Opening a corporate bank account in Singapore comes naturally since it is necessary to send and receive money after setting up your company. As natural as it comes, bank account openings in Singapore have not been easy due to tightened anti-money laundering compliance brought on by recent cases of high-profile fraud. In this article, we will cover the two most essential questions and the basics of how to.
Due to the changing landscape, most banks allow remote bank account openings. In exchange, of course, is stricter compliance.
Why are banks making it so difficult to open bank accounts?
As stated by the Organisation for Economic Co-operation and Development (OECD): “As the world becomes increasingly globalised and cross-border activities become the norm, tax administrations need to work together to ensure that taxpayers pay the right amount of tax to the right jurisdiction.”. Thus, the birth of The Common Reporting Standard (CRS).
The CRS calls on tax authorities across the world to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis.
Since 1 January 2017, Singapore based Financial Institutions such as banks are required to:
If the company is NOT a tax resident in Singapore or a tax resident elsewhere, the information will be exchanged with other jurisdictions under the CRS. The information consists of the details of financial assets they hold on to behalf of non-resident taxpayers and the income derived therefrom.
Similarly, overseas Financial Institutes must identify account holders who are Singapore tax residents and report their financial accounts to IRAS through their respective local tax authorities.
What do banks look for to approve your corporate bank account opening?
As a result of CRS, and understandably so, banks would like to avoid the hassle of the additional reporting of client information. If a company does not have tax substance in Singapore, they are likely to reject the application for an account opening.
Therefore, your company needs to have tax substance in Singapore.
Tax substance is commonly measure by tax residency. A company is tax resident in Singapore when the control and management of the company is exercised in Singapore.
How can you achieve tax substance?
Challenges to Opening a Corporate Bank Account in Singapore
Many of our clients manage their businesses while overseas, without a physical presence in Singapore. While this is allowed, new companies will find it difficult to open a bank account and existing companies will find their accounts are at risk of closing.
The banks are looking for your physical contribution in Singapore, but you do not have one yet, or it does not make sense to initiate operations when you cannot secure a bank account!
Paul Hype Page solutions:
1. Obtain an employment pass
Obtain an employment pass to live and work in Singapore. This implies that control and management is in Singapore which directly contributes to local tax residency, or that an employee is located in Singapore.
2. Engage local staff through our Shared Services Solution
Our Shared Services Solution enable your business moving by employing physical local staff for multiple roles as below. Having physical presence in Singapore will contribute to your business substance and meet current requirement from the government.
Key factors for successful corporate bank account opening
Whether you have a case for your account opening or not, abide by these best practices- do not jeopardise your chances in a rush!
1. Get all your legal documents ready
Common documents requested by bank for verification are:
2. Work with the right people
The ideal situation would be to have a local representative speaking to bankers. Your local representative should be related to your company e.g. your company secretary, an employee etc. On the other hand, work with the right bankers. A more subjective criteria, but one that Paul Hype Page fulfils from years of building relationships in the industry.
3. Applying with the right bank
Match your business needs and risks with the right bank. Banks may have their own preferences for business activities or profiles of ultimate beneficiary owners.
Steps to open a corporate bank account in Singapore
Paul Hype Page’s focus is to prove that your company has a tax substance* and select an account that best fits your business needs. Moreover, we are working with numerous banks, including traditional banks, digital banks and we have alternative solutions that will best tailor to your business.
Most importantly, you DO NOT need to be physically here! We work closely with our trusted bankers to give you a higher success rate in opening a corporate bank account.
Financial institutions in Singapore include DBS, UOB, and many more as listed below:
Here are the 3 steps:
How long does it take to open a corporate bank account?
The process to open a corporate bank account in Singapore takes between 2-6 weeks, depending on the bank and the compliance checks. In some cases where the banks require more information or more documents, the process can take more than weeks.
If you are a foreigner opening your corporate bank account from overseas, you should to consider some professional advice. It’s a different world from back in 2018 when opening a corporate bank account used to be just an administrative procedure and a matter of a couple of days. Paul Hype Page specialises in assisting foreigners to set up their companies and run their businesses in Singapore. Approach us to discuss your bank account opening.
There are three types of banks in Singapore: traditional local bank, traditional foreign bank, and digital bank.
Yes. You can open a corporate bank account with any bank located in Singapore.
Digital bank is generally safe in Singapore.
All documents submitted must be in English. For all non-English documents, the company must ensure all documents are translated into English by an official translator and certified by the directors of the company who are to sign on every page of such documents.