the capital gains tax rates in Singapore?

Singapore DOES NOT have a Capital Gains tax.

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.

Trademark Registration FAQs (9)

Must I register a trademark in Singapore before seeking protection overseas?

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.

If my trademark is registered in Singapore, does it give me protection overseas?

No, registering your trademark in Singapore does not entail protection overseas.

How long does a registered trademark last?

Your trademark registration is valid for 10 years and indefinitely, with subsequent renewals provided the mark is used properly.

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.

Why should I register a trademark?

Trademark registration gives you rights to control the use of a particular symbol

Work Visa FAQs (13)

Is there any limit on the number of employment pass applications for a Company?

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.

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

Need help starting a business in Singapore?

We’ve got it all covered. With AsiaBiz, you get a dedicated one-stop solution for your company incorporation, immigration, offshore setup, accounting, taxation, and corporate compliance needs.
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