FAQs

Central Provident Fund FAQs (9)

What is CPF?

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.

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).

Company Directors and Shareholders FAQs (25)

How many directors must a Singapore company have?

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.

Number of Shareholders

“Can One Person or a company own all the company Shares? How many Shareholders must a company have?”

Yes, Singapore companies Act allows a minimum of one individual or corporate shareholder. A Singapore Company may be registered with only one shareholder who can be an individual or a corporation.

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.

Company Incorporation FAQs (12)

Post-Incorporation Considerations

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

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.

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).

Company Statutory Compliance FAQs (28)

What are fiduciary duties?

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.

Who are exempted from auditing their company accounts?

Singapore companies Act exempt the followings companies from audit:

  • have less than 20 shareholder ( exempt Private Limited Company)
  • No Corporate shareholders
  • Annual turnover does not exceed S$5m
  • Dormant companies

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

Corporate Services FAQs (28)

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

Does Asiabiz provide a Nominee Director service?

“If we don’t have anybody in Singapore who can act as the local resident director for our company, do you provide the service of a nominee director? What role will he play in our company?”

Yes, we do provide nominee director service. However, please note that our nominee director will not have any financial, management, or operational interest in the company. His main role is just to satisfy the statutory requirement of a local resident director for your Singapore company.

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

Corporate Tax FAQs (4)

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.

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+%

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.

GST FAQs (16)

What are the Conditions for voluntary GST registration?

GST registration can be made on a voluntary basis.  Some of the conditions for which this might be useful are:
  • 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

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.

Personal Tax FAQs (11)

Singapore Personal Tax Tips

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
20,000
10,000
0
3.50
0.00
350.00
On the first
On the next
30,000
10,000
5.50
350.00
550.00
On the first
On the next
40,000
40,000
8.50
900.00
3,400.00
On the first
On the next
80,000
80,000
14
4,300.00
11,200.00
On the first
On the next
160,000
160,000
17
15,500.00
27,200.00
On the first
Above
320,000
320,000
20
42,700.00

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 ptax@asiabiz.sg and we will get back to you.

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.

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.

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.

Work Visa FAQs (13)

What are the procedure and timeline to obtain an Employment pass?

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.

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.

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.

Share This
Call Us
Skype
Text Us
Email Us