INCORPORATION
AUDIT
TAXATION & GOODS & SERVICES TAX (GST)
CENTRAL PROVIDENT FUND (CPF)
EMPLOYMENT IN SINGAPORE
OTHERS
A
business firm is either a sole-proprietorship or a partnership. Individuals and
companies, being "legal persons", may set up and own a business firm. However, a
business firm, not being a legal entity, cannot register another business firm.
A foreign company also cannot register a business firm unless it has registered
itself under the Companies Act.
A business can be run by one person (a
sole-proprietorship) or by two or more people together (a partnership).
A
sole-proprietorship is a business firm owned by one person or one locally
incorporated company. There are no partners. The sole-proprietor has absolute
say in the running of the business firm.
A partnership is made up of more than one person or company. Generally, all
partners have equal rights in the management of the partnership. To avoid
possible disputes, it is preferable that a partnership agreement is drawn up.
Partnerships may have between two and twenty partners. Once there are more than
twenty partners, the business entity must be registered as a company under the
Companies Act, Cap. 50.
What is a company?
A company is an entity which is recognised legally as separate
from the persons who formed it or are shareholders in the company.
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A foreign company is one that is incorporated outside Singapore.
It has to register a branch in Singapore under the Companies Act before it can
commence business here.
How is
a company different from a business?
A business is not distinct and separate from the
people who run it.
A company has limited liability and the
shareholders may not be held responsible for the debts and liabilities incurred
by the company.
If you own a business or are part of a
partnership, you are personally responsible for the debts and liabilities and
your personal assets can be taken by creditors towards payment of these debts.
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With effect from 1 April
2004, a company can have one director who must be “ordinarily resident in
Singapore” i.e. a Singapore Citizen, a Singapore Permanent Resident, a person
who has been issued an Employment Pass/Approval-In-Principle letter/Dependant’s
Pass. Any person above the age of 21 years may be appointed as a director.
However, some individuals e.g. bankrupts, are disqualified from being directors.
A foreigner who wishes to act as a local director of a company can apply for an
Employment Pass/Approval-In-Principle letter from the Employment Pass Department
of the Ministry of Manpower (MOM).
What are
the qualifications for a company secretary & duties of a company secretary?
Every
company must have at least one secretary appointed within 6 months from the date
of incorporation. However, a private company, other than that required under
Section 171(1AB) of the Companies Act, need not appoint a professionally
qualified company secretary.
The company secretary of a public company or private company appointed under
Section 171(1AB) of the Companies Act must possess at least one of the following
qualifications:
• Has been a secretary of a company for at least 3 of the 5 years immediately
preceding the date of his appointment as secretary of the company.
• Is a qualified person under the Legal Profession Act (Cap. 161)
• Is an accountant registered with the Institute of Certified Public Accountants
of Singapore
• Is a member of the Singapore Association of the Institute of Chartered
Secretaries and Administrators
• Is a member of the Association of International Accountants (Singapore Branch)
• Is a member of the Institute of Company Accountants, Singapore
• Is, by virtue of certain prescribed academic or professional qualifications,
capable of carrying out the functions of a secretary.
Duties of a Company
Secretary under Singapore Companies Act:
(a)
To maintain
and update the following statutory records of the Company:
·
Register of
Members
·
Register of
Directors, Secretaries, Managers and Auditors
·
Register of
Charges over the Company’s assets
·
Register of
Directors’ Shareholdings
·
Minute Books
of the proceedings of general and board meetings
(b)
To prepare
board resolutions and minutes of directors’ and shareholdings’ meetings
(c)
To conduct
annual general meeting
(d)
To prepare
annual return and to lodge annual return with the Accounting and Corporate
Regulatory Authority (ACRA)
(e)
To prepare
minutes/resolutions and to lodge relevant returns with ACRA, where necessary, in
connection with the following:
·
Allotment of
shares
·
Share
transfers
·
Changes in
the officers (directors/secretary/manager) of the Company
·
Change in
registered office
·
Changes in
the Memorandum and Articles of Association
·
Opening of
bank accounts
·
Change of
bank signatories
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What is
the procedure for incorporation of a local company?
You
will have to obtain approval for the company name before you can incorporate a
company.
An application fee is payable for each approved company name. An approved
company name will be reserved for 60 days.
After the company name is approved, a registration fee is payable for a company limited by share
regardless of the amount of its authorised share capital.
The processing time of name application is on a
case-by-case basis. The minimum processing time is 2 hours while some require 14
days or more. Generally, the whole process of
incorporation will be done within 1 working day.
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What is
the procedure for registration of a branch of a foreign company?
The Companies
Act requires a foreign company to appoint 2 local agents in Singapore to act on
behalf of the company. The agents must be ordinarily resident in Singapore i.e.
Singapore Citizen, Singapore Permanent Resident, a person who has been issued an
Employment Pass/Approval-In-Principle letter/Dependant’s Pass. A foreigner who
wishes to act as a local agent of a foreign company can apply for an Employment
Pass or obtain an Approval-In-Principle letter from the Employment Pass
Department of the Ministry of Manpower (MOM).
You will have to obtain approval for the company name before you can register a
foreign company. An application fee is payable for each approved company name.
After the name is approved, a
registration fee is payable for registration.
The processing time of name
application is on a case-by-case basis. The minimum processing time is 2 hours
while some require 14 days or more. Generally, the
whole process of incorporation will be done within 1 working day.
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What is an
exempt private company?
It is a private company:
-
which
has not more than 20 shareholders and none of them is a corporation; or
-
that is
wholly owned by the Government, which the Minister, in the national interest,
declares by notification in the Gazette to be an exempt private company.
Such a
company can choose to file a Certificate of an Exempt Private Company instead of
its accounts at the time of filing its annual return.
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What is Goods and Services Tax? Will my
company be required to charge GST?
GST is a tax on the supply of
goods and services made in Singapore by a taxable person in the course or
furtherance of any business carried on by him; and on the importation of goods
into Singapore.
In general, goods sold or
services performed in Singapore are taxable. The only exceptions are financial
services or the sale or lease of residential properties which are exempt
supplies.
GST is charged and accounted at a rate of 4%* on the value of supply. For
instance, if you, a GST registered person, sell a watch in Singapore for $100,
you will have to charge a GST of $4 to your customer. The $4 will go to the
government as tax. Only a GST registered person can charge GST on the sale of
goods or provision of services. For imports, GST is collected by the Customs and
Excise Department at the point of importation into Singapore.
A person is required to register
for GST if his annual taxable turnover had exceeded or is expected to exceed S$1
million.
* GST Rate will be changed
from 4% to 5% with effect from 1 Jan 2004
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What
is Singapore tax regime?
Under Singapore tax laws, tax is
chargeable on the income of any person (including a company) accruing in or
derived from Singapore or received in Singapore from outside Singapore. A
company means any company incorporated or registered under any law in force in
Singapore or elsewhere.
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What is Singapore Corporate Tax
rate?
A company is taxed at a
flat rate on its chargeable income of 20%.
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What are the tax rates
for resident individuals?
The tax rates for resident individuals are
between 0% - 22%.
| |
Chargeable
Income ($)
|
Rate (%)
|
Gross Tax
Payable ($)
|
On the first
On the next
|
20 000
10 000
|
0
4
|
0.00
400.00
|
On the first
On the next
|
30 000
10 000
|
6
|
400.00
600.00
|
On the first
On the next
|
40 000
40 000
|
9
|
1 000.00
3 600.00
|
On the first
On the next
|
80 000
80 000
|
15
|
4 600.00
12 000.00
|
On the first
On the next
|
160 000
160 000
|
19
|
16 600.00
30 400.00
|
On the first
Above |
320 000
320 000
|
22
|
47 000.00
|
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What are tax rates
for non-resident individuals?
For employment Income: 15% or resident
rates, whichever gives rise to higher tax. However, short-term employment income
(i.e. 60 days or less) is exempt from tax*
*This rule does not apply if you are a director,
public entertainer or exercising a profession in Singapore.
For Director fees, Consultation fees & all other
income: 22% - with effect from YA 2003.
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What is Central Provident Fund
(CPF)?
The Central
Provident Fund (CPF) is a comprehensive social security savings plan which has
provided many working Singaporeans with a sense of security and confidence in
their old age.
Generally, Employer's CPF contribution rate is
13% and Employee's CPF contribution rate is 20% of his / her total gross salary.
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What are Work Passes available for foreign talents working in Singapore?
Foreign professionals, managers, executives, specialists or entrepreneurs who
wish to work in Singapore should apply for one of the following Employment
Passes:
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What is audit
exemption and what are the criteria?
-
All exempt private companies (EPCs)1
with annual revenue of $5 million and below will now be granted statutory
audit exemption for financial periods starting on or after 1 June 2004.
This means that EPCs with annual revenue of $5 million and below will no
longer be required by law to have their accounts audited, for financial
periods starting on or after 1 June 2004. The previous threshold for
statutory audit exemption was set at $2.5 million of annual revenue.
- The increase in the threshold will help more EPCs to
lower the business costs. These companies can now decide based on their
business requirements whether it is necessary to carry out audits on their
financial statements. The law continues to require all companies to
maintain proper accounting records and prepare "true and fair" financial
statements that comply with prescribed accounting standards.
- The increase in annual revenue threshold from $2.5
million to $5 million for the audit exemption for EPCs marks the second
phase of the implementation of the recommendation by the private sector -
led committee, the Company Legislation and Regulatory Framework Committee
(CLRFC)2 in relation to the removal of statutory audit
requirement for EPCs. The CLRFC submitted its final report to the
government in October 2002 with a set of 77 recommendations. The
government accepted all its recommendations.
- The increase in the threshold is also in keeping with
what was announced in 2003 at the Second Reading of the Companies
(Amendment) Bill 2003 on 24 April 2003. At the Second Reading, Deputy
Prime Minister and Minister for Finance Lee Hsien Loong announced that the
removal of the statutory audit requirement would be done in two phases in
order to give the business community and audit firms some time to adjust
to the new arrangement, i.e. to set the revenue threshold at $2.5 million
when the Amendment Bill became operational and to raise it to $5 million
one year later.
1 An exempt private
company is a private company with no corporate shareholders and not more
than 20 shareholders.
2 The CLRFC, chaired by
Dr Philip Pillai, Senior Partner of Shook Lin & Bok, was a private sector
led committee set up in December 1999 to review company law and securities
regulation. |
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What is employment pass?
| ELIGIBILITY CRITERIA |
| |
P Pass
For foreigners who hold acceptable degrees,
professional qualifications or specialist skills and are seeking
professional, administrative, executive or managerial jobs.
A P1 Pass will be issued if the applicant's basic monthly salary is more
than S$7,000.
A P2 Pass will be issued if the applicant's basic monthly salary is more
than S$3,500 and up to S$7,000.Q1 Pass
For foreigners whose basic monthly salary is more
than S$2,500 and who possess acceptable degrees, professional qualifications
or specialist skills.
S Pass
(S Pass is a new category of work pass which
replaces the Q2 Pass with effect from 1 July 2004)
For foreigners whose basic monthly salary is at least
S$1,800. Applicants for S Pass will be assessed on a points system, taking
into account multiple criteria including salary, education qualifications,
skills, job type and work experience. A monthly levy of S$50 per month will
apply and there will be a 5% cap on the number of S Pass holders in each
company based on the company's number of local workers and work permit
holders.
|
| PROCESSING TIME |
| |
The processing time for Employment Pass application /
renewal is about two weeks from the date of receipt of the
application. For S Pass applications, processing time takes about
three weeks as the system is new. During peak periods or where the
case requires inputs of vetting agencies, the processing time for passes may
take longer. The outcome will be mailed to the employer. |
| APPROVAL |
| |
The approval letter for an Employment Pass is valid for
six months from the date of the letter. The successful applicant is allowed
temporary employment for one month from the date of the letter
pending collection of the Employment Pass. For S
Pass, the in-principle approval letter is valid for three months from the
date of the letter. Please note that successful S Pass applicants are not
allowed temporary employment before the pass is issued as levy must be
charged when the applicant starts working.
Validity Period
A first-time applicant may be granted Employment / S Pass of up to two
years. The Employment / S Pass may be renewed for a period up to three
years. |
|
| |
APPEAL
When your application is rejected, you may make an
appeal by submitting a completed Appeal Form. Depending on the complexity of
the case, the processing time for reviewing your appeal may take a longer
time. You will be notified of the outcome of your appeal in writing. |
|
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What is entreprenuer pass?
| ELIGIBILITY CRITERIA |
| |
A foreigner who is an entrepreneur ready to start a new
company / business and will be actively involved in the operation of the
company / business in Singapore can apply for an Employment Pass under the
EntrePass scheme. A foreigner who is already an
existing shareholder / partner in a Singapore registered company / business
but is not actively involved in the operation of the company / business may
also apply for an Employment Pass under the EntrePass Scheme if he / she
wishes to be actively involved in the operation of the company / business.
EntrePass Requirements
|
Application Type |
Requirements |
New Applications
(valid for up to two years) |
- The applicant must submit a comprehensive business
plan. A credible business plan is one which comprises key indicators
such as growth potential of the business and availability of funding;
and
- The proposed business venture must not be engaged
in objectionable activities1.
|
First-Time
Renewals
(valid for up to three years) |
- Business is in commercial operations2
and / or company has secured third party funding;
- Business venture conducting business based on
original business plan3; and
- Business venture must not be engaged in
objectionable activities.
|
Subsequent
Renewals
(valid for up to three years) |
Company to
fulfil all the following conditions:
|
1
Objectionable activities refer to activities which are in violation of the
law or against public interest. Examples of objectionable activities include
gambling, prostitution, social escort services and illegal money lending.
2 Commercial operations must be certified through audited
accounts from registered public accountants. This can be further
substantiated by the following submissions:
(a) Proof of
Employment Creation; and / or
(b) Paid-Up Capital submission.
3
An entrepreneur will be required to notify the Work Pass Division if there
is a change in the nature of his business during the validity period of his
pass. |
|
| PROCESSING TIME |
| |
The process of assessing EntrePass applications require
additional assessments, inputs from economic agencies and time, so as to
allow a fair review of all applications. In view of the added complexity as
compared to normal Employment Pass application, the processing of EntrePass
applications may take longer than two weeks from the date of receipt of the
application. The outcome will be sent to the applicant's
correspondence address in Singapore as indicated in the application form. |
|
| APPLICATION |
| |
Documents Required
- A copy of EntrePass application form duly completed
for each applicant. If the company / business has yet to be registered,
the proposed name and address are to be stated in the application form.
The EntrePass application must be sponsored by a well-established
Singapore-registered company or a banker's guarantee of S$3,000 to be
furnished by the applicant if the application is approved. The banker's
guarantee has to be furnished when the successful applicant collects the
pass. If the application is sponsored by a Singapore-registered company,
the form must be signed by both the applicant and an authorised officer
from the sponsoring company. The form should also be endorsed with the
company's stamp / seal;
(Note: The form must be completed legibly and
in black ink. Otherwise the processing of the application may be
delayed)
- A copy each of the applicant's past employment
testimonials (Translated into English if they are in other
languages);
- Companies / businesses registered with the Accounting
and Corporate Regulatory Authority (ACRA) must produce a copy of the
company's latest Business Profile / Instant Information;
- A comprehensive business plan detailing the
following:
- Nature of business;
- Products / services to be offered;
- Business objective;
- Application of innovation and / or technology to be
used;
- Application of products / services / target markets /
market assessment;
- New capabilities / competencies / intellectual
property to be developed;
- Marketing strategies; and
- Development plans and milestones etc.
- A recent passport-sized photograph of the applicant
taken within the last three months;
- A copy of the travel document page showing the
applicant's personal particulars;
- An applicant who declares his place of birth as
Singapore is required to complete a Personal Particulars Form and furnish
relevant documents stipulated in the Personal Particulars Form when
submitting the EntrePass application;
- For married applicants, please submit a copy of
the official marriage certificate if the spouse is a Singapore Citizen,
Singapore Permanent Resident or an Employment Pass holder; and
- The applicant may also apply for Dependant's Passes for
his / her spouse and unmarried children below 21 years of age if they are
foreigners. The Dependant's Pass application must be sponsored by a
well-established Singapore-registered company or a banker's guarantee of
S$3,000 to be furnished for each applicant if the application is
approved. The banker's gurantee has to be furnished when the successful
applicant collects the pass. If the application is sponsored by a
Singapore-registered company, the form must be signed by both the
applicant and an authorised officer from the sponsoring company. The form
should also be endorsed with the company's stamp / seal. For children
below 12 years old, one of the parents is required to sign on their
behalf.
Dependant's Pass application (Form 12) should be submitted
together with the Employment Pass application to facilitate processing of
the applications.
Procedures
A successful applicant will be issued with an
Approval-In-Principle letter to enable him / her to register the company /
business at the Accounting and Corporate Regulatory Authority.
Upon receipt of the company's Business Profile / Instant
Information from the Accounting and Corporate Regulatory Authority, the
applicant needs to send / fax a copy of the company's Business Profile /
Instant Information and the Approval-In-Principle letter to the Work Pass
Division for the processing of his / her Employment Pass.
For a successful applicant who is already an existing
shareholder / partner of a registered company / business, an In-Principle
Approval letter will be issued for the collection of his / her Employment
Pass.
Note:
The grant of the Employment Pass (EntrePass
Scheme) by the Work Pass Division does not guarantee that the application
for the registration of a company / business will be approved by the
Accounting and Corporate Regulatory Authority. Such applications will be
processed based on the Registry’s criteria.
The applicant is required to produce the
Approval-In-Principle letter (if granted) to the Accounting and Corporate
Regulatory Authority together with the documents for registration of
a company / business in order for the application to be considered. |
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What is the minimum Authorised Share Capital for a Private Limited?
Any amount. With effect from 15 Jan 2002,
the registration fees for a company is at a flat fee of $300 irrespective of the
amount of authorised share capital.
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What is the difference between Authorised Share Capital and Paid Up Capital?
Paid Up Capital is the amount invested by
the shareholders into the Company. This total amount has to be equal to or less
than the Authorised Share Capital.
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Paid Up Capital is the amount invested by
the shareholders into the Company. This total amount has to be equal to or less
than the Authorised Share Capital.
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About accommodation
|
Moving Into A New Home |
 |
|
For those who plan to stay in Singapore for a while, finding
their own place is a top priority. Singapore offers a host of accommodation
options, both for short term and long term needs, and apartment hunting can
be quite fun. Those with families might prefer to rent a service apartment
in the downtown area.
Short-term
housing
Hotels
A list of hotels categorised by location and price range is available from
the
Singapore Tourism Board's New Asia-Singapore listings. The directory
also includes hostels and bed & breakfast lodges for the budget-conscious.
Bookings may be made online.
Service apartments
Service apartments in the prime areas of Orchard and Newton Roads charge
between S$700 and S$1,900 a week, with two-bedroom apartments going for
S$1,300 to S$2,100.
These are usually fully furnished and provide basic home
conveniences such as cooking appliances, laundry and maid services. Special
corporate, family and long-term lease rates may be negotiated.
Long-term
housing
Housing and
Development Board flats
Most Singaporeans live in apartments built by the Housing and Development
Board (HDB). These government-subsidised flats are located in housing
estates all over the island.
Each HDB estate is designed to be a self-contained neighbourhood; served by
supermarkets, food centres, clinics, schools, libraries, shopping malls and
playgrounds.
Private housing
If you prefer private housing you may take your pick of private apartments,
condominium units or houses. The classified advertisements of The Straits
Times is a good place to start or approach a housing agent for the rental
and purchase rates of private property. |
