Viewpoints

2019-10-16

Singapore Company – Shares and Share Capital

1. OVERVIEW Every company limited by shares incorporated in Singapore must have a share capital. Share capital of a company refers to the amount invested in the company for it to carry out its operations. The share capital may be altered or increased, subject to certain conditions. A company’s share capital may be divided into different classes. The different classes of share capital and the rights attached to these classes may be provided for in a company’s memorandum or articles of association. The Companies Act (Cap 50) sets out specific provisions and obligations for a company in relation to the shares and share capital of the company.   2. NATURE OF SHARES 2.1 A share is the interest of a member in a company. A member does not own any of the company’s assets as the company is a separate legal personality. A members ownership of shares in a company […]
2019-10-08

Singapore Central Provident Fund (CPF) Contribution Rates Allocation of CPF Contributions

The CPF contributions are allocated to the Ordinary, Special and Medisave Accounts based on the ratio of contributions shown in Tables A to J. Contributions are first allocated to the Medisave Account, followed by the Special Account. The balance is then allocated to the Ordinary Account. Employee Age (years) CPF contribution Ordinary Account Special Account Medisave Account 35 & below $100 $66.67 ($100 – $18.84 – $14.49) $14.49 ($100 x 0.1449) $18.84 ($100 x 0.1884) TABLE A For (1) Private Sector Employees (2) Government Non-Pensionable Employees (3) Non-Pensionable Employees in Statutory Bodies & Aided Schools (4) Singapore Permanent Resident (SPR) employees from their 3rd year onwards Employee Age (years) Contribution by Employer (% of wage) Contribution by Employee (% of wage) Total Contribution (% of wage) Credited Into Ordinary Account (Ratio of Con) Special Account (Ratio of Con) Medisave Account (Ratio of Con) 35 & below 14.5 20 34.5 0.6667 […]
2019-10-08

Requirements for Registers of Registrable Controllers of Singapore Company

Overview The Singapore Companies Act (Cap. 50) (“Companies Act”) has been amended to introduce register of registrable controllers (“RRC”) of companies under the new Part XIA which came into effect on 31 March 2017. These amendments are accompanied by a new set of subsidiary legislation – the Companies (Register of Controllers and Nominee Directors) Regulations 2017 which also took effect on 31 March 2017. The RRC makes the ownership and control of corporate entities more transparent and reduces opportunities for the misuse of corporate entities for illicit purposes. This will bring Singapore in line with international standards, and boost Singapore’s on-going efforts to maintain a strong reputation as a trusted and clean financial hub. Unless exempted, all Singapore locally registered companies are required to take reasonable steps to identify the persons who have significant control over the company and maintain beneficial ownership information in the form of a RRC. The […]
2019-10-08

Representative Office in Singapore

A foreign company may establish a representative office in Singapore to undertake promotional and liaison activities on behalf of its parent company. The office, however, directly or on behalf of its parent company, must not be engaged in business, conclude contracts, provide consultancy for a fee, undertake transshipment of goods, or open or negotiate any letters of credit. Foreign companies keen on exploring the viability of doing business in Singapore or interested in using Singapore as a launching pad into the Asia Pacific, may wish to set up a Representative Office (RO). Registration of a RO should be considered when a foreign company wants to test the business environment in Singapore before making investment decisions. However foreign companies should be aware that incorporation of legal corporate entities with the ACRA (Registrar of Companies) will be necessary to maintain their operations in Singapore in the long term.
2019-10-08

Register of Registrable Controllers of Singapore Companies and LLPs

With effect from 31 March 2017, companies, foreign companies and LLPs (unless exempted) will be required to maintain beneficial ownership information in the form of a register of registrable controllers, and to make the information available to public agencies upon request. Setting up Newly incorporated companies and newly registered LLPs are required to keep register of registrable controllers within 30 days from date of incorporation. Existing companies and LLPs are required to keep register of controllers within 60 days from date of commencement of the regime (31 Mar 2017). Companies which are not required to keep registers of controllers at the date of commencement (31 Mar 2017) but is subsequently required to do so, are required to keep the registers within 60 days.   Maintaining Companies are required to enter information into their registers of registrable controllers within the prescribed timeline after the information has been received. The prescribed timeline […]
2019-10-08

Memorandum on setting up business in Singapore

1. General There is no restriction on foreign ownership and there is no exchange control. 2. Business Entities Persons who are interested to carry on business in Singapore must register an entity, and the entities may be any of the following:- A sole-proprietorship and partnership A Limited liability partnership A company incorporated in Singapore A branch of foreign companies  Representative Office (1) Sole-proprietor and partnership All sole-proprietor or partnerships are registered under the Business Registration Act, Cap 32. A sole proprietorship only require 1 member whereas a partnership can take 2-20 members. The advantages of such businesses are that they are easy to form, maintain and dissolve. No annual return is required to be submitted to the Accounting and Corporate Regulatory Authority (ACRA) and the accounts are not subjected to audit. However, registrations have to be renewed annually. However, the disadvantage is that a sole proprietor is personally liable for […]
2019-10-08

Introduction to Singapore Withholding Tax

Withholding tax is a tax on payments made to non-residents including employees, business partners and overseas agents. Here is a quick overview of withholding tax and how it affects your business. A non-resident is liable to pay income tax on Singapore-sourced income. Under the law, a person has a legal obligation to withhold a percentage of the payment, when he makes payments of a specified nature under the Singapore Income Tax Act, to a non-resident. When you make payments of a specified nature to a non-resident, you must withhold a certain percentage of that payment as “withholding tax”. What Types Of Payments Are Subject To Withholding Tax?   Types of payment include: payment of commission fees to overseas agents payment of director’s fees to non-resident directors payment of professional fees to offshore accountants   Section 45, 45A, 45B & 45D Interest Royalties Management fees and service fees Rental from use […]
2019-10-08

Introduction to Registration of Branch Office in Singapore by a Foreign Company

General Characteristics of a Branch Office If a foreign corporation does not want to incorporate a company in Singapore, it must first be registered as a branch in order to carry on business under the corporate title of the foreign corporation. Legally a branch of a foreign company is only an extension of its Head Office and not a subsidiary company which is owned by the foreign parent company. The shareholders, structure of company and its activities are directed by foreign company’s Memorandum and Articles of Association (MAA). There is no separate MAA for the branch office. A branch is not a separate legal entity in that its debts and liabilities are part and parcel of the debts and liabilities of the head office of the foreign corporation and its activities are limited to those stipulated in the constitution of the head office. A claimant can approach the Singapore courts […]
2019-10-08

Introduction to Audit Exemption for Small Companies Incorporated in Singapore

Introduction In 2003, the Companies Act (the Act) was amended allowing exempt private companies to be exempted from audit. Exempt private companies whose accounting year commencing from 15 May 2003 and with an annual revenue of $2.5 million (S$5 million from 1 June 2004) or below, no audit need to be carried out as the company is eligible for audit exemption.   Exempted Private Company A company is deemed to be an exempt private company if: The shareholders do not exceed 20 All the shareholders are natural person and not corporations   Unaudited Financial Statements Companies are still required to maintain proper accounting records, prepare and present financial statements in compliance with the Act and the Singapore Financial Reporting Standards (FRS). In short you are required to prepare directors’ report, balance sheet, profit and loss account, statement of changes in equity, cash flow statement and notes to financial statements. Everything […]
2019-10-08

How to set up a Partnership Business in Singapore

General Characteristics A partnership is a legal relationship between two or more persons who carry on a business with the objective of making profit and sharing it between them. As a partnership is not an entity in law, it cannot sue or be sued in its own name and it cannot own property. Partners are personally liable for all debts and obligations and personal assets are at risks. A minimum of two owners to a maximum of 20 owners can be either natural persons, companies or natural persons and companies. While registration with ACRA must be renewed annually there is no need to audit accounts or file annual returns with ACRA.   Registration First, an application for approval and reservation of Partnership name has to be filed with the Registrar. Upon approval a partnership is required to be registered online via BizFile with ACRA through a professional business registration firm […]
;