Congratulations, you’ve registered your company! The journey has just started. You now need to make sure that your operations are compliant with local regulations. The best way to make sure you cover all the bases is to have professional support- a local company secretary familiar with local compliance. This article goes through the top 6 things you need to keep an eye out for.
1. Opening a Company bank account
To commence the business, one must first open a Company bank account. In lieu of the current pandemic situation, most bankers in Singapore have opted to operate electronically, this also includes opening a bank account virtually. Some of the banks that have started this practice are Aspire Digital Bank, OCBC Bank and DBS Bank. However, there are still banks who prefer to go the old-fashioned way and one of it is UOB Bank. Despite needing to be physically present in Singapore, opening a bank account is smoother by a face-to-face basis.
The documents needed to initiate the bank account opening will be as follows:
Director’s latest passport
Signed contracts with potential clients
Some bankers might need more supporting, depending on the nature of business one Company operates. The timeline to open a Company bank account will be 3 weeks to 1 month. Some might take more time, depending on the supporting needed by the banker.
Despite the attempt to ease the bank account opening procedure, bankers have also tightened their internal policy to ensure all bank accounts adhere to the compliance. This is to mitigate the issue of money laundering occur in the country. You may read further via this link:
It has been a practice worldwide to start working remotely to adapt with the pandemic situation. Nevertheless, there are still situation where having a physical presence is more practical for some industry. Hence, the existence of office space services has helped these industries to cope with having to pay a minimum cost of office rental annually.
Then, to continue supporting the economy growth in Singapore, hiring local is definitely something to consider. The local qualifying salary in Singapore starts from SGD$ 700 to SGD$ 1,400. As for the CPF contribution, the range is between 17% to 20% depending on the age of the employee.
3. Getting the right work visa
Once Company bank account is opened, the Company is now ready to commence its business and start employing staff. The Covid-19 pandemic has left a huge impact worldwide, and this also includes Singapore work force. The Ministry of Manpower (MOM) has decided to tighten the Fair Consideration Framework (FCF) that sets out the requirements for all employers in Singapore to consider each candidate fairly for any job opportunities. MOM also expects the employers to adhere to the Tripartite Guidelines on Fair Employment Practice. These changes signify MOM’s ongoing commitment to continue promoting the development of a strong Singaporean workforce.
One of the key criteria of FCF is advertising the job position in MyCareersFuture. This way, the Company is able to promote fair employment practice and improve labour market transparency. The job advertisement needs to be open for at least 28 consecutive days for potential candidates to apply and will be available for work visa application purpose for the next 3 months.
There are many types of work visa available in Singapore. However, the preferred one that allows foreign professionals, managers and executive to work in Singapore is an Employment Pass. An employment pass holder is permitted to start a business in Singapore, hassle free. The monthly salary for an EP holder starts from SGD$ 4,500. However, a more experienced candidate qualifying salaries will be raised correspondingly and remain at a double the minimum qualifying salaries for younger candidates.
Some of the documents and information needed to apply for an EP are as follow:
Background information of the candidate
Signed contracts with potential clients
4. Business License
There are certain types of business activities that require a business license issued by the Singapore government agency. Some of the industry-specific business that high likely requires a business license are retail, construction, trading activities and setting up a hotel. Even though establishing a business in Singapore is relatively straightforward, however, the business licensing procedure can be complicated, assuming you do not have the sufficient documentation needed. Fear not Singapore government agency tend to simplify the procedure for business owners and all the information needed can be found in the related agency website.
5. GST registration
In Singapore, not all Company is compulsory to be GST registered. If the Company’s taxable turnover is more than SGD$ 1 million by the end of the calendar year, or they are expecting a turnover exceeding SGD$ 1 million, then it is compulsory to register GST.
A Company may voluntarily register for GST if they satisfy the following:
Business makes taxable supplies
Business makes only out-of-scope supplies
Business makes exempt supplies of financial services
Business procures services from overseas service providers
In order to initiate the GST registration, the Company must first complete the two e-learning courses which are “registering for GST” and “overview of GST”. This is to ensure that the Company understands the lying circumstances of registering GST
6. Company’s annual requirements
In Singapore, private limited Companies are expected to file its annual return with ACRA and Company tax filing with IRAS. To do that, preparation of financial statement is a must. Based on the Company’s financial activities during the accounting year, a financial statement must be prepared in accordance with the Financial Reporting Standards of Singapore. To ensure the financial information are accurate, monthly bookkeeping is highly recommended. Engaging with a third-party account system provider is one of the prospects you may consider. This is to ensure all invoicing, quotations and bookkeeping are kept in order.
Most small medium entities are exempted from auditing their financial statement. However, if the Company meets any 2 out of 3 from the conditions below, they are required to have its financial statement to be audited:
Total annual revenue exceeds SGD$ 10 million
Total assets exceed SGD$ 10 million
Has more than 50 employees
Once the financial statement (both audited and unaudited) is prepared, the Company will then need to hold an annual general meeting (AGM). This is so the board is able to present the accounts prepared and pass the resolution approving said account before the appointed Company secretary can proceed with the annual return filing.
It is a mandatory for all Singapore registered Companies to lodge its annual return in ACRA. Particulars of the Company’s officers, registered address and auditors (if applicable) must be updated in the annual return.
Finally, Company annual tax filing with IRAS. Compare to other countries worldwide where the annual tax return must be filed 30 days after the financial report is signed, it is slightly different in Singapore where its annual tax return is expected to be filed with IRAS by 30th November ever year. Singapore adopts the preceding year basis for taxation.