Singapore

General Overview Singapore corporate tax rate is one of the lowest in the Asia Pacific Region. With effect from Year of Assessment 2010 (Basic period ending 2009), the Singapore corporate tax rate will be 17% (prior to YA2010, it was 18%). Singapore tax system is territorial in nature. I.e. Income tax is levied on the net income of companies from sources within Singapore and on foreign source income if remitted into Singapore. Non-resident Singapore companies and businesses are taxed on the same basis. When deriving chargeable income, expenses incurred wholly and exclusively for the generation of the income are deductible against the incomes. Generally, an expense will not be deductible if it is: prohibited under the Income Tax Act; capital in nature; or a contingent liability. There is no capital gain tax in Singapore. With effect from 2002, Singapore has implemented a one-tier corporate tax system. Under this system, the […]

The establishment of a branch office or a subsidiary company in Singapore are two common options available for foreign companies wishing to establish a business presence here. A Singapore branch office is considered an extension of the foreign company and is not a separate legal entity of its own. This means that the foreign company is responsible for the liability of its Singapore branch office. Additionally, the foreign company can also be sued in Singapore in the case of any dispute. A branch office is also subject to certain compliance requirements, such as the preparation of financial statements and hiring auditors in Singapore to audit its financial statements. In accordance with the Companies Act, the audited financial statements of both the branch and the foreign company must be filed with ACRA. In the case of a local limited liability company, when the company satisfies certain criteria, it can be exempted […]

Both local and foreign companies (an incorporated subsidiary or registered branch) in Singapore are subject to annual filing requirements from Inland Revenue Authority of Singapore (IRAS) and Accounting and Corporate Regulatory Authority of Singapore (ACRA).   ACRA Annual Filing Requirements Each private limited Singapore company must file an annual return with ACRA signed by a director or secretary within one month of its annual general meeting (AGM). The AGM must be held within 18 months from the date of incorporation; subsequent AGMs must be held every calendar year, with interval between each AGM not exceeding 15 months. The directors must table the company’s financial accounts in compliance with Singapore’s Financial Reporting Standards (FRS) framework. Financial accounts consist of Profit and Loss Account and Balance Sheet.   Annual Return is separate from a company’s financial accounts. It includes key information about the company’s legal status such as information about directors, secretary, […]

State and Mandatory Benefits The mandatory Central Provident Fund (CPF) provides a lump sum benefit on death, incapacity, emigration, or at age 55, plus a range of other benefits including house purchase and private medical care. On retirement, a minimum amount of SGD 99,600 (2008) must be used to provide an income (increasing to SGD 120,000 by 2013). The state also provides medical care for residents. Typical New Private Plan Employers can make additional voluntary contributions to the CPF or to an approved savings plan. Employers and employees can also make additional voluntary contributions to a Supplementary Retirement Scheme (SRS), up to a maximum of 11,476 SGD a year. Employers typically provide lump sum death benefits of two to three times earnings, personal accident benefits, disability pensions and private medical insurance. Different levels of benefit may be provided for different categories of employees. Typical Costs Contributions to the Central Provident […]

A company is a business entity registered under the Singapore Companies Act, Chapter 50. Unlike a business firm such as a sole proprietorship or partnership, it has a legal personality i.e. it has rights to own properties, can sue or be sued. It usually has the words ‘Pte Ltd’ or ‘Ltd’ as part of its name. In many European or the USA, it is commonly known as a Corporation. 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 receive dividends which are tax free under the Singapore new one tier tax system and directors pay income tax as employee’s officers on any remuneration paid. One of the major advantages of a limited company is that the shareholders are not liable for the company’s debts beyond the amount […]

Unless otherwise indicated, the Singapore company mentioned anywhere in this article refers to a private company limited by shares incorporated in accordance with the Singapore Companies Act. Summary Share transfer refers to the act where a person sells or gives his shares in a company to another person. If a person sells all his shareholding, he will not be the shareholder any longer and the buyer will become the shareholder of that company after the transfer. Shareholders of a Singapore company are free to transfer shares with other shareholders subject to any restrictions by the company constitution. Furthermore, company directors will have the right to refuse the transfer of shares from one shareholder to another. The reason for refusal must be for the wellbeing of the company. The share transfer generally involves directors’ resolution, the transferor (seller) and transferee (buyer), execution of the ACRA transfer of shares form. It also […]