All About Opening Company Bank Account in Singapore
Starting a Corporate Bank Account
Public policies and the growth of private companies have shaped the economic landscape of Singapore. Singapore has a leading financial industry with an established banking sector that can be trusted to handle various financial entities, investments, insurance policies, and other related products such as assets and stocks to meet the needs of people from all over the world. The country’s efficient banking system helps companies operate with regard to financial matters. The developed banking system in Singapore helps provide conducive conditions for economic activities in the country.
Definition of a Corporate Bank Account
Before discussing corporate bank accounts themselves and why they are important, the first matter to mention is the definition of a corporate bank account. A corporate bank account is a bank account which offers services meant for businesses and companies. This is the main factor that differentiates it from a personal bank account, a business checking account, or an investment bank account. Corporate bank accounts tend to have formalized requirements to be fulfilled before they can be set up. They cannot be considered to be a personal asset of the company’s shareholders. Despite this fact, many companies favor using a corporate bank account because they provide a high level of protection for the company’s assets. Often, no other type of bank account can give such protection.
Why Corporate Bank Accounts Are Important
Corporate bank accounts are extremely important to any Singapore company. Typically, the opening of a corporate bank account comes directly after the incorporation of a company. After this has been done, the next step to be taken is the opening of the corporate bank account.
By opening a corporate bank account, one will be able to clearly separate businesses finances from personal finances. Business finances include cash flow, business expenses, business assets, and the like. Doing so allows easier management of business finances. It also offers a greater level of protection from any possible corporate liabilities and prevents the interference of malicious creditors who might want to hold the personal account owner responsible for any debts the company may have incurred.
Opening a corporate bank account also allows for greater scrutiny of business performance. The account owner can look at just the records related to the business to get a clearer picture of how the business has been doing.
Requirements for Opening a Corporate Bank Account
Before anyone can open a corporate bank account, there are several documents which are needed. The following documents are highly important because without them, no one is able to open a corporate bank account in Singapore. They are as follows:
- Corporate Account Opening Form – has to be completed and duly signed by authorized signatories of your company.
- Board of Directors Resolution – an important document which states that the company may proceed to open the bank account. There is no need to prepare an additional letter. This is because most banks already have the format for it. Therefore, the only necessary step is getting the authorized signatures which are needed on the form. It is also known as a Corporate Resolution.
- Certified True Copy of Certificate of Incorporation –proof that the company has indeed been incorporated; banks need a certified true copy of the certificate of incorporation. Be mindful that only the company secretary or any one of the directors is allowed to certify this.
- Certified True Copy of Company’s Business Profile from the Company Registrar – again, this can only be certified by the company secretary or any one of the directors.
- Certified True Copy of Company’s Memorandum and Articles of Association – sometimes known as Articles of Incorporation.
- Certified True Copy of Passport/Singapore IC and Residential Address Proof of Directors, Signatories, and Ultimate Beneficiary Owners.
Although every bank has different requirements, these are generally the documents needed for one to open a corporate bank account.
Certain banks might also require the signatories to be present during the opening of the account. More information on the requirements from each individual bank can be received from the banks themselves. This information will also be helpful when making the choice of which bank’s services will be used. The bank which fits the company’s business requirements and needs should be the bank chosen for the account.
How to Select a Bank for a Corporate Bank Account
The bank that one selects for the purposes of a corporate bank account should be a bank which is able to serve all of one’s business needs. Banks in Singapore offer various services to corporations. Among the services offered by these banks include credit cards, multi-currency accounts, and trade financing.
The appropriate choice of bank depends on what the bank account owner wants from the bank account. Due to the intense competition between banks and financial institutions today, many banks offer attractive benefits for those who intend to open corporate bank accounts. Some banks even waive bank charges for certain processes for a given time. Apart from services offered, the amount required for the initial deposit as well as the minimum account balance that must be maintained need to be taken into consideration.
Of course, not all banks offer every service needed by any business. Therefore, the decision on which bank is to be used should only be made after proper research is conducted and a plan is carefully made. To find out more information about each bank, there are various forums and websites for customers to learn more. One could also go to a bank branch to speak to the customer service officer there or call them during opening hours. They should be able to provide assistance in the opening of a corporate bank account in Singapore.
Banks are not the only organizations which offer corporate services. At Paul Hype Page & Co, we can also provide you with any corporate services which your business may need. We will ensure that all your corporate needs are properly fulfilled to a satisfactory level.
Who Are Those Allowed to Start a Corporate Bank Account
In Singapore, not everyone is allowed to start a corporate bank account. People who have incorporated a company in Singapore may start one. In fact, 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 start 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 with regard to banking. This is also true when corporate bank accounts are considered. All banks in Singapore are required to closely check and monitor all of 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, 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, in order to protect the privacy of clients who have not broken the law, no enquiries 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 enquiries 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.
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.