Advisory on safe distancing measures in Singapore

Singapore is tightening border restrictions as the COVID-19 epidemic continues to worsen around the world, with important notices about safe distancing measures from authorities.
The following measures are taken to prevent the rapid spread of coronavirus in Singapore.

Stay-Home Notice (SHN)

1. Health care for people on Stay-Home Notice

Persons under SHN must stay at their place of residence at all times for 14 days after entering Singapore. They must not leave their place of residence, even if it is to buy food and essentials. If necessary, they can choose home delivery services or enlist the help of others for their daily necessities.

They should minimize contact with others, avoid letting guests arrive at their place of residence, monitor their health closely and observe good personal hygiene. Avoid contact with other people (outside their household) within 2 meters beyond the purpose of receiving delivery of food or other necessities. They should maintain a record of the people they have close contact with during this time.

Avoid interacting with vulnerable people, for example, seniors aged 60 or older or people with underlying health conditions, even if you are not experiencing any symptoms. Consider alternative accommodation if these interactions cannot be avoided.

If sharing a house with others, stay in your room as much as possible and use a dedicated toilet if possible. Do not use common utilities in your estate/building, including swimming pool, gym or playground. If applicable, notify your employer or school that you have been issued an SHN as soon as possible.

The Singapore Government agencies, such as MOE, ECDA, MOM, and ICA, may contact you through a variety of platforms including phone calls, WhatsApp or SMS. When contacted, you must respond within an hour.

2. All short-term visitors will not be allowed to enter or transit through Singapore

From March 23, all short-term visitors (from anywhere in the world) will not be allowed to enter or transit through Singapore.
The Ministry of Manpower (MOM) will only allow the entry/return of work pass holders, including their dependents, to those who provide essential services, such as in healthcare and transportation.

Short-term visitors with recent travel history to mainland China, France, Germany, Iran, Italy, South Korea, and Spain will still not be allowed entry or transit in Singapore, as previously instructed. Short-term visitors who are allowed to enter will have to provide proof of where they will serve the stay-home notice, for example, a hotel reservation covering the entire time or a place of residence that they or their family members own.

The latest directive was issued just days after the task force said stay-home notices would be issued to all tourists traveling to Singapore on a recent trip to Southeast Asia countries, Japan, Switzerland or the UK within the past 14 days.  These notices have been applied to people with a history of travel to mainland China (except for Hubei province), France, Germany, Italy, Iran, South Korea, and Spain before.

3. Work pass holders entering Singapore from Malaysia

The Singapore-Malaysia Special Working Committee has agreed that the transport of all types of goods between Malaysia and Singapore will be facilitated during the duration of Malaysia’s Movement Control Order. As such, those conveying essential services, or supplies (e.g. lorry drivers, vegetable supply truckers, frozen supply truckers) via land and sea crossings will be exempted from MOM’s entry approval and SHN requirements.

Starting March 25, all new and existing work pass holders (including dependents) planning to enter Singapore from Malaysia must obtain MOM’s approval before they begin their journey. This is regardless of the mode of travel into Singapore.

The Singapore-Malaysia Special Working Committee agreed that the transportation of all types of goods between Malaysia and Singapore would be facilitated throughout Malaysia’s Movement Control Order. Therefore, transportation services or essential supplies (for example, truck drivers, vegetable delivery truckers, frozen supply drivers) via road and sea transport will be exempted from MOM’s entry approval and SHN requirements.

Leave Of Absence (LOA)

With the increasing risk of importing COVID-19 cases into Singapore, the Ministry of Manpower has called on companies to apply for a leave of absence (LOA) for employees returning from abroad between March 14 and 20, before stay-home mandatory requests for all people entering Singapore kick in.

Employers who place their employees in this voluntary LOA will be able to request daily assistance under the MOM program to reduce the companies’ financial burden during the COVID-19 outbreak.

This initiative follows recent, more stringent measures applied by schools to limit the spread of coronavirus after more infections and an increase in imported cases has been recorded in Singapore.

All students and staff returning from overseas between Saturday (March 14) and Friday (March 20) will be entitled to a mandatory 14-day leave of absence from the date of return.

MOM said companies should adopt flexible work arrangements to allow these employees to work from home during the 14-day period. Such companies should continue with existing flexible work and leave arrangements, including requiring their employees to use annual leave to cover the company that imposes the LOA.

The Government recognizes that many parents have been affected by this national measure due to the need to provide care for their children during this period. At the same time, it is a useful precautionary measure for people who have traveled recently to stay away from the workplace to prevent further transmission. Hence, MOM encourages employers to similarly impose LOA for all employees returning to Singapore between 14 and 20 March 2020 if they have not been issued with SHN. To help these companies, the MOM will allow them to apply for the $100 daily support under the Leave of Absence Support Programme (LOASP), which covers only employees who are Singapore Citizens (SC), Permanent Residents (PR), and Work Pass holders. Companies can also claim a levy waiver for their affected work pass holders. Those who are self-employed and who have to put themselves on LOA will similarly be allowed to claim this daily support.

Eligible employers will be able to apply for daily assistance for each affected employee after their LOA is completed. However, employers, Singaporeans who are self-employed and permanent residents will not be able to claim under the support program if they work remotely during the LOA or if the affected employee must use his/her annual leave, parental leave or any other type of leave to cover the LOA.

In addition, people who have been placed on stay-home notice when returning to Singapore and whose travel was not between March 14 and 20 are not eligible for daily support under this program.

A number of employers have implemented a policy in which employees returning from overseas travel between March 14 and March 20 will be put on company-based LOA (company-LOA). These employers should continue with current flexible work arrangements (FWAs) or leave arrangements, including requiring employees to take annual leave to cover the company-LOA.

During the company-LOA period, employers should apply FWAs to allow these employees to work from home. Since the company-LOA would not be discussing with employees before the travel abroad commenced, employers are encouraged to provide additional paid leave to employees if work from home is not feasible.

MOM will extend LOASP to employers who give additional paid leave to employees who have returned to Singapore between March 14 and March 20 to cover the company-LOA. SEPs will also be eligible if they have a self-imposed LOA in 14 days.

Employers and self-employed SCs and PRs will not be eligible for LOASP if:

  • Work performed remotely during the company-LOA phase;
  • Affected employees are required to use annual leave, childcare leave or other paid leave entitlements during the company-LOA phase;
  • Affected employees have been included in the mandatory SHN upon returning to Singapore but the trip did not begin before the date specified to meet the LOASP criteria.

Quarantine Order (QO)

Quarantine Order (QO) is a legal order intended to isolate an individual who is suspected of being a carrier of an infectious pathogen or in close contact with a person confirmed to be infected with an infectious disease, in this case – COVID-19.

Most individuals receive QOs for quarantine at home, but if they do not have suitable accommodations, they can also serve at the Government Quarantine Facilities (GQFs).

People in QO cannot leave their houses or GQFs and cannot contact other people. Visitors will not be allowed for those on the QO, and all food and necessities will be delivered to them. QO people need to monitor their temperature and report their health status to their QO agent via video call at least 3 times a day.

Because the QO is enacted under the Infectious Diseases Act, noncompliance will be severely punished. Auxiliary Police officers are deployed to check in place and ensure QO compliance at home and the GQF.

If you belong to the QO group, you are considered paid leave for hospitalization, as part of an employee’s right to leave for admission. Besides, the Quarantine Order Allowance Scheme offers a $100 daily claim under QO to help minimize QO’s financial impact. Both self-employed individuals and companies with employees served with a QO may claim this allowance.

Self-employed individuals must be Singapore Citizens or PR and cannot break the terms of their QO. Companies wishing to receive this benefit must be registered in Singapore and their employees serving QO must be Singapore Citizens, PR or work pass holders working in respect of the terms of their QO. The company must also show that they continue to pay this employee during the QO period. People with QO who are unemployed and need financial assistance can contact their QO agent for help.

How the Singapore government responds to Covid-19’s impact

The number of confirmed coronavirus infections in Singapore reached 243 on March 16. After identifying local coronavirus cases unrelated to previous cases or with people with a history of travel to China, Singapore raised the new coronavirus risk assessment from DORSCON Yellow to DORSCON Orange, on February 7.

Disease Outbreak Response System Condition (DORSCON) applied by Singapore shows that the disease situation is common at four levels – the lowest is Green (level 1) and the highest is Red (level 4). Orange, being the third level, only lacks one level of Red. Let’s find out how the Singapore government is prepared to cope with the effects of Covid-19.

The impact of Covid-19 on Singapore will last at least one year

In an interview with CNBC Asia on March 11, Foreign Minister Vivian Balakrishnan said that Covid-19 was not the same as during the severe acute respiratory syndrome (SARS) outbreak in 2003. It would last at least one year, which means that governments must take long-term, sustainable and rational action.

Firstly, the immediate response of fear has caused a collapse for industries such as tourism, aviation, and retail. The next thing will impact on supply chains and energy.

In addition to the current challenges of containing the virus in the coming months, he said the government is considering how to move forward next year, including how to reboot the economy.

So far, Singapore has had a zero mortality rate, but Dr. Balakrishnan has resisted assuming that it will certainly stay the same. However, he spoke to front-line doctors, who shared that Singapore’s healthcare system has the resources, staff, and equipment needed to handle current challenges.

He also encourages all Singaporeans to e-Register their trips so it will be easier to contact them when needed.
Besides Singapore’s healthcare and economy, he believes that coronavirus is also a test of our social capital as a country and we are committed to not leaving any Singaporean behind.

He added that a strong economy is very important for health care because it ensures that a country has the resources it needs to spend on health care.

A significant impact potentially in a prolonged fashion

In an interview with CNBC’s “Squawk Box Asia”, Lawrence Wong – Singapore’s minister of national development, told that the Singapore government was dealing with a twin crisis at an unprecedented rate: One, a public health emergency; Second, an economic crisis.

An economic crisis will be more serious than anything we’ve ever seen in modern history – said Mr. Wong, who is also the second minister of finance and co-chair of a multi-ministry task force to fight COVID-19.

Singapore, a Southeast Asian country with a population of about 5.7 million, is one of the earliest people outside of China to report new cases of coronavirus infection. However, this country hasn’t reported any deaths.

As a commercially dependent economy and a major aviation center, Singapore is expected to be severely affected by the coronavirus outbreak. Last month, the government lowered its forecast range for the change in the Gross Domestic Product from -0.5% to 1.5% this year – worse than the previous growth forecast of 0.5% to 2.5%.

With the virus spreading to more countries in the past month and showing signs of mitigation, the Singaporean government is preparing a second stimulus package to support its economy. These are S$ 5.6 billion (US$ 3.92 billion) of additional measures announced last month to help businesses and households cope with the disease.

“We’re looking at a second package because we recognize that given what we’re facing today, there will be significant impact not just in the near term, but potentially in a prolonged fashion”, said Mr.Wong.

The most vulnerable field in Southeast Asia to COVID-19 impact

Singaporean banks are amongst the areas expected to be hardest hit by the COVID-19 outbreak, along with Thailand, Fitch Ranking (an American credit rating agency and one of the “Big Three credit rating agencies”) said in a note.

The direct contact of Singapore banks with China, which is larger, on average 24% of gross loans, is a potential stress area. On the other hand, local banks exposed to China mainly include low-risk assets, including loans to leading corporations, short-term commercial loans or liquidity with major Chinese banks. But the slowdown in economic activity will still test the resilience of Singapore banks.

The announced relief measures will also ease pressure on asset quality and profitability in the short term. These measures include a 6 to 12-month on Small and Medium Enterprise property loans and some retail mortgage loans.

Top 5 highlights of the Singapore Budget 2020 you can not ignore

Since Singapore is dealing with the economic fallout from the ongoing Covid-19 outbreak, Singapore Finance Minister – Mr. Heng Swee Keat while presenting the Budget 2020 in the country’s Parliament on February 18, proposed a series of measures worth $5.6 billion. It includes the $4 billion Stabilisation and Support package (to help workers and businesses solve in near-term economic uncertainty), and $1.6 billion Care and Support package (for family expenses). And some additional supports will also be given to sectors directly influenced by the coronavirus outbreak, such as tourism, aviation, retail, foodservice, and point-to-point transport services.

Here are the top 5 highlights of the Singapore Budget 2020 you need to know.

1. The Singapore government is fighting against the ever-increasing coronavirus

The Singapore Budget 2020 speech took place in parliament amid growing uncertainties of the Covid-19 virus (corona/nCoV) in the region. With the outbreak becoming more of a threat every day, the Singapore government did take time to announce measures to address this issue seriously.

At least S$ 800 million is committed to frontline activities fighting the nCoV virus. This budget will be allocated between the Ministry of Health and other related ministries.

A series of plans have been put in place to support frontline activities to cope with the Covid-19 outbreak, as well as measures to reduce the impact on the economy and help heavily affected industries that are most devastated by the virus outbreak.

A large number of allocations, which lie on the considerable resources committed each year for public health, will be allocated to the Ministry of Health (MOH) to address the outbreak.

2. Actions improve the Economic Situation with Support packages

Nearly $6 billion has been set aside to address economic deficits and other problems caused by coronavirus outbreaks.

Care and Support package

This package is one of the key points of the Singapore Budget 2020 speech. The $1.6 billion Care and Support Package has been allocated to all Singaporean households. Each Singaporean adult over 21 years old will be paid in a lump sum of $100 to $300. The amount depends on their income.

People who earn up to $28,000 in the 2019 evaluation year will receive $300. Those with incomes between $28,001 and $100,000 will receive $200 and those whose income is assessed more than $100,000 will receive $100. Moreover, those who own multiple properties will only receive $100. And parents with children under the age of 20 will receive an additional $100.

Stabilization and Support package

This package amounts to $4 billion, will help stabilize the economy and support the country’s workers and enterprises by helping workers stay in their jobs, and help enterprises with cash flow.

To help workers stay employed, their wage cost will be defrayed through two schemes:

a) Jobs Support Scheme

An employment support program will be introduced to help businesses retain local employees.

  • For every local employed employee, the Ministry will compensate 8% of wages, up to a monthly limit of S$3,600, for three months.
  • The money will be given to the employer by the end of July 2020.

This program, which includes 1.9 million local employees in Singapore, will cost the government S$1.3 billion.

b) Wage Credit Program

In order to support the increase of salaries for local employees, the Wage Credit Program will be strengthened.

  • The monthly salary cap for Singaporean employees will be increased from S$ 4,000 to S$ 5,000 a month, to increase eligible salaries in 2019 and 2020.
  • The enhancements, worth S$ 1.1 billion, will be available to approximately 90,000 businesses, benefiting more than 700,000 local employees.

c) Corporate Income Tax Rebate

Under the Stabilisation and Support package, economy-wide support to help enterprises with cash flow will be given too.

  • For example, the Corporate Income Tax Refund for the 2020 review year will be issued at 25% of the tax payable, at S$ 15,000 each.
  • The discount will benefit all companies that pay taxes and cost around S$ 400 million.

3. GST in 2021 is not increasing

Many are expected to raise GST during the budget speech of 2020, but that has not changed right now. The GST will remain 7% despite predictions – making this fact one of Singapore’s top 2020 budget information.

However, Mr. Heng emphasized that the increase may be necessary by 2025. Instead, companies will be reduced income tax in the fiscal year 2020 at a rate of 25%.

4. Measures fight against climate change

This year, the Singapore government decided to approach this issue primarily by promoting Electric Vehicles (EVs).
Gasoline and petrol vehicles are one of the biggest reasons for climate change and global warming. Therefore, to minimize the use and promote EVs, carbon taxes were introduced last year. This year too, taxes will be provided continuously, with incentives for those who are using electronic transport.

From 2021, streetcars and taxis will be refunded up to 45% on the Additional Registration Fee, capped at $20,000. This is part of the Commercial Vehicle Emissions Scheme (CVES) for light-duty vehicles and will be available initially from 2021 to 2024. Besides, road tax for electronic vehicle owners will be reduced in the coming days.

The government also aims to expand the number of charging points to 28,000 from the current 1,600 by 2030. Moreover, government vehicles and public transport will eventually be electronic. The budget speech for 2020 also included Mr. Heng’s introduction of the $5 billion Coastal and Flood Protection Fund.

5. Other Highlights

In his two-hour and 15-minute speech, Mr. Heng also outlined measures for economic development, business transformation, and workforce development. To encourage workers to upgrade their skills, the government will make a one-time $500 deposit to the SkillFuture account of all Singaporeans aged 25 and over.

Middle-aged workers between the ages of 40 and 60 will get an additional $500 to top up at the beginning, to help them get acquainted. Credit from both leading companies will expire in about five years, to motivate Singaporeans to use them.

Guide to Avoidance of Double Taxation Agreements (DTAs) in Singapore

Avoidance of Double Tax Agreements (or DTAs) is an agreement designed to eliminate this unfair penalty and encourage cross-border trade, signed between Singapore and a DTA country. By the fact that Singapore’s tax structure is based on the premise that double taxation impedes international business by imposing unfair sanctions on companies engaging in cross-border trade. To prevent such double taxation, Singapore has joined DTAs with a wide network of such countries. Therefore, a resident company in Singapore does not seem to face double taxation.

What is Double Taxation?

Double taxation arises when two or more countries tax on the same taxpayer on the same taxable income or capital. In other words, the same income is being taxed twice – the source country where the income is generated and the country of residence where the income is received. To reduce taxpayers from the double tax burden, countries provide various types of relief under domestic tax laws or under tax treaties that they have signed with other countries.

Purpose of Singapore’s DTAs

According to IRAS, DTAs explains the taxing rights between Singapore and the treaty partner on the various types of income generated from cross-border economic activities between the two jurisdictions. The DTAs also stipulates a tax reduction or exemption for certain types of income. Only Singapore tax residents and treaty partner tax residents can enjoy DTAs’ benefits.
Another goal of the DTA is to define the taxing rights of each country. It seeks to prevent international tax evasion by sanctioning the exchange of information between the tax authorities of the signatory states. Besides, it allows you to request a tax reduction on taxes paid abroad.

Residency requirements in Singapore

To take advantage of Singapore’s DTAs benefits in another country, you must be a resident of Singapore or the other country. A Singapore resident is defined under Section 2 of the Singapore Income Tax Act as:

  • An individual: A person who, during the year before the assessment year, resided in Singapore except for such temporary absences that may be reasonable and not in conflict with his or her request to reside in Singapore, and include an actual presence or performance of a job (other than as a director of a company) in Singapore for 183 days or more in the year preceding the year of evaluation
  • A company or agency of people: A company or agency of people who control and manage their business carried out in Singapore.

Thus, if you or your company fulfills the above residency requirement, you may use the provisions of any Singapore’s DTAs with Singapore as your Resident State. Note that even if a DTA does not exist between Singapore and another country with which you are doing business you can avoid double taxation by taking advantage of Singapore’s Unilateral Tax Credits for Singapore residents.

Relieving Double Taxation in Singapore

The methods of relieving double taxation are given either under a country’s domestic tax laws or under the tax treaty. The available methods in Singapore are as follows:

1. Tax Credit

Ordinary credit: Under this method, the Resident State provides a credit equal to its tax on the income in question. If the tax paid to another country is higher than the tax in the Resident State, the taxpayer would not receive full relief.
Full credit: The full amount of tax paid to another country is available in the form of credit while calculating taxes in the Resident State. If the foreign country charges a higher tax rate that the Resident state, the Resident State gives up some of its tax under this method.

2. Tax Exemption

Double taxation can be avoided when foreign income is exempt from domestic tax. The exemption may be granted on all or part of the foreign income.

  • Full Exemption: The income that has been subject to taxation by the non-Resident State is left out altogether from any calculation of taxes by the Resident State. Therefore, relevant income is not included in determining the progressive tax rate that will be applied to the rest of the income.
  • Exemption with progression: Under this method, the income in question is not taxed by the Residence State but it is taken into account to determine the progressive tax rate that is to be applied to the rest of the income.

3. Reduced Tax Rate

Under this form of relief, income is taxed at a lower rate and applies to the following classes of income: interest, dividends, royalties, and profits from international shipping and air transport.

4. Relief by Deduction

In this case, domestic tax is applied on the foreign income after deducting foreign tax suffered. Singapore does not allow a deduction of foreign income tax. However a deduction is given indirectly as under the remittance basis, Singapore would tax the amount of foreign income received (i.e. net of foreign tax) in Singapore.

5. Tax Sparing Credit

Under a DTA, tax credits are usually only available in the Residence State only if the income has been taxed in the source country. Tax sparing credit is a special form of credit whereby the Residence State agrees to give a credit of the tax which would have been paid in the source country but was not, for example, “spared”, under special laws in that country to promote economic development. Tax Sparing Credits are extremely useful and can reduce the effective tax rate to be lower than that charged by either of the two treaty participants.
The provision for duty-free credit is usually found in DTAs between a developing country with tax incentives to attract foreign investment and a developed country as a capital exporter. The credit is given by the country of exportation of its laws to promote investments.

Tax Relief in Absence of DTA

Singapore residents can avoid double taxation even in the absence of DTA with a particular country. This is since Singapore’s domestic laws have exempted most types of income from foreign sources (including dividend, foreign branch profits, and foreign-sourced service income) received in Singapore on or after June 1, 2003, from taxes if certain conditions are met. In summary, these conditions are:
The highest corporate tax rate (headline tax rate) of foreign countries for which income is received must be at least 15% at the time foreign income is received in Singapore. The foreign income had been subject to tax in the foreign country even though the actual tax rate paid on the income can be different from the headline tax rate.

5 Outstanding reasons to relocate to Singapore as an expatriate in 2020

Singapore is the financial hub of Asia, located in both East and West. In fact, it has consistently been praised as a land of opportunity and a country certainly worth considering relocating as an expatriate. Between the beautiful weather year-round and the openness of Singaporeans to foreigners, along with the low unemployment rate, non-existent corruption (compared to other Asian countries) and attractive tax rates for individuals and businesses. Therefore, for individuals, investors and global businesses, moving to Singapore is an ideal and desirable option. Here are 5 reasons why Singapore is the perfect place for any foreigners who want to live and work abroad.

1. Singapore has a high quality of life in Asia

Singapore is continuing to improve the living standards of its residents with greater connectivity and resource sustainability. Indeed, Singapore has ranked first as the country with the highest quality of life in Asia, with the highest-ranking for personal safety. Following Singapore topped the list were Japan, Hong Kong, and Seoul according to Mercer’s 21st edition of the survey based on 39 factors that included political stability, healthcare, education, crime, recreation, and transport. These not only benefit Singaporeans but also make the city the most attractive destination for foreign talents.

Besides, Singapore has one of the best healthcare systems in the world, with advanced medical facilities and well-trained doctors. However, this comes with a high price and because health care in Singapore is very expensive, highly discouraging foreigners to obtain private health insurance.

2. Singapore provides a pro-business environment for expatriates

Singapore retained its place as the second easiest place to do business on the World Bank Doing Business Report, coming after New Zealand for the third consecutive year. Singapore’s international trade links, attractive tax structures, investor mechanisms, advanced infrastructure, a competitive workforce, and a strong economy make Singapore one of the best in the world to do business.

In addition, Singapore ranked first because of easy contract performance, with Korea ranked second. In terms of ease of tax payment, Singapore has risen one place to eighth since the 2018 survey. Singapore continues to hold the top ten positions in areas that investors are most interested in – protecting protect shareholders’ interests, enforce contracts and maintain a tax-friendly business environment.

Whether running your own business or looking for a job with an existing business, Singapore has a business environment that is a highly educated and motivated workforce, so finding Earning top talent to win is a problem. On top of that, moving your business has an extremely simple process.

Getting a work permit is as easy as filling out the online form and waiting a few days for your decision. Despite a very talented workforce, the population of Singapore has only 5 million people making them aspire to acquire foreign talent, which leads to a high acceptance rate in their work permits and high average wages.

3. Singapore is a safe country

Singapore, with a very low crime rate, remains one of the safest countries in the world. This is largely due to their strict penalties for bribery, drug offenses, cheating partners,… which can lead to years in jail. Traveling Singapore alone at any time of the year is considered safe, regardless of gender – this is also true for the safety of children, this is an attractive quality of Singapore for families.

Singapore has a strong legal system and comes with strict punishment. All individuals in Singapore must obey the laws of Singapore. Moreover, Singapore’s judicial system has been praised as one of the most effective systems in Asia. Anti-corruption laws are strongly imposed, thus allowing investors to conduct business without fear of bureaucracy or instability.

4. Singapore has a low tax rate and an attractive tax structure

Singapore is known worldwide for its attractive tax regime. Investors and entrepreneurs are always drawn to attractive tax rates, tax reduction measures, no capital raising tax policies and a network of Avoidance of Double Tax Agreements (DTAs), among other ideal tax incentives.

Also, Singapore’s personal tax system is very simple compared to most of the world and requires individuals to pay nominal tax rates compared to many other countries.

5. Singapore is a land of happiness lifestyle

In addition to career and business opportunities, Singapore offers multiple options for recreation and leisure. It is a multicultural mecca bustling with art festivals, theatre fares, sports attractions, tourist destinations and a range of interesting activities for residents and visitors alike.

Singapore’s geographic location is another asset. The city is ideally located between Malaysia and Indonesia and close to many other destinations such as Thailand, the Philippines or Cambodia. If you are fond of hiking on volcanos or relaxing on sandy beaches, you can travel to many countries, even when on a budget.

Traveling around by bus or the MRT is both very easy and very affordable, and cabs are another very affordable alternative for those who need to visit more remote locations. The country also serves as a hub for travel throughout Asia, with affordable flights regularly available for flying to Southeast Asia, especially for those who are willing to plan last-minute trips.

Why should open an offshore bank account in Singapore?

Singapore, one of Asia’s financial centers, is a favorite destination not only for tourists but also for business. Everyone from the US to China has flocked to invest in Singapore since the 90s. Here are 4 reasons why a company owner should consider opening an offshore bank account in Singapore for a foreign company (Seychelles, Belize, BVI, etc…)

1. Strong financial background

In the past, many account authorizers didn’t pay much attention to choosing banks to deposit, but now after many incidents related to deposits at unreliable banks, they have considered more and more in choosing banks.
Singapore’s banks and financial systems use cutting-edge technology while there are equally safe countries to invest money, very few can provide easy access from Singapore banks. In many other countries, overseas transactions can take days to process and require a complex series of phone calls and exchanges between the authorizer and the bank.

2. Minimize the risk of currency changes

Singapore is a leading global financial hub for providing leading banking infrastructure to support international business. For example, Singapore does not apply capital controls, so currencies are free to exchange and move in and out of the city-state.
Offshore bank accounts in Singapore provide convenient platforms for a company to keep their money in foreign currency, collect and deposit money to bank accounts around the world.
The Singapore Dollar (SGD) is not the required base currency of a Singapore business bank account. The authorizer could hold multiple currencies in their overseas Singapore account and an obvious way to curb the volatility of their base currency in the market and to ensure their purchasing power.

3. Stable and reliable to keep cash in

Opening offshore bank accounts in countries having stable legal status with low debt levels, transparent government, good infrastructure system will help investors and account authorizers feel secure with the money.
If bank account authorizer’s country is experiencing political turmoil, or there is a worry of instability in the banking system, Singapore is a safe place to store their assets. Singapore’s banking sector is subject to strict regulation, which is especially important if they are investing a substantial amount of their wealth.

4. Unique opportunities to invest

Singapore’s unique position, as a bridge between East and West, gives investment opportunities that they won’t get anywhere.
Firstly, they can find many asset management services, funds, brokers, etc. to manage their money if they want to save time through arbitrary asset management.
Secondly, they will be positioned to take advantage of the markets in Singapore (itself as a strong economy), the United States, Hong Kong / China, and Europe, through a range of advanced trading platforms.

If you would like to open an offshore bank account, contact us for free consultation!

What are benefits of offshore companies?

What is an offshore company?

An offshore company, known as an international business company (IBC) may consider to be a company registered outside a country that an owner is residing. Similar to a domestic company, an offshore company can operate a business, own property, open bank accounts, etc. However, it cannot carry out its business in the country of formation, which means it only conducts its business outside the country of formation. Besides, most entrepreneurs open an offshore company with the aim of optimizing tax because it generally does not have tax obligations in the country where it was formed.

Benefits of setting up an offshore company

Tax optimization

One of the biggest benefits of offshore companies is that they are generally a tax neutral, which means the company is exempt from a corporate tax. In fact, offshore jurisdictions are usually considered to be business-friendly because it is easy to register a company, and it has low corporate tax rates or even tax neutral.

Simplicity of setting up an offshore company

Many entrepreneurs often believe that registering an offshore company is a complex process with many stages and lengths of time. However, the process of offshore company formation in many jurisdictions is a quick and seamless process. In fact, the process only lasts from 1 to 4 weeks. Besides, it is not required to hire employees and conduct business activities in a country in which the offshore company was registered.

A method for the business development

It is no doubt that globalization is being, so it is essential for businesses to expand their business scale to a global scale. The business will be more convenient to do business with both domestic partners/clients and foreign ones thanks to the offshore company.

A better banking infrastructure

If you wish to expand your business internationally, an international bank account will be much more important to your business. In fact, the bank account gives you benefits such as high security and protection, easy management of the account and fast and effective global payment with clients/partners in foreign countries, etc.
Generally, entrepreneurs often choose offshore jurisdictions such as British Virgin Island (BVI), Belize and Seychelles to set up offshore companies, but they are not encouraged to open corporate bank accounts in these countries. ACE Global Accountants will give them a better infrastructure to open an offshore business bank account, which is opening the bank account in Singapore. Although it is more complex and difficult to open the bank account in Singapore for the offshore company, it should be considered to do thanks to many advantages. Especially, Singapore is always being as a leading of the financial center of Asia. Read more about Benefits of opening a bank account in Singapore, click here!

Asset privacy and safety

Forming an offshore company in a jurisdiction means you have a strong layer of protection from future liabilities. In fact, your offshore information including an owner, director(s), shareholder(s), sales or debts is not available to the public. The offshore company will be strictly kept confidential information to ensure the rights of company owners. This is also one of the advantages to consider when you intend to set up an offshore company type.

If you would like to form an offshore company, contact us for free consultation!

A tax-residency status for expatriates in Singapore

It does not matter if a foreigner resides in Singapore to study or work, the first step is always to apply for a visa at the Singapore Ministry of Manpower (MOM). In previous articles, ACE Global Accountants has guided you on how to apply for a visa in Singapore.

Hence, the following article will share the next concern of many foreigners who intend to relocate to Singapore to work and reside in. That is a tax-residency of expatriates working in Singapore.

Tax obligation of expatriates in Singapore

  • You are regarded as a tax resident if your period of stay (inclusive of work) in Singapore is 183 days or more in a calendar year.
  • You are regarded as a non-resident for tax purposes if your period of stay (inclusive of work) in Singapore is less than 183 days in a calendar year.

Do note the number of staying and working days in Singapore includes public holidays and weekends. Temporary absences (vacation in a foreign country) or accidental work-off (business trips abroad) are still counted in the total number of working days to determine the tax residency status.

Tax regulations of expatriates in Singapore

A tax resident in Singapore

Period of stay (inclusive of work) in Singapore

Tax-resident status

Tax liability

At least 183 days in a year

Tax resident for that year

Income taxed at progressive resident rates

At least 183 days for a continuous period over two years

Tax resident for two years

Income taxed at progressive resident rates

At least 183 days for a continuous period over three years

Tax resident for three years

Income taxed at progressive resident rates

As the tax resident, you are required to pay taxes from the following sources of income:

  • All income earned in Singapore;
  • Personal income after deduction of tax exemptions will be taxed at progressive resident rates (whichever results in a higher tax amount); and
  • Income derived from abroad (except for those received through partners in Singapore) brought into Singapore after January 1, 2004, is exempt from tax.

Filling out Form B1 (An income tax return for tax resident) to pay personal income tax.

A non-resident of Singapore for tax purposes

Period of stay (inclusive of work) in Singapore

Tax-resident status

Tax liability

From 62 to 182 days 

No

Income taxed at 15% or progressive resident rates. You are not entitled to tax reliefs. 

Less than 60 days

No

Your short-term employment income is exempt from tax. However, if you are a director of a company or a public entertainer, your income is not exempted from tax. You are not entitled to tax reliefs.

As the non-resident, you are required to pay taxes according to the following income:

  • Total income earned from Singapore;
  • Do not receive tax exemptions;
  • A flat rate of 15% or the progressive resident rates (whichever results in a higher tax amount);
  • Director’s fees or other income like renting or earning from Singapore will be taxed at the rate of 22%; and

Filling in Form M (An income tax return for non-resident of tax purposes in Singapore).

For more information, contact us to get a free consultation!

Five simple steps to incorporate a company in Singapore

Foreign entrepreneurs who have the ambition to enlarge the market or start a business in Asia, particularly in South East Asia, usually choose to register a company in Singapore. One of the most important reasons making Singapore is popular to foreign entrepreneurs is the ease of doing business, according to the World Bank.

In general, it is only five steps to incorporate a company in Singapore. The process may be completed within two working days, and the minimum paid-up capital is only S$1.

Step 1: Determine the business entities

As known, there are many different types of business entities in Singapore including sole proprietorship, limited liability partnership, private limited company, etc. Hence, it is important to choose a business entity form before setting up a company in Singapore.

Compared to other types of business entities, a private limited company is a popular choice for both local and foreign businesses to incorporate. This type of entity limits the liability of shareholders to their contributed share capital. Especially, the company is also entitled to income tax incentives for the first three years of registration, which is the biggest benefit of this business entity type. Also, it creates a professional image and enhances the potential to attract investors.

Step 2: Choose, check and register a name for the company

With any company, naming is always considered carefully to ensure its suitability for the business, the company’s long-term strategy and the image showing to clients and partners.

Please note that ACRA may decline registration of names because for variety reasons. The same name as the pre-registered business is a common reason or the name contains sensitive words or banned by the government, etc.

Thus, you should prepare a list of potential company names including three different names, then ACE Global Accountant will assist you to check whether they are available.

Step 3: Prepare necessary documents

The business must fulfil the following requirements to register a company in Singapore:

  • ACRA approved company name
  • A brief description of the business activity to register the nearest code with ACRA
  • For a corporate shareholder, it is required to provide a certificate of incorporation (COI) and Memorandum and Articles of Association.
  • For individuals who are foreigners, it is required to provide a valid passport and proof of address.

Step 4: Submit the application incorporation with ACRA

After completing the above three steps, all the application files for setting up the company will be submitted to ACRA, then the registration process will be conducted. In most cases, ACRA will approve the registration form on the same working day if there are no other necessary documents required.

Step 5: Issue a certificate of incorporation (Biz Profile)

Once the company registration form has been confirmed, ACRA will send a notification via email including a company registration number (UEN) and certificate of incorporation (COI) under an electronic version. Kindly note that ACRA will not provide a hardcopy of the certificate of incorporation because the electronic version is legally used in Singapore.

Find out more information about A Certificate of incorporation in Singapore

Things you need to do after incorporation 

Publish required information

You should ensure that the following items are fully implemented after your company is registered successfully:

  • Publish the certification of incorporation with all shareholders
  • Publish the register which shows the shares of each shareholder

Open a corporate bank account in Singapore

A bank account is a basic requirement for any business in dealing with local and foreign partners and clients. As one of the leading international financial centers in Asia, Singapore has a morden and stable banking system.

To open a bank account, it is complusory for a bank authorised and cheque signatory to phycially present in a bank in Singapore. With some strict international laws such as FATCA, AML and CFT guidelines, some banks will impose strict conditions so you need to have well-prepared to increase successfully ability.

Most banks require you to provide the following documents:

  • An application form for opening a bank account
  • Valid documents of your Singapore company such as Biz Profile and Memorandum and Articles of Association
  • A copy of valid passport of director(s)/ shareholder(s)/bank authorised
  • Proof of address of director(s)/ shareholder(s)/ bank authorised
  • Cheque deposit

Apply for a business license (If any)

You will be required to apply for a license to carry out your business if your company trades in certain types of business activities such as food, education, financial services, tourism, etc. Applying for a business license will be submited by the relevant government agencies.

Prepare and fill annual reports to ARCA and IRAS

Registered companies in Singapore are required to submit annual financial statements according to Singapore’s Financial Reporting Standards. Annual filling requirements are applied to incorporated companies in Singapore including financial statements, estimated chargeable income (ECI), annual general meeting (AGM), annual return (AR), annual tax return. Here is more about A Singapore company – Annual Fillings.

Taxable and Non-Taxable Dividends in Singapore

Profits made from a company in Singapore is distributed to its shareholders, which is called dividend. Dividends are accrued in the year which they will be declared payable. Each shareholder receives dividends based on their share, and these dividends may be paid out to the shareholders either in cash or kind. From 1 January 2008 onwards, Singapore has a one-tiger tax system so shareholders are exempted from tax on dividends which are paid by a Singapore resident company. Here’s all the information you need to know about non-taxable and taxable dividends in Singapore.

Non-Taxable dividends in Singapore

In general, dividends in Singapore which are not subjected to income tax listed belows:

  • Any dividends paid by a Singapore resident company either on or after 1 Jan 2008 under the one-tier corporate tax system except co-operatives;
  • Foreign dividends which are received in Singapore paid by resident individuals either on or after 1 Jan 2004. These dividends may be exempt from Singapore tax if an individual resident in Singapore receives foreign-sourced dividends through a partnership in Singapore, and these dividends are met some certain conditions. For more detail, please find out at Tax Exemption for Foreign-Sourced Income;
  • Income received through Real Estate Investment Trusts (REITs) distribution but except distributions derived by individuals through a partnership in Singapore, or through trade, business or profession in REITs.

Taxable dividends in Singapore

The following dividends are considered taxble in Singapore as follows:

  • Any dividends paid by co-operatives;
  • Income is derived from foreign-sourced through a partnership in Singapore. Some certain conditions may apply;
  • Income which has been made from Real Estate Investment Trusts (REITs) derived by individuals through a partnership in Singapore, or through trade, business or profession in REITs.

Source: Inland Revenue Authority of Singapore