DOING BUSINESS IN SINGAPORE - PWC

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DOING BUSINESS IN SINGAPORE - PWC
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Doing business in Singapore
DOING BUSINESS IN SINGAPORE - PWC
Contents
                                                  Disclaimer
Executive summary                             4
                                                  This document is issued by The
Foreword                                      6   Hongkong and Shanghai Banking
                                                  Corporation Limited (the ‘Bank’)
Introduction – Doing business in Singapore    8   in Singapore in partnership
                                                  with PricewaterhouseCoopers
Conducting business in Singapore             12   (PwC). It is not intended as an
                                                  offer or solicitation for business
                                                  to anyone in any jurisdiction.
Taxation in Singapore                        16
                                                  It is not intended for distribution
                                                  to anyone located in or
Audit and accountancy                        26
                                                  resident in jurisdictions which
                                                  restrict the distribution of this
Human Resources and Employment Law           27   document. It shall not be copied,
                                                  reproduced, transmitted or further
Trade                                        28   distributed by any recipient.

Banking in Singapore                         29   The information contained in this
                                                  document is of a general nature only.
HSBC in Singapore                            30   It is not meant to be comprehensive
                                                  and does not constitute financial,
Country overview                             32   legal, tax or other professional
                                                  advice. You should not act upon
Contacts                                     34   the information contained in this
                                                  publication without obtaining specific
                                                  professional advice. This document
                                                  is produced by the Bank together
                                                  with PricewaterhouseCoopers
                                                  (‘PwC’). Whilst every care has been
                                                  taken in preparing this document,
                                                  neither the Bank nor PwC makes
                                                  any guarantee, representation or
                                                  warranty (express or implied) as
                                                  to its accuracy or completeness,
                                                  and under no circumstances will
                                                  the Bank or PwC be liable for any
                                                  loss caused by reliance on any
                                                  opinion or statement made in this
                                                  document. Except as specifically
                                                  indicated, the expressions of opinion
                                                  are those of the Bank and/or PwC
                                                  only and are subject to change
                                                  without notice. This document
                                                  is not a ‘Financial Promotion’.

                                                  The materials contained in this
                                                  publication were assembled in
                                                  May 2012 and were based on the
                                                  law enforceable and information
                                                  available at that time.
DOING BUSINESS IN SINGAPORE - PWC
Executive summary
     For the sixth year running,           • Excellent infrastructure          • Skilled workforce and                 • Robust legal system                • Accounting standards
     Singapore is ranked top in the          Businesses can tap into             harmonious industrial relations         The legal and judicial system        The Singapore Financial
     world in terms of ease of doing         Singapore’s excellent               Singapore offers a highly-rated         here is robust and efficient          Reporting Standards are
     business (Doing Business 2012           shipping and air links,             human capital base, recognised          and Singapore is reputed             closely modelled after the
     Report, World Bank). Global             as well as its first-class           for its skills. There are virtually     for its tough stance against         International Financial Reporting
     businesses will benefit from             telecommunications and              no labour disputes as the trade         corruption. Singapore is rated       Standards. This consistency
     locating their headquarters             banking facilities to manage        unions work closely with the            top in Asia and second in the        facilitates comparison of
     and operations in Singapore             their global operations             government and business                 world for intellectual property      financial performance of
     (ranked the most competitive            from Singapore.                     sectors to ensure that the              rights protection in the Global      firms across territories and
     Asian country by the Global                                                 collective interests of business        Competitiveness Report               promotes transparency.
     Competitiveness Report                • Extensive trade links               and employees are met.                  2011-2012, World Economic
     2011-2012, World Economic               Investors can leverage on                                                   Forum. Thus, businesses            • Ease of doing business
     Forum). This is made possible           Singapore’s trade network         • Well-developed                          can count on Singapore’s             The procedures to set up a
     by the following competitive            with its 18 regional and            financial system                        rigorous enforcement of its          business are straightforward.
     factors which set Singapore             bilateral free trade agreements     Singapore, a country with a             strong intellectual property         Together with a set of
     apart from other locations:             with 24 trading partners            ‘AAA’ rating, is one of the top         laws to protect their ideas          streamlined reporting
                                             and the 39 investment               international financial centres.         and innovations.                     requirements, investors
    • Pro-business and                       guarantee agreements.               Its financial system is well-                                                 can expect minimal
      stable government                                                          regulated and offers a broad          • World-class living standard          compliance cost and
      Singapore offers political           • Competitive tax system              range of services. Businesses           Besides being one of the             bureaucracy in running
      stability that is vital to foreign     Singapore offers a very             can also tap into its developed         cleanest cities in the world,        a business in Singapore.
      investments. Government                competitive tax regime with         capital markets as an alternative       the city-state is safe and
      agencies, which have a                 its low tax rate and a wide         source of financing.                     orderly. Coupled with its world-
      pro-business attitude, work            range of tax incentives.                                                    class transport system and
      closely with the business sector       Businesses based here can                                                   healthcare services, Singapore
      to promote economic growth.            also benefit from its network                                                offers one of the best living
                                             of nearly 70 comprehensive                                                  environments in the world.
                                             double taxation agreements.

4
DOING BUSINESS IN SINGAPORE - PWC
Foreword
    The shift in the world’s             In Singapore, HSBC is              Mr Guy Harvey-Samuel,
    centre of economic gravity           focused on strengthening our       Group General Manager,
    from West to East plays              capabilities as an international   Chief Executive Officer,
    to Singapore’s competitive           hub for trade, financial markets    HSBC Singapore
    advantage, with its strategic        and wealth management.
    location at the crossroads of
    global trade and its growing         We have the global connectivity,
    appeal as an international           financial strength and the people
    hub for wealth management            to deliver for our customers
    and financial services.               and help them connect to the
                                         opportunities Singapore has to
    Its population of some 5.1 million   offer. Our role as the hub for
    is the world’s third wealthiest      HSBC Private Bank in South
    in terms of per capita GDP.          Asia is evidence of Singapore’s
    Singapore’s sustained GDP            increasing importance as a
    growth of 4.9% in 2011 was           wealth management centre.
    the result of continued success
    in attracting inward investment      We seek to be your trusted
    driven by its ease of doing          partner to help you and
    business and openness.               your business make the
                                         most of opportunities and
    HSBC shares many characteristics     fulfil your potential.
    with Singapore. We both make
    it our business to connect           We hope that this guidebook,
    companies and people to              Doing Business in Singapore,
    opportunities across the world.      produced in collaboration with
    We are equally determined            PricewaterhouseCoopers, will
    to set the highest standards         help you to discover Singapore
    in order to earn the trust of        and its potential to connect
    stakeholders and counterparties.     your business to the world.

6
DOING BUSINESS IN SINGAPORE - PWC
Introduction
    Doing business in Singapore

    Geography                           Singapore is widely
                                        acknowledged as being
    Singapore is situated at the tip    one of the best places to
    of the Malayan peninsula, at the    do business in the world,
    south-eastern end of the Straits    having won numerous
    of Malacca. Due to its strategic    accolades including:
    location, Singapore is often
    seen as a gateway to markets       – the world’s easiest place to
    in the South East Asian              do business (Doing Business
    countries, China and India.          Report 2012, World Bank);

    Economic environment               – best business environment
                                         in Asia Pacific and
    Singapore has one of the most        worldwide (Country
    open economies in the world.         Forecasts, December
    The government plays a critical      2011, Economist
    role in directing economic           Intelligence Unit); and
    policies as well as in promoting
    a pro-business and pro-foreign     – among the top three
    investment climate.                  in the world for having
                                         the best protection of
                                         intellectual property
                                         (Global Competitiveness
                                         Report 2011-2012, World
                                         Economic Forum).

8
DOING BUSINESS IN SINGAPORE - PWC
Sector (2011 % share of GDP)                                                                                                           Singapore’s top ten trading partners (2012)
                                                                                                                                             25                                                                                                                              N.B. The European
           Manufacturing 20.9%                                                                                                                                                                                                                                               Union (EU) comprises:
                                                                                                                                                                                                                                                                             Austria, Belgium,
                                                                                                                                             20
           Wholesale and Retail Trade 17.4%                                                                                                                                                                                                                                  Bulgaria, Cyprus,
                                                                                                                                                                                                                                                                             Czech Rep, Denmark,
                                                                                                                                                                                                                                                                             Estonia, Finland, France,
           Financial Services 11.9%                                                                                                          15
                                                                                                                                                                                                                                                                             Germany, Greece,
                                                                                                                                     %                                                                                                                                       Hungary, Ireland,
           Business Services 14.1%                                                                                                                                                                                                                                           Italy, Latvia, Lithuania,
                                                                                                                                             10
                                                                                                                                                                                                                                                                             Luxembourg, Malta,
                                                                                                                                                                                                                                                                             Netherlands, Poland,
           Others 35.7%                                                                                                                                                                                                                                                      Portugal, Romania,
                                                                                                                                              5
                                                                                                                                                                                                                                                                             Slovak Rep, Slovenia,
                                                                                                                                                                                                                                                                             Spain, Sweden and the
                                                                                                                                              0                                                                                                                              United Kingdom

                                                                                                                                                     EU

                                                                                                                                                              China

                                                                                                                                                                       Hong Kong

                                                                                                                                                                                   USA

                                                                                                                                                                                                            Indonesia
                                                                                                                                                                                                 Malaysia

                                                                                                                                                                                                                        Japan

                                                                                                                                                                                                                                Taiwan

                                                                                                                                                                                                                                         South Korea

                                                                                                                                                                                                                                                          Thailand

                                                                                                                                                                                                                                                                     Other
                                                                                                                                                                                                                                                                             Source: Main indicators
           Source: Singapore in Brief 2012, the Ministry of Trade and Industry                                                                                                                                                                                               of the Singapore
                                                                                                                                                                                                                                                                             economy (Q2 2012)

           Below are some of                            (ii)   Foreign investments               There is generally no restriction   (iii)   Physical and economic                       (v)    Workforce                                               Language
           the key attributes of                               The government policy of          on foreign ownership of                     infrastructure                                     A key pillar of Singapore’s
           Singapore’s economy:                                encouraging private enterprise    businesses. However, certain                Singapore has capitalised on its                   success is its skilled workforce.                       Singapore has four official
                                                               and foreign investment,           industries that are of national             excellent shipping and air links                   With a literacy rate of more                            languages – English, Chinese,
     (i)   Gross Domestic Product                              together with a well-developed    interest are not generally                  with key economies to become                       than 90%, employers have a                              Malay and Tamil. English is the
           (GDP) and major sectors                             infrastructure, a highly          open to private enterprise,                 a top global transportation hub.                   vast pool of resources to tap                           preferred language for business
           Singapore’s GDP stands at                           skilled workforce, political      for example, the manufacture                Together with its excellent                        into. Furthermore, a cordial and                        and in public administration.
           S$327 billion in 2011 while its                     stability and harmonious          of arms and ammunition,                     telecommunications infrastructure                  cooperative relationship exists
           per capita GDP is S$63,050.                         labour relations, has made        newspaper publishing and                    and access to banking facilities,                  between the government,                                 Living and working
                                                               Singapore a popular choice        public transport. There is                  businesses situated here are                       businesses and unions.                                  in Singapore
           Singapore’s open and                                for global investors. Investors   no requirement to register                  well placed to run their regional
           trade-oriented economy                              also appreciate the country’s     or report the investment                    and global operations using                 (vi)   Legal system                                            Singapore is a cosmopolitan
           depends heavily on exports,                         efficient and transparent          of foreign capital, loans or                Singapore as a hub.                                Singapore’s legal system is                             country with an open immigration
           particularly in consumer                            bureaucracy and extensive         technology agreements.                                                                         generally modelled on the                               policy that makes it easy for
           electronics, information                            preferential trade links.                                                     Companies situated in Singapore                    English legal system, reflecting                         foreigners to enter Singapore.
           technology products and                                                               The availability of incentives              can benefit from its network of                     its heritage as a British colony.                       The city-state is recognised as
           pharmaceuticals. At the                             The amount of foreign direct      in targeted segments of                     nearly 70 comprehensive double                     The legal and judicial system                           one of the cleanest cities in the
           same time, Singapore is a                           investment in Singapore as        the economy has been                        taxation agreements (DTAs),                        here is robust and efficient                             world. It has an efficient and
           leading provider of services                        at the end of 2010 stood at       instrumental to Singapore’s                 18 regional and bilateral free                     and Singapore is reputed                                affordable public transport
           in international banking,                           S$618 billion. The top two        success in attracting foreign               trade agreements (FTAs) with                       for its tough stance against                            system, and its healthcare
           trade finance, maritime                              investor countries were the       investments. These schemes                  24 trading partners and the                        corruption. Businesses can                              services are world-class.
           finance, insurance, treasury                         Netherlands and the United        are available in two forms –                39 investment guarantee                            also count on Singapore’s
           operations, and asset and                           States. Other countries with      financial incentives and tax                 agreements.                                        rigorous enforcement of its                             All these factors contribute to a
           wealth management                                   significant investment in          incentives. Financial incentives                                                               strong intellectual property                            living environment that results in
           within the region.                                  Singapore include Japan           provided by the Singapore           (iv) Financial      system                                 laws to protect their                                   Singapore being ranked highly in
                                                               and the United Kingdom.           government include grants                   Singapore, a country with a                        ideas and innovations.                                  many surveys, including:
           To boost the tourism sector,                                                          and subsidies. Seed funding                 ‘AAA’ rating, is acknowledged
           in April 2005 the government                                                          from the government may                     as one of the top international             (vii) Imports/Exports                                         – Foreign talent rank Singapore
           approved the development                                                              also be available to promote                financial centres. Its financial                     As an international trading                              as Asia’s best country to work
           of two integrated resorts                                                             growth in certain sectors.                  system is well-regulated and                       centre, Singapore operates                               in (World Competitiveness
           and casinos that resulted in                                                          Tax incentives are largely                  offers a broad range of services                   a free port with virtually no                            Yearbook 2011, International
           investments of more than                                                              industry-driven and take the                including banking, insurance,                      import or export duties on                               Institute for Management
           US$5 billion. These resorts,                                                          form of tax holidays, reduced               asset management and treasury                      raw materials, equipment or                              Development)
           commenced business in 2010                                                            income and withholding                      services. Businesses here can                      products. Only certain imports
           and are expected to make                                                              tax rates, accelerated tax                  easily tap into its deep and liquid                are controlled for health,                             – Singapore is the first choice for
           a significant contribution                                                             depreciation enhanced                       capital markets as an alternative                  safety and security reasons.                             Asian expatriates (ECA Location
           to the Singapore economy                                                              deductions/allowances and                   source to raise funds.                                                                                      Ratings Survey, 17 April 2012,
           and position Singapore as                                                             investment allowances.                                                                                                                                  ECA International)
           a key entertainment and                                                                                                           There is no foreign exchange
           tourism hub in Asia.                                                                                                              control and no restriction on                                                                             – Singapore is the best place in
                                                                                                                                             repatriation of investment capital                                                                          Asia for personal safety (Personal
                                                                                                                                             and profits from Singapore.                                                                                  safety worldwide city rankings,
                                                                                                                                                                                                                                                         June 2011, Mercer Survey)

10
DOING BUSINESS IN SINGAPORE - PWC
Conducting business in Singapore
     Forms of business

     The available business structures     All new applications of a foreign   • A company is a legal entity,
     in Singapore are companies,           commercial entity must fulfil          separate and distinct from
     branches, sole-proprietorships        the following criteria:               its owners/shareholders. It
     and partnerships (including                                                 can incur obligations and hold
     limited liability partnerships and   • Sales turnover of the foreign        property in its own name.
     limited partnerships).                 entity must be more than             Consequently, it can sue and
                                            US$250,000                           be sued in its own name,
     A foreign entity can also                                                   it has perpetual existence
     establish a representative           • Number of years of establishment     and it can contract with its
     office in Singapore. However,           of the foreign entity must           controlling members.
     a representative office can             be at least three years
     only carry out market research,                                           • There must be at least one
     feasibility studies and liaison      • Proposed number of staff for         shareholder and one director
     work on behalf of parent               the representative office should      in the company. The director
     company. It cannot trade in            be fewer than five people             of the company must be
     goods/services (including                                                   above 18 years old and be
     import and export), lease             The following are the key             any of the following:
     warehousing facilities, lease         features and requirements for
     offices to others for a fee,           each business structure:            – a Singapore citizen
     conclude contracts, provide                                               – a Singapore permanent resident
     services for a fee, issue             Company                             – an employment pass holder
     invoices/receipts, or open                                                – an approval-in-principle
     or negotiate any letter of           • There are three types of             employment pass holder
     credit directly or on behalf           company in Singapore, namely       – a dependant pass holder
     of its parent company.                 private/public companies
                                            limited by shares (with not            Directors cannot be bankrupts or
     With effect from 1 January             more than 50 shareholders for          persons convicted of dishonesty.
     2012, a representative office           private companies limited by
     of a foreign commercial entity         shares, but public companies
     may operate in Singapore for           limited by shares can have
     a maximum of three years               more than 50 shareholders),
     from its commencement date,            public companies limited by
     provided that the representative       guarantee (non-profit making
     office status is evaluated and          activities with some basis of
     renewed. A representative              national or public interest) and
     office that decides to continue         unlimited companies.
     its presence in Singapore
     thereafter should register its
     operations with the Accounting
     and Corporate Regulatory
     Authority of Singapore.

12
DOING BUSINESS IN SINGAPORE - PWC
Setting up a business

         Branch of foreign                   • If the owner of the sole-                Limited Liability                      Registration                          Singapore has no foreign
         corporations                          proprietorship is not ordinarily         Partnership (LLP)                                                            exchange controls on
                                               resident in Singapore, he must                                                  All businesses in Singapore           repatriation of profits. However,
     • A foreign incorporated company          appoint a local manager who is         • The LLP was introduced in 2005.        must be registered with the           banks are required to observe
       which intends to carry on a             above 18 years old and who               It has the limited liability of a      Accounting and Corporate              banking regulations regarding
       business in Singapore is required       should be one of the following:          company and the operational            Regulatory Authority (ACRA).          the internationalisation of
       to register a branch in Singapore,                                               flexibility of a partnership.           Both self-registration on the         Singapore dollars when they
       prior to its commencing               – a Singapore citizen                                                             website and registration              grant credit facilities to non-
       business here.                        – a Singapore permanent resident         • It requires a minimum of two           through a professional service        resident financial institutions.
                                             – an employment pass holder                partners but there is no cap on the    firm are acceptable. For self-
     • To set up a branch in Singapore,      – an approval-in-principle                 maximum number of partners             incorporation of a company,           Annual Filing
       two local agents must be                employment pass holder                   allowed for an LLP. Partners can       all directors, company
       appointed. These agents must          – a dependant pass holder                  be individuals or companies.           secretaries and shareholders          Singapore companies are
       be above 18 years old and one                                                                                           must be Singaporeans,                 required to file an annual
       of the following:                         To qualify as ordinarily resident,   • Unlike partnership, an LLP is a        employment pass holders or            return within one month
                                                 a person must have a local             legal entity, separate and distinct    dependant pass holders.               from the date of their Annual
     – a Singapore citizen                       address and be permitted to            from its owners/partners.                                                    General Meeting (AGM)/
     – a Singapore permanent resident            reside in Singapore.                                                          Licensing                             special resolution in lieu of
     – an employment pass holder                                                      • It is compulsory for all LLPs to                                             the AGM. The return should
     – an approval-in-principle                  Partnership                            appoint at least one local manager.    Licensing requirements may            be accompanied by a set of
       employment pass holder                                                                                                  apply, depending on the industry      audited financial statements
     – a dependant pass holder               • A partnership is a form of               Limited Partnership (LP)               and business concerned.               unless the company qualifies
                                               unincorporated business owned                                                   For instance, financial institutions   as an exempt private company.
         Sole-proprietorship                   by a minimum of two partners           • The LP was introduced in 2009          must be licensed by the Monetary
                                               and a maximum of 20.                     and provides limited personal          Authority of Singapore and            For LLPs, the manager is
     • The term ‘sole-proprietorship’                                                   liability for partners who do not      firms intending to manufacture         required to make an Annual
       refers to an individual who           • A partnership is not a legal             manage the LP.                         or sell certain restricted goods      Declaration to ACRA stating
       carries on a business by himself.       entity separate from its owners/                                                will need appropriate licenses        whether the business is
                                               partners. Each partner is jointly      • It requires a minimum of two           from the regulatory bodies            able to pay its debts as they
     • A sole-proprietorship is therefore      and severally liable for all debts       partners, with at least one            responsible for the industry.         fall due. The first Annual
       not a legal entity that is separate     of the partnership.                      general partner and one limited                                              Declaration must be made
       and distinct from its owner.                                                     partner. There is no cap on the                                              within 15 months of the
                                             • Like sole-proprietorship, a local        maximum number of partners             Other controls                        date of registration.
                                               manager must be appointed                allowed for an LP.
                                               if none of the partners is                                                      It is generally quite easy
                                               ordinarily resident in Singapore.      • A LP is not a separate legal entity,   for foreigners to set up a
                                                                                        in that it does not have a separate    business in Singapore due
                                                                                        legal personality apart from its       to the general lack of foreign
                                                                                        owners/partners.                       ownership restrictions (except
                                                                                                                               for national security reasons and
                                                                                      • It is compulsory for all LPs to        in areas such as air transport,
                                                                                        appoint at least one local manager     newspaper publishing, etc).
                                                                                        if all general partners do not
                                                                                        originally reside in Singapore.

14
DOING BUSINESS IN SINGAPORE - PWC
Taxation in Singapore
       Corporation Income Tax

       Scope of corporate                         Residency                                      Filing of an incorrect return could
       income tax                                                                                result in penalties of one to
                                                  A company is regarded as a                     three times the tax underpaid,
       Singapore asserts its jurisdiction         resident of Singapore if the                   plus fines and/or imprisonment.
       to tax primarily on the basis of           management and control of its                  In cases involving serious
       source. Tax is imposed on income           business is exercised in                       fraudulent tax evasion, the
       sourced in Singapore, as well              Singapore. It is generally                     penalty can be up to four times
       as foreign sourced income                  accepted that the place of                     the tax undercharged.
       received in Singapore, unless              management and control is
       specified exemptions apply.                 where the board of directors’
                                                  meetings are held.                      (ii)   Tax assessment and payment
       Singapore does not have a                                                                 Taxes can be collected by way
       capital gains tax regime.                  Tax compliance and                             of a direct assessment or
       Only revenue gains are                     administration                                 withholding tax.
       taxable. The determination of
       whether a gain is of revenue               The administration of the tax                  For direct assessment, the tax
       (taxable) or capital (not                  system and collection of taxes                 is payable within one month
       taxable) nature is based on                are the responsibility of the                  from the date of the notice of
       the facts and circumstances                Inland Revenue Authority of                    assessment. Late payment
       of each case.                              Singapore (IRAS).                              will attract a penalty of up to
                                                                                                 17% of the outstanding tax.
       It was announced during              (i)   Filing requirements                            With effect from YA 2008, the
       the 2012 Budget that                       The tax year is known as the                   statutory time limit to raise
       gains on disposal of equity                year of assessment (YA) and                    an assessment or additional
       investments by companies                   tax is charged on a preceding                  assessment has been reduced
       will not be taxed if:                      year basis (e.g. income earned                 to four years after the expiration
                                                  in 2011 will only be assessed                  of the YA concerned. There is
     • the divesting company holds a              to tax in YA 2012). All taxpayers              no time-bar in cases of fraud.
       minimum shareholding of 20%                must file an estimate of their
       in the company whose shares                chargeable income with the                     For withholding tax, it is the
       are being disposed of; and                 IRAS within three months from                  responsibility of the person
                                                  the end of their financial year. For            paying the non-resident to
     • the divesting company                      YA 2012 the income tax return                  withhold and pay the taxes to
       maintains the minimum 20%                  should be filed by 30 November                  the Comptroller. With effect
       shareholding for a minimum                 2012 (i.e. for income derived in               from 1 July 2012, the tax
       period of 24 months just                   the financial year ended 2011).                 withheld must be paid to the
       prior to the disposal.                                                                    Comptroller by the 15th of the
                                                  Failure to file the return on                   second month following the
                                                  time will attract fines and/or                  date of the payment to the non-
                                                  imprisonment. The Comptroller of               resident. Failure to do so will
                                                  Income Tax may compound the                    attract penalties of up to 20%
                                                  offence in lieu of court proceedings.          of the withholding tax unpaid.

16
DOING BUSINESS IN SINGAPORE - PWC
Taxable income                                    Exempt amount              Form                             Basis of Assessment
                                                First      S$10,000            @ 75%              = S$7,500
                                                Next       S$290,000           @ 50%              = S$145,000                Company                          Profits arising from a company are taxed at the corporate tax rate.

                                   figure 1     Total      S$300,000                               S$152,500                 Branch of foreign                The tax treatment applicable to a company and a branch is largely
                                                                                                                             corporation                      similar. As branches are usually non-resident for tax purpose,
                                                                                                                                                              they are not entitled to claim Singapore treaty benefits or certain
                                                                                                                                                              tax exemptions.
                                                Taxable income                                    Exempt amount

                                                First      S$100,000           @ 100%             = S$100,000
                                                                                                                             Sole-proprietorship              Profits are taxed at personal income tax rates.
                                                Next       S$200,000           @ 50%              = S$100,000
                                   figure 2     Total      S$300,000                               S$200,000                 Partnership                      Each partner is assessed separately on his share of the divisible
                                                                                                                                                              income of the partnership at the rate applicable to the status of
                                                                                                                                                              the partner.
     Tax rates and tax                        prevailing corporate tax rate         They are used both for the
                                                                                                                             Limited Liability                Although a separate legal entity under general law, it is treated
     exemption schemes                        for its first three consecutive        promotion of new investments
                                              YAs, as shown in figure 2.             in preferred industries and for          Partnership                      as fiscally transparent for tax purpose, i.e. like a partnership.
     With effect from the YA                                                        encouraging existing businesses                                           However, there are restrictions imposed on the share of losses
     2010, the corporate tax rate is          These exemptions do not               to upgrade their operations, or                                           and unabsorbed tax depreciation by reference to the amount
     reduced to 17%. This applies to          apply to:                             to provide new products and                                               of capital invested. Tax will be imposed based on the rate applicable
     both resident and non-resident                                                 services that will be beneficial to                                        to each partner.
     entities. The corporate tax rate     – income that is subject to tax           the Singapore economy.
     may be further reduced if tax          at concessionary tax rates; and                                                  Limited Partnership              Each partner is assessed separately on his share of the divisible
     incentives apply.                                                              The tax incentives are                                                    income of the partnership at the rate applicable to the status of the
                                          – income earned by a non-                 administered by various                                                   partner. However, there are restrictions imposed on limited partners
     Effective from YA 2008, a              resident company that is subject        government agencies, including                                            on the share of losses and unabsorbed tax depreciation
     taxpayer can enjoy partial             to a final withholding tax.              the Economic Development                                                  by reference to the amount of capital invested.
     tax exemption for the first                                                     Board, International Enterprise
     S$300,000 of income taxable              Tax Incentives                        Singapore, the Monetary
     at the prevailing corporate tax                                                Authority of Singapore
     rate, as shown in figure 1.               Tax concessions, such as tax          and the Maritime Port
                                              holidays, enhanced deductions/        Authority of Singapore.                Calculation of Taxable income    – Any other gains or profits            Main categories of non-
     Subject to satisfying certain            allowances and reduced tax            The broad categories of                                                   of an income nature.                  deductible expenses include:
     conditions, a new company                rates, play a pivotal role in         activities that could qualify          The starting point is usually
     can enjoy partial tax exemption          shaping the development of            for tax concessions are                the profit or loss before           It should be noted that             – Domestic and private expenses.
     for the first S$300,000                   Singapore’s economy.                  summarised below:                      taxation figure reflected in the     Singapore dividends are
     of income taxable at the                                                                                              audited accounts. Thereafter,      exempt in the hands of the          – Income or similar taxes.
                                                                                                                           adjustments are made for           shareholders. In addition,
                                                                                                                           capital gains, tax-exempt          with effect from 1 June             – Expenses associated with
                                                                                                                           income, non-deductible             2003, certain foreign sourced         the cessation of business.
       Category                               Targeted business activities         Possible tax benefits                    expenses, and differences          income, namely dividends,
                                                                                                                           between book and tax               branch profits and income            – Capital employed
       Manufacturing/Services                 – New products or processes          – Tax holidays or reduced tax           depreciation to arrive at the      from the provision of services        in improvements.
                                              – Investments in productive           rates or tax incentives                chargeable (taxable) income.       rendered through a fixed place
                                                equipment                          – Investment allowance on                                                  of business outside Singapore,        Productivity and Innovation
                                                                                                                           Gross taxable income usually       may be exempt from tax when           Credit Scheme
                                              – Headquarter activities              fixed assets
                                                                                                                           includes the following items:      received by a resident, provided
                                              – Shipping                           – Enhanced deductions/allowances                                           certain conditions are met.           The Productivity and Innovation
                                              – Intellectual property management   – Withholding tax exemption           – Trade or business income.                                                Credit (PIC) scheme was
                                                                                                                                                              Deductions are allowed for            introduced in 2010 to encourage
                                                                                   – Reduced tax rates
       Trade                                  – Trading in commodities                                                   – Dividends, interest                all outgoings and expenses            investments in the following six
                                                                                   – Enhanced deductions /allowances       and discounts.                     wholly and exclusively incurred       activities along the innovation
       Finance                                – Banking                            – Reduced tax rates and                                                    in the production of taxable          value chain:
                                              – Insurance                           withholding tax exemption            – Rents, royalties, premiums,        income, provided they are not
                                              – Treasury                           – Enhanced deductions/allowances        and other profits arising          specifically disallowed under
                                                                                                                           from property.                     the Income Tax Act.
                                              – Fund management                    – Tax exemption for fund and
                                                                                    reduced tax rate for fund manager

18
• Acquisition or leasing of             against future taxable income,          in Singapore, have the same
       prescribed automation                 provided that there is no               accounting year end and they            Nature of income                                                                            Tax rate
       equipment;                            substantial change in ownership         must be members of the same
                                             of the loss-making company on           group (very broadly, there must         Interest, commission, fee or other payment in connection with any loan
                                                                                                                                                                                                                         15%1
     • Training of employees;                the relevant comparison dates           be a Singapore holding company          or indebtedness
                                             (the ‘continuity of ownership test’).   and there should be at least
     • Acquisition of intellectual           The continuity of ownership test        75% common ownership as                 Royalty or other lump sum payments for the use of movable properties                        10%1
       property rights;                      requires that the same ultimate         well as entitlement to at least
                                             shareholders of the company             75% of residual profits and              Payment for the use of or the right to use scientific, technical, industrial
     • Registration of patents,              must own at least 50% of the            assets of the other company).                                                                                                       10%1
                                                                                                                             or commercial knowledge or information
       trademarks, designs                   company’s total issued shares
       and plants varieties;                 on the relevant dates. In addition,     Withholding tax
                                             the carry forward of unabsorbed                                                 Rent or other payments for the use of movable properties                                    15%1
     • Research and development              tax depreciation is subject to the      Certain payments made by
       activities; and                       same trade test.                        a person resident in Singapore          Technical assistance and service fees (for services rendered in Singapore)                  17%
                                                                                     or a permanent establishment
     • Investment in approved                Taxpayers are allowed to carry          (PE) in Singapore are deemed            Management fees (for services rendered in Singapore)                                        17%
       design projects.                      back unabsorbed tax depreciation        to be derived from Singapore.
                                             and unabsorbed trade losses of          When such payments are made
        For YA 2011 to YA 2015, all          up to S$100,000 for up to one           to non-residents they will be
        businesses can enjoy deduction/      YA. The relief is subject to the        subject to withholding tax.           out at arm’s length. It has issued     intends to review taxpayers’
        allowance at 400% on up to           abovementioned same trade test                                                guidance on how the arm’s              compliance with the arm’s
        S$400,000 of their expenditure       and continuity of ownership test.       The withholding tax rate is based     length principle is to be applied      length standard for their
        per annum on each of the six                                                 on the prevailing corporate tax       in practice and the documentation      related-party transactions.
        qualifying activities.               Group relief                            rate (currently 17%) but may be       taxpayers need to maintain to          Although it has been spelt out
                                                                                     reduced to 10% or 15% for certain     comply with this principle. The        as a consultative process, the
        To enable businesses to enjoy        Since YA 2003, a group relief           types of income under domestic        Singapore transfer pricing rules       review contains an element of
        maximum PIC benefits, the             regime has been in effect in            law. The withholding tax rate may     apply where at least one related       a field audit and represents a
        expenditure cap has been pooled      Singapore. As a result, a qualifying    be further reduced under specific      party is subject to tax in Singapore   step-up by the IRAS in ensuring
        to give a combined cap of            company may transfer its current        concessions introduced to promote     and it applies to all transactions     adherence to the Singapore
        S$800,000 for YA 2011 and 2012       year loss items (i.e. unutilised        the economic or technological         (both local and cross-border)          transfer pricing guidelines.
        and S$1,200,000 for YA 2013 to       capital allowances, trade losses        development of Singapore, or          between a Singapore taxpayer
        2015 for each qualifying activity.   and approved donations) to              where the recipient of the payment    and its related parties. Under         Thin capitalisation
                                             another company within the              is a tax resident of a country with   the legislation, the IRAS is
                                                                                                                                                                                                           1
        Unabsorbed losses                    same group to set-off against           which Singapore has made a DTA.       empowered to make pricing              Singapore does not have                      These withholding tax rates apply
        and tax depreciation                 the latter’s taxable income.                                                  adjustments to transactions that       thin capitalisation rules.                   when the income is not derived by
                                                                                     Transfer pricing                      are not in compliance with the                                                      the non-resident person through its
        Unabsorbed losses and tax            To qualify for the group relief,                                              arm’s length standard.                 Controlled Foreign                           operations carried out in Singapore.
        depreciation can be carried          the transferor and claimant             The IRAS expects all related-                                                Companies (CFC)                              They are to be applied on the gross
        forward indefinitely and offset       companies must be incorporated          party transactions to be carried      The IRAS has also issued a                                                          payment and the resultant tax payable
                                                                                                                           circular on transfer pricing           Singapore does not                           is a final tax. For operations carried
                                                                                                                           consultation. The circular             have CFC rules.                              out in Singapore, the prevailing tax
                                                                                                                           outlines how the IRAS                                                               rates (stated below) will apply:

                                                                                                                                                                                                               Non-resident persons (other than
                                                                                                                                                                                                               individuals): 17%
20                                                                                                                                                                                                             Non-resident individuals: 20%
Personal Income Tax

       Scope of personal income tax         Taxable income                            Tax rates                             Not Ordinarily Resident            Administration and                     Employer’s obligations
                                                                                                                            (NOR) Scheme                       compliance
       An individual is a Singapore         An individual’s taxable income            Resident individuals are taxed                                                                                  Employers are required to
       tax resident for a YA if he:         would normally include some,              at progressive rates ranging          A Singaporean, Singapore           An individual is required to file       compile a return showing the
                                            or all of the following:                  from 2% to 20% (see YA 2012           permanent resident (SPR)           his Singapore tax return (Form         total remuneration paid to each
     – resides in Singapore, except                                                   tax rate table below):                or foreigner may qualify for       B1 – for employed individuals;         employee during the year to
       for temporary absences; or         – gains or profits from a trade                                                   NOR status for a five-year          Form B for self-employed               the IRAS. The tax liability of the
                                            or profession;                            Non-resident individuals (other       period if he:                      individuals; and Form M– for           employees will be determined
     – is physically present or                                                       than a director) are taxed on                                            non-resident individuals) in           based on the information
       employed in Singapore (other       – earnings from employment                  employment income at the higher     – has not been a Singapore           respect of income derived in           provided by the employers
       than as a director of a company)     (including benefits-in-kind);             of a flat rate of 15% (without         tax resident in the three YAs      a year by 15 April (for paper          and the information on other
       for 183 days or more during the                                                any deduction of personal reliefs     preceding the year in which        returns) or 18 April (for electronic   sources of income compiled by
       basis year.                        – pension, charge or annuity;               and allowances) and resident          he first qualifies for the NOR     filing) of the following year.          the employees and reported in
                                                                                      tax rates. All other Singapore-       scheme; and                                                               their individual tax returns.
       As a concession, an individual     – rents, royalties, premiums                sourced income derived                                                   Late filing of tax returns will
       may also be treated as resident      and other profits arising                 by non-resident individuals         – is a Singapore tax resident for    attract penalty of up to S$1,000       Employers are required to
       in Singapore if he:                  from property;                            (including director fees) is          the YA in which he wishes to       or may result in a summons             give notice to the IRAS within
                                                                                      taxed at a flat rate of 20%.           qualify for the scheme.            to attend court, a warrant of          a stipulated timeframe and
     – stays in Singapore for a           – any gains or profits of an                                                                                         arrest, or other legal actions.        withhold all monies payable
       consecutive period spanning          income nature not covered                 Non-resident individuals (other       A NOR will enjoy the following     Furthermore, the penalties             to employees who are not
       three calendar years; or             by the above.                             than directors and public             benefits (subject to prescribed     for filing an incorrect tax             Singapore citizens prior to
                                                                                      entertainers) engaged in short-       conditions and capping limits):    return apply to individuals            cessation of employment or
     – enters Singapore on or after         Depending on his personal                 term employment in Singapore                                             and companies alike.                   are leaving Singapore for more
       1 January 2007 and stays             circumstances, a resident                 for not more than 60 days in a      – time apportionment of income                                              than 3 months. The money
       or works in Singapore for            individual can utilise a range            year may be exempt from tax           from Singapore employment          Income tax is payable within           withheld by the employer will
       a continuous period of at            of reliefs to be set off against          in Singapore.                         (with effect from YA 2009,         one month from the date of the         be returned to the employees
       least 183 days spanning              his taxable income.                                                             this includes home leave and       Notice of Assessment, unless           after all outstanding tax has
       two calendar years.                                                                                                  benefits-in-kind, but excludes     the individual opted for payment       been paid and tax clearance
                                                                                                                            directors’ fees) by reference to   through an instalment plan.            has been obtained.
       Both resident and non-               Chargeable Income (S$)             Rate (%)   Gross Tax Payable (S$)            time spent outside Singapore
       resident individuals are                                                                                             on business; and                                                          Employers are obliged to
       subject to Singapore income          First 20,000                       0          0                                                                                                           make monthly contributions
                                            Next 10,000                        2.0        200                             – exemption of employer’s
       tax on income derived from                                                                                                                                                                     to the Central Provident
       Singapore, unless specific            First 30,000                       –          200                               contributions to non-mandatory                                            Fund for Singaporeans
       exemptions apply. Most               Next 10,000                        3.50       350                               overseas social security                                                  and Singapore permanent
       types of investment income           First 40,000                       –          550                               schemes/pension funds (only                                               residents (see the Human
       are exempt from tax. Generally       Next 40,000                        7.0        2,800                             available to non-Singapore                                                Resource and Employment
       speaking, foreign-sourced            First 80,000                       –          3,350                             citizens/non-SPRs).                                                       section for more details).
       income received in Singapore         Next 40,000                        11.5       4,600
       by an individual is exempt from      First 120,000                      –          7,950
       Singapore income tax.                Next 40,000                        15         6,000
                                            First 160,000                      –          13,950
                                            Next 40,000                        17         6,800
                                            First 200,000                      –          20,750
                                            Next 120,000                       18         21,600
                                            First 320,000                      –          42,350
22                                          Above 320,000                      20
Rate of SSD            Where holding period is

                                                                                                                                                                                                   More than        More than      More than
                                                                                                                                                                                      Up to        1 year           2 years        3 years
                                                                                                                                                               On consideration       1 year       and up           and up to      and up to
                                                                                                                                                               or market value,                    to 2 years       3 years        4 years
                                                                                                                                                               whichever is the
                                                                                                                                                               higher
                                                                                                                                                                                       16%           12%               8%              4%

     Goods and Services Tax                                                          Other taxes

     A goods and services tax              GST returns                               Stamp duty                          Under the measures                    residential properties which           – Foreigners2 and
     (GST), which is a tax on                                                                                            introduced to curb speculation        were acquired on or after                non-individuals – 10%
     domestic consumption, was             The business is required                  Stamp duties are chargeable         of residential properties in          30 August 2010 and sold
     implemented on 1 April 1994.          to file periodic GST returns               on instruments that effect          Singapore, certain additional         within three years of                  – Singapore permanent residents
                                           (usually quarterly) within one            transactions in immovable           duties apply to sellers and           acquisition, depending on                who already own one or more
     Scope of GST                          month after the end of the                property situated in Singapore,     buyers of residential properties,     the holding period. These are            residential properties, whether
                                           prescribed accounting period.             as well as stocks and shares        depending on the periods in           detailed in the table above.             owned wholly, partially,
     As a basic rule, a supply of          The net GST payable is similarly          of Singapore companies.             which such properties are                                                      or jointly with others; and
     goods or services made in             due within one month after the                                                transacted. These are set out       • Higher varying SSD rates                 Singapore citizens who already
     Singapore by a taxable person         end of the prescribed accounting    (i)   Stocks and shares                   as follows:                           will be further imposed on               own two or more residential
     in the course or furtherance          period (unless the business is            For the sale of stocks and                                                residential properties which are         properties, whether owned
     of any business carried on by         under a GIRO arrangement).                shares, duty is charged at the    • Properties acquired before            acquired on or after 14 January          wholly, partially, or jointly with
     him is subject to GST at the                                                    rate of 0.2% on the amount          20 February 2010 will not be          2011 and sold within four years          others – 3%
     standard rate of 7%, unless           GST on purchases                          or value of consideration,          subject to a seller’s stamp           of acquisition, depending on
     the supply qualifies for zero-                                                   whichever is the higher. It is      duty (SSD).                           the holding period. These are             Property Tax
     rating or is an exempt supply.        If the business is registered             usually borne by the purchaser                                            detailed as follows:
                                           for GST, the input GST on                 unless otherwise agreed           • An SSD was imposed on                                                           In Singapore, property tax is
     The main exemptions are               purchases that are used or to             between the relevant parties.       sellers who bought residential      – Additionally, the following               a tax on immovable properties,
     financial services and the             be used for the business can                                                  properties on or after                affected buyers on and after              including houses, buildings
     sale or lease of residential          generally be offset against               Transactions in shares of           20 February 2010 and sold them        8 December 2011 would                     and land. The tax payable is
     properties. Zero-rating is            the output GST collected                  companies incorporated              within one year of acquisition.       have to pay additional buyer’s            calculated based on the tax rate
     generally applicable to the           on sales (subject to the                  outside Singapore do not            The SSD was calculated in             stamp duty (ABSD) at the                  (currently 10%) of the annual
     supply of international services      input tax recovery rules).                attract Singapore stamp duty,       accordance with the BSD.              corresponding rates on the                value of the property. Reduced
     and export of goods.                                                            unless the share register is                                              total amount of consideration             rates apply for owner-occupied
                                           Import of goods                           kept in Singapore.                • Varying SSD rates will be             or value of the property,                 residential properties.
     GST registration                                                                                                    subsequently imposed for              whichever is the higher:
                                           GST is payable on the import of     (ii) Immovable     property
     A person who is making                goods into Singapore, and this            For the sale of immovable
     taxable supplies of goods and/        is collected by the Singapore             property, stamp duty of up to
     or services in Singapore with         Customs. The GST is based on              3% is charged on the amount
                                                                                                                         Rate of SSD          Where holding period is
     an annual turnover exceeding          the import value (cost, insurance         or value of consideration,
     (or expected to exceed) S$1           and freight) and includes any             whichever is the higher. As
     million is required to register for   Customs duty due. There are               noted above, this is usually                                               More than         More than
     GST. The business has to notify       a number of import GST relief             borne by the purchaser (i.e. a                           Up to 1 year      1 year and up     2 years and up
                                                                                                                         On consideration                       to 2 years        to 3 years
     the IRAS of its obligation to         schemes (e.g. Major Exporter              buyer’s stamp duty or ‘BSD’)
                                                                                                                         or market value,
     register for GST within 30 days       Scheme) to ease the cash                  unless otherwise agreed             whichever is the
     of when the obligation arises.        flow of the business as GST                between the relevant parties.       higher
                                           is suspended on the import                                                                         Same as BSD         2/3 of BSD        1/3 of BSD
                                           of goods into Singapore.

                                                                                                                                                                                                        2
                                                                                                                                                                                                            Foreigners of certain nationalities
                                                                                                                                                                                                            who fall within the scope of
                                                                                                                                                                                                            respective Free Trade Agreements
                                                                                                                                                                                                            will be accorded same treatment as
                                                                                                                                                                                                            Singapore citizens.
24
Audit and                                                                                                         Human Resources
     accountancy                                                                                                       and Employment Law
     Requirement to audit              Public-listed companies are                                                     Employees’ rights                   Given the large pool of skilled      – two weeks’ notice if the
                                       subject to additional financial                                                  and obligations                     labour available in Singapore, it      employee has been employed
     Businesses, including private     statement and disclosure                                                                                            is generally easy to hire unless       for two years or more but less
     and public companies and          requirements promulgated                                                        The Employment Act covers           the business is looking for people     than five years; and
     branches of foreign companies,    by the Singapore Exchange.                                                      every employee who is under a       with very specialised skills.
     are required to be audited                                                                                        contract of service, except for:                                         – four weeks’ notice if the
     by independent certified           Record-keeping                                                                                                      Further, Singapore maintains           employee has been employed
     public accountants, unless                                                                                      a. any person employed in             an open-door policy for foreign        for five years or more.
     they are sole proprietorships,    Every company incorporated                                                      a managerial or                     talents. Applications for
     partnerships and representative   in Singapore must keep                                                          executive position;                 foreign workers would                  Pension
     offices. Under the Companies       accounting records and these                                                                                        normally be directed to
     Act, dormant private companies    records can be kept outside                                                   b. any seaman;                        the Foreign Manpower                   The Central Provident Fund
     and exempt private companies3     Singapore. However, records                                                                                         Employment Division of                 (CPF) is a statutory saving
     with annual revenue that is       sufficient to enable a profit and                                               c. any domestic worker; and           the Ministry of Manpower.              scheme in Singapore to
     S$5 million or less are           loss account and balance sheet                                                                                                                             provide retirement and medical
     exempted from audits.             to be prepared should be sent                                                 d. any person employed by             Role of Unions                         benefits for employees who
                                       and kept in Singapore.                                                          a Statutory Board or                                                       are Singapore citizens or
     Businesses can choose their                                                                                       the Government.                     Collective bargaining is               Singapore permanent residents.
     financial year end. These          The accounting records must                                                                                         covered under the Industrial           Employees are required to
     audited accounts should be        be kept for five years from                                                      The Employment Act governs          Relations Act and can be               contribute to this fund at a rate
     prepared and filed with ACRA       the end of the financial year                                                    the rights of employees in          applied to all employees in            of up to 20%. For employers,
     on an annual basis and they are   in which the transactions or                                                    certain areas, including:           a firm. However, the employer           the rate of CPF contribution
     available to the public (except   operations to which they relate                                                                                     may object, based on specific           can be up to 16%, depending
     for private exempt companies).    are completed.                                                                – rest days and hours of work;        grounds, to the trade union’s          on the employee’s citizenship
                                                                                                                                                           representation of an employee          status, age and wage band.
     Reporting standards                                                                                             – leave and holidays;                 who is employed in a
                                                                                                                                                           managerial or an executive             Foreign employees and
     The Accounting Standards                                                                                        – salary;                             position for the purpose of            their employers are not
     Council (ASC) is empowered                                                                                                                            collective bargaining.                 required to participate in
     to prescribe accounting                                                                                         – retrenchment; and                                                          the contribution of CPF.
     standards in Singapore. It                                                                                                                            Termination of employment
     also reviews and recommends                                                                                     – retirement.                                                                Skills Development Levy (SDF)
     corporate governance and                                                                                                                              The Employment Act states the
     disclosure practices on                                                                                           Although Singapore has no           following minimum notice to be         Employers are required
     a continuing basis. Most                                                                                          statutory minimum wage, the         given prior to the termination of      to contribute 0.25% on
     businesses apply the Singapore                                                                                    National Wage Council does          a contract of service:                 the first S$4,500 of the
     Financial Reporting Standards                                                                                     recommend guidelines for                                                   gross remuneration of all
     (SFRS) which are closely                                                                                          annual wage adjustments.           – one day’s notice if the               employees. The SDF is used
     modelled on International                                           3
                                                                                                                                                            employee has been employed            to provide grants to Singapore-
                                                                             Exempt private companies refer to
     Financial Reporting Standards                                                                                     Recruitment matters                  for less than 26 weeks;               incorporated companies to
                                                                             companies with not more than 20
     issued by the International                                                                                                                                                                  provide training to employees.
                                                                             shareholders, none of which is a
     Accounting Standards Board.                                                                                       Recruitment is commonly done       – one week’s notice if the
                                                                             corporation. A private company which
                                                                                                                       through engaging a recruitment       employee has been employed
                                                                             is wholly owned by the government
                                                                                                                       agency and advertising in            for 26 weeks or more but less
                                                                             may also be gazetted as an exempt
                                                                                                                       newspapers or job websites.          than two years;
                                                                             private company by the Minister if it
                                                                             is in the nation’s interest.
26
Trade                                                                    Banking in Singapore
     Singapore has a highly              To give local companies              Singapore’s banking system
     developed market-based              added safeguards and                 is among the strongest in the
     economy. While the state            incentives to expand                 world and it has strict banking
     plays a key role in formulating     overseas, Singapore has              secrecy laws. As the regulator
     the economic strategies of          concluded 18 regional and            of Singapore’s financial
     the country, it does not            bilateral FTAs with 24 trading       services sector, the Monetary
     intervene in the commercial         partners. These FTAs have            Authority of Singapore has
     decisions of firms.                  strengthened Singapore’s             prudential oversight over the
                                         cross-border trade by                banking, securities, futures and
     The Singapore government            eliminating or reducing              insurance industries, including
     does not tolerate anti-             import tariff rates in the           administering the various
     competitive practices. The          country of destination,              statutes pertaining to money,
     Competition Act prohibits           providing preferential access        banking, insurance, securities
     agreements or concerted             to service sectors, easing           and the financial sector
     practices that lead to the          investment rules, improving          in general.
     prevention, restriction or          intellectual property regulations,
     distortion of competition.          and opening government               There are generally no
     Any conduct constituting the        procurement opportunities.           restrictions imposed on both
     abuse of a dominant position                                             resident and non-resident
     in any market is also prohibited.                                        companies in holding bank
                                                                              accounts. Savings accounts are,
     There are no tariffs or quota                                            however, generally not offered
     restrictions for imports. Certain                                        in Singapore to companies.
     goods are dutiable or controlled
     for revenue, safety and security                                         Opening a bank account is a
     reasons. As Singapore is a                                               relatively simple and straight-
     member of the Association                                                forward process. The extent
     of South East Asian Nations                                              of paperwork required largely
     (ASEAN), goods originating                                               depends on each bank’s Know
     in and consigned from                                                    Your Client requirements.
     Singapore are entitled to
     preferential tariffs in the                                              Investors with good credit
     other ASEAN countries.                                                   standing should generally be
                                                                              able to utilise a myriad range
                                                                              of credit facilities in Singapore.
                                                                              These credit facilities include
                                                                              overdrafts, and short-term
                                                                              advances to medium and long-
                                                                              term loans, import and export
                                                                              financing facilities etc.

28
HSBC in Singapore
     Overview

     One of the earliest banks to        Corporate Sustainability            Initiatives in Singapore include
     establish in Singapore, The                                             the HSBC Youth Excellence
     Hongkong and Shanghai               For HSBC, Corporate                 Initiative which recognises
     Banking Corporation Limited         Sustainability is about             and supports Singapore’s
     first opened its doors in            bringing social and                 best and brightest in the            HSBC’s contribution has
     December 1877. Today,               environmental issues                arts, environment, leadership        been recognised with a host
     HSBC is a prominent player          together with financial              and community service,               of national and international
     in Singapore’s banking sector       performance to maintain             and provides them with               awards, including:
     and aims to be the leading          and grow a successful               opportunities to develop and
     international trade bank here       business for the benefit             realise their immense potential      • 2011, 2010, & 2007 ComChest
     and across the region. The          of our stakeholders.                to serve the community; and            Corporate Platinum Award
     Bank offers a comprehensive                                             the Bank’s Care-for-Nature
     range of banking and financial      • We apply clear policies            Programme launched in                • 2011 & past consecutive
     services that meet the needs of      and processes to manage            1989 as a long-term effort             years NAC Patron of
     customers, from those of multi-      potential social and               to promote environmental               the Arts Award
     national corporations to local       environmental risk in our          awareness, research and
     businesses and individuals.          lending and other financial         conservation.                        • 2009, 2008 & 2003
                                          activities in sensitive sectors.                                          ComChest Special Events
     As a Qualifying Full Bank,                                              Its Corporate Responsibility           Platinum Award
     HSBC Singapore has a network       • We help our clients to             Challenge is an annual bank-
     of nine branches and over            seize the opportunities            wide staff volunteering initiative   • 2007 British Business
     10 locations providing self-         presented by the shift to          that delivers a significant             Awards for Corporate Social
     service terminals as well as         a low carbon economy.              impact and makes a tangible            Responsibility
     advanced electronic banking                                             difference to the lives of the
     channels. The Bank provides        • We try to reduce our own           needy and underprivileged.           • 2005 NVPC Corporate
     a range of financial and              environmental footprint and                                               Citizen Award
     wealth management services           share good practice on this        These initiatives are
     including retail, commercial,        with our clients and other         underpinned by its Volunteers        • 2004 NVPC Outstanding
     corporate, investment and            stakeholders.                      @HSBC programme, which                 Corporate Volunteer
     private banking, insurance,                                             provides staff with an organised       of the Year Award
     forfaiting and trustee services,   • We focus our community             platform to contribute – in a
     securities and capital markets       investment (philanthropic          sustainable and consistent           • 2002 United Way
     services. HSBC is an approved        activities) on education           manner – their time and                International Outstanding
     Primary Dealer in the Singapore      and the environment.               services to those in need in           Global Community-Building
     Government Securities Market                                            the community as well as to            Project Award
     and an Approved Bond                                                    the environment.
     Intermediary (ABI), with more                                                                                • 2001 President’s Social
     than 100 staff operating                                                                                       Service Award
     one of the largest integrated
     dealing rooms in Singapore.                                                                                  • 2001 Singapore Children’s
                                                                                                                    Society Gopal Haridas Award

                                                                                                                  • 1998 NCSS Outstanding
                                                                                                                    Corporate Citizen Award

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Country overview
     Capital city                  Singapore

     Area and population           Area of 712.4 sq km and population size of 5.077 million

     Language                      English, Chinese, Malay and Tamil

     Currency                      Singapore dollars

     International dialling code   65

     National Holidays             Scheduled Public Holidays for 2013

                                   New Year’s Day                        1 January
                                   Chinese New Year                      11 February
                                   Good Friday                           29 March
                                   Labour Day                            1 May
                                   Vesak Day                             24 May
                                   Hari Raya Puasa                       8 August
                                   National Day                          9 August
                                   Hari Raya Haji                        15 October
                                   Deepavali                             3 November
                                   Christmas Day                         25 December

     Business and banking hours    Generally from 8.30 am to 6 pm (Mondays to Fridays)
                                   Banks are generally open from 9.30 am to 3 pm (Mondays to Fridays)
                                   and up to 1 pm on Saturdays

     Stock exchange                Singapore Exchange

     Political structure           Parliamentary system of government based on Westminster model

     Economic statistics           Singapore’s GDP stands at S$327 billion in 2011 while its per capita
                                   GDP is S$63,050

                                   The amount of foreign direct investments in Singapore as at end 2010
                                   stood at S$619 billion

     Useful links to get started   Singapore Economic Development Board                    edb.gov.sg
                                   Accounting and Corporate Regulatory Authority           acra.gov.sg
                                   Inland Revenue of Authority of Singapore                iras.gov.sg
                                   Ministry of Manpower                                    mom.gov.sg
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Contacts
     Paul Lau

     Tel: +65 6236 3733

     Email: paul.st.lau@sg.pwc.com

     http://www.pwc.com/gx/en/
     worldwide-tax-summaries

     Contact HSBC Commercial Banking

     Customer Service Centre:
     1800 216 9008 (Singapore)
     (65) 6216 9008 (overseas)

     Website: hsbc.com.sg/commercial

     Email: contact@hsbc.com.sg

     Main branch: HSBC Building
     21 Collyer Quay #01-00
     Singapore, 049320

     3rd Edition: November 2012

     Copyright

     Copyright 2013. All rights reserved.

     ‘PwC’ and ‘PricewaterhouseCoopers’
     refer to the network of member firms of
     PricewaterhouseCoopers International
     Limited (PwCIL), or, as the context requires,
     individual member firms of the PwC network.
     Each member firm is a separate legal entity
     and does not act as agent of PwCIL or any
     other member firm. PwCIL does not provide
     any services to clients. PwCIL is
     not responsible or liable for the acts or
     omissions of any of its member firms
     nor can it control the exercise of their
     professional judgment or bind them in
     any way. No member firm is responsible
     or liable for the acts or omissions of any
                                                     141TP_Singapore_100712_3

     other member firm nor can it control the
     exercise of another member firm’s
     professional judgment or bind another
     member firm or PwCIL in any way.
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