Viewpoints from Kaizen

1. Introduction Although most businesses to be carried out in Singapore do not require licenses or permits other than the registration of a company or a firm with ACRA, there are a handful that do as they are regulated by the approving authorities. Some of these are private schools, travel agencies, liquor distributors, moneylenders, banks, childcare centers, importers/exporters, wholesalers and retailers of liquors. A business license is a permit issued by a Singapore government agency that allows you to conduct a specific type of business. In order to apply for a business license in Singapore, the company must be first registered with the registrar of companies. To find out how to register a private limited company in Singapore, please refer to our Singapore company registration guide. 2. Types of Business Licenses and Permits in Singapore (1) Business Activity Licenses & Permits Licenses and permits you need if you decide to […]

The Singapore Companies (Amendment) Act 2014 took effect on 1 July 2015. The most significant amendment is the introduction of the small company concept, which replaces the exempt private company for purposes of audit exemption. This article considers the features of this new regime and illustrates its application to existing as well as new companies. Small company The small company differs from the exempt private company in that it is defined by a broader set of criteria, reflecting the fact that audit is of value to a broader group of stakeholders (e.g. creditors, employees and customers) than shareholders. With the introduction of this new set of criteria, more companies will qualify for audit exemption, thus reducing compliance costs and creating a more business-friendly environment overall. Paragraph 2 of the Thirteenth Schedule of the amended Companies Act (Cap 50, 2006 Rev Ed) (hereafter the Thirteenth Schedule states that a company is […]

Q. What is a Company? A. A company is an incorporated entity and once registered under the Companies Act, Chapter 50, it has legal personality. It is different from a business firm and usually has the words ‘Pte Ltd’ (Private Limited) or ‘Ltd’ (Limited) as part of its name. A private limited company has its own legal identity, separate from its shareholders (who own the company) and its directors (who manage the company). Companies pay corporation tax on their profits; Shareholders received dividends which are tax free under the Singapore new one tier tax system. One of the major advantages of a limited company is that the shareholders are not liable for the company’s debts beyond the amount of share capital they have subscribed, provided there has been no deceit, fraud or malpractice. What are the different types of Companies? Private Limited/ Pte Ltd Companies This is a locally incorporated […]

Who is liable for Singapore Property Tax? Property tax is a tax on properties in Singapore. All types of properties including Govt. HDB flats, factories, offices and vacant land are subject to tax. If you or your business owns property, you must pay property tax. What are the property tax rates in Singapore? The amount of property tax you have to pay per year is a percentage of the Annual Value of the property. The Annual Value is the estimated yearly rent the property can fetch if it were rented out. The tax rate for owner-occupied residential property is 4% per year. The tax rate for all other properties is 10%. Tip: If you are using your residential home as an office, you pay 4% property tax if you (a) own the home and (b) live in the home. Are There Any Rebates, Relief’s or Refunds? To help keep taxes […]

A dormant company is one that does not carry on business and has no income for the whole of the financial period under review. Even if the company has incurred such costs as bank charges, secretarial fees, and other expenses in maintaining the office. A dormant company must submit its Income Tax Return (Form C-S/ C) unless it has been granted a waiver to file the Income Tax Return by the Inland Revenue Authority of Singapore (IRAS). 1. Obligation to File Income Tax Return (Form C-S/ C) A dormant company is one that does not carry on business and had no income for the whole of the basis period. For example, if a company did not carry on business and had no income for the whole of the basis period ending in year 2015, it will be regarded as a dormant company for Year of Assessment (YA) 2016. A dormant […]

DIRECTORS must comply with the common law and specifically with the Companies Act of Singapore. As most of the company’s powers are vested in the board of directors, they control its affairs and are thus answerable to the company’s shareholders collectively. Fiduciary Duties Directors have a fiduciary duty to their company. This means that they must be loyal to the company and must act honestly and in good faith when exercising their powers. Where a director has a personal interest that may conflict with his fiduciary duties to the company, he should make disclosure to the company and obtain the approval of the company. Statutory Books Every company shall keep a register of its members and the various statutory books at the company’s registered office or some other appropriate place where notice of the place has been lodged with the Accounting and Corporate Regulatory Authority (ACRA). In addition, minutes of […]

Two of the ways in which a foreign company may carry on business in Singapore are by registering a branch office and by incorporating a limited liability company in Singapore. We set out below a brief comparison of the major differences between a branch office and a subsidiary in Singapore.   Legal identities A branch office is a considered an extension of the parent company and is not considered a separate legal entity. Hence, its liabilities extend to the parent company, meaning the parent company can be sued in Singapore. A local subsidiary is a separate legal entity from the foreign company even if the latter may be its only shareholder and will maintain control over its board of directors. This means that the foreign company does not have to bear the losses and liabilities of the local subsidiary.   The branch office must also submit its own accounts, as […]

After a branch office is duly registered. the Singapore Accounting and Corporate Regulatory Authority (“ACRA”) must be kept informed of certain changes in the affairs of the parent company, the Singapore branch and the local agents. A list of such changes is appended hereunder for your reference. Please notify us of any such change as soon as possible in order that we may lodge the necessary forms with ACRA: General Changes  ACRA must be notified of any change or alteration made to: the charter, statutes, memorandum or articles of the parent company or other instrument lodged with the Registrar; the identities or particulars of the directors of the parent company; the identities or particulars of the local agent or agents (including any change of address, passport numbers, citizenship etc.); the situation, address or designation of situation or address of the registered office of the Singapore Branch or of the days […]

In general, a company’s taxable income is not the same as net income (accounting income). The calculation of taxable income for a company begins with net profit/loss in the company’s accounts and then making various adjustments to arrive at the chargeable income subjected to tax during the accounting period. Adjustments are made because some of the expenses incurred by your company may not be deductible for tax purposes. Similarly, some of the income received by your company may not be taxable or it may be taxed separately as a non-trade source income.   From net income to taxable income A Singapore company is taxed on its income accruing in or derived from Singapore and income received in Singapore from outside Singapore subject to applicable exemptions and tax reliefs. Income includes: gains or profits from any trade or business income from investment e.g. interest and rental royalties, premiums and any other […]

Stamp Duty for Sale of Property I’m referring to the IRAS website on Stamp Duty and you’re supposed to pay this tax if: You have purchased an HDB Flat You have purchased a completed property issued with Temporary Occupation Permit You have purchased a property under construction You have purchased a property by way of a sub-sale You have acquired properties an enbloc purchase   The Formula Quick Calculation Formula: Stamp Duty = Sale Price x 3% – SGD5,400 However, if the price of the property falls below SGD360,000, this would be inaccurate. Remember we also have to round up to the nearest hundred dollars before calculating. Example:  Peter bought a walk up apartment at the price of SGD500,000.00, his stamp duty fees will be [(SGD500,000 x 3%) – $5400] = SGD9,600 The real formula would be, 1% of the first SGD180,000, 2% of the next SGD180,000 and 3% of […]