Who can open a Corporate Bank Account?
In Singapore, not everyone can open a corporate bank account. People who have incorporated a company in Singapore may start one. Every business owner in Singapore, regardless of what type of business entity they own, is very much advised to do so. Any of the company’s directors may also open the account in the company’s name. Authorized signatories are also allowed to start a corporate bank account. Authorized signatories are people who have been appointed to operate and manage the account. The list of names of a company’s authorized signatories is to be placed in the company’s board resolution.
One does not have to be a Singaporean citizen to open a corporate bank account in Singapore. If a foreigner fulfills the criteria required to open such an account, the foreigner may proceed to do so. A foreigner who is either one of the company’s directors or authorized signatories is also permitted to start a Singapore corporate bank account.
Corporate Bank Account Laws in Singapore
Singapore has some of the world’s strictest laws about banking. This is also true when corporate bank accounts are considered. All banks in Singapore are required to closely check and monitor all the bank’s potential clients before any of the clients may open a corporate bank account.
There are two reasons why this step must be taken. The first reason is that it will protect the clients from the effects of a potential default. The second, and more important, the reason is that it is one way that banks adhere to the country’s strict laws regarding money laundering and regulatory compliance. This is because doing so will help the Singaporean government oppose the financing of terrorism and prevent any questionable or illegal transactions.
Singapore’s Banking Act also ensures that any exchanges of tax information will be conducted appropriately and carefully. The Banking Act allows Singapore banks to exchange information when issues such as deliberate evasion of taxes arise. However, to protect the privacy of clients who have not broken the law, no inquiries from private institutions or any other unauthorized parties are legally permitted. The only ones which can be made are those by public institutions. These public institutions must also support their inquiries with reliable and relevant documentation which may prove that the person involved has indeed broken the law. Singapore’s laws on banking secrecy ensure the personal and financial safety of all law-abiding bank clients in the country. Therefore, opening a corporate bank account in Singapore with a Singapore-based bank has many more advantages when compared to doing the same in another country with a bank based in that country.
Singapore’s corporate bank account laws have been at the forefront of much publicity recently. This is because of a recent rise in crimes committed using illicit Singapore corporate bank accounts. Such accounts are often used as conduits for the channeling of illicitly received funds. For this reason, it has become extremely important that all banks in Singapore work in tandem with the Monetary Authority of Singapore (MAS) to uphold the high standards of the country’s financial institutions so that they continue to be viable options for anyone planning to open a corporate bank account there.
Common Reporting Standards (CRS)
In Singapore, just as with anywhere else in the world, all banks must adhere to the Common Reporting Standards (CRS). CRS is a set of global standards which enable the exchange of financial account information regarding account holders who are tax residents of any of the tax jurisdictions involved. Singapore is one of these tax jurisdictions. CRS is promoted by the Organization for Economic Co-operation and Development (OECD).
Financial institutions in Singapore must conduct due diligence so that the tax residence of all account holders in the country can be verified. Some of these account holders may be required to submit a CRS self-certification. This is because they may have information about tax residency status requested of them. Those who are tax residents of countries which are part of financial account informational exchange agreements with Singapore will also have this information relayed to the Inland Revenue Authority of Singapore (IRAS).
To submit a CRS self-certification online, one needs the following: a valid debit card, ATM card, or PIN; an NRIC or passport number; and supporting documents, should any be required. After submission is completed, the person who submitted the self-certification should receive a notification letter from the relevant bank in due time.
CRS has also influenced offshore banking. The standards which CRS has imposed mean that all offshore banking transactions conducted must be completely transparent and legal. CRS has caused some banks to be less likely to open a corporate bank account for a foreigner, regardless of where the bank is based. It has also increased the degree of difficulty involved in opening an offshore bank account, whether it be personal or corporate. This is because part of the reason that CRS was introduced was to counter those who choose to evade taxes by opening offshore bank accounts. For this reason, it might be more advisable for someone who opens a Singapore company to open a Singapore corporate bank account instead of an offshore one.
There are many reasons why Singapore has become one of the world’s leading financial and banking centers. For a country to become a global banking hub, it is highly important that banking and financial regulations there are sound. Singapore has some of the most stringent banking laws in the world. Furthermore, the processing time for the opening of a corporate bank account is short. When opening a corporate bank account in Singapore, one only has to be prepared with all necessary documentation. If such is the case, the person opening the account ought to be able to have it approved within a short period of time. These are just some of the reasons why financial institutions in Singapore are respected all over the world. Therefore, opening a corporate bank account in Singapore is likely to prove to be an excellent decision.
Should you plan to open a bank account in Singapore, you may call upon our expertise to ensure that the entire process is smooth and quick. Our financial experts at Paul Hype Page & Co will see to it that every step taken is also in accordance with Singapore banking and financial laws.