The importance of proper company incorporation
Many foreign entrepreneurs register Singaporean entities to give their operations an international legible face when dealing with government agencies, oil and gas companies, the Singapore Stock Exchange, and the Intellectual Property Office. Fine-tuning the process of establishing a new firm is usually painless once an entrepreneur establishes their objectives. During the incorporation process, a legitimate, professional support network can both register a company and provide it with all of the necessary infrastructure, licenses, and subsidiaries.
The market demands that a firm be properly established to be taken seriously, particularly when doing business with larger companies. This does not have to be a complicated process. Due to its advantageous tax and legal environment, Singapore is regarded internationally as one of the best places to start a new firm. Singapore maintains a consistent regulatory environment without many of the pitfalls found in other countries.
Choosing the right legal framework for a firm is of the utmost importance. If an entrepreneur has the right strategy for their legal structure, a lot of the incorporation overhead will be reduced as opposed to trying to do things off-the-cuff. There are many different reasons for forming a legal entity in Singapore, from personal liability protection to eligibility for tax incentives.
Starting a business in Singapore can be an opaque process for the uninitiated. Incorporation requires a number of legal documents, licenses, and approvals that may seem daunting to new entrepreneurs. That having been said, failure to address these concerns properly can lead to costly problems down the road. From incurring government fees and fines to unwittingly hiring illegal employees, there are many pitfalls for small firms that are not properly established.
Benefits of starting a company in Singapore
At the heart of the country’s success are its liberal laws, low corruption, agreement with their trade partners, low tax rates, efficient and transparent public services, vibrant research environment, availability of highly trained workers, and a structured financial market. The exemplary support of the Singapore government is seen in the establishment of the Action Community for Entrepreneurship or ACE. ACE’s vision is to drive innovation, create successful entrepreneurs and value-adding new enterprises that will be of benefit to Singapore and beyond. Furthermore, the Monetary Authority of Singapore (MAS) partnered with the info communication authority of Singapore (IDA) to launch the Singapore Fintech Festival, which showcased Singapore’s unique infrastructure and innovation in blockchain technology, artificial intelligence, online and mobile payment, robo-advisory, cybersecurity, and others. With these government- and stakeholder-led opportunities, Singapore is definitely the right choice of destination for individuals looking to start a company in Asia.
From doing business to living and working, Singapore has earned a leading reputation as one of the best destinations in the world. For four years and running, the World Bank has honored the Lion City as the No. 1 city for ease of doing business. In addition, the city-state landed the No. 1 position on the Financial Times’ World Investment Report as a result of attracting the most valuable foreign direct investments in the world. According to the 2016 Legatum Institute Prosperity Index, Singapore is the most prosperous and developed nation globally. It is also one of the friendliest countries for entrepreneurs and businesses. The World Economic Forum (WEF) consistently rated Singapore as the leading Asian country for global competitiveness.
Overview of the incorporation process
Incorporate Private Limited Company in Singapore – Timing The whole process takes roughly 45 minutes during active hours (9 a.m. to 6 p.m. UTC+8). After that, necessary further due diligence and update your company proof documents, such as share certificates, director consent, etc. For example, if you submit to the Singapore governmental registry at 10:30 a.m. on a workday, you can expect to receive email updates on the state of your application for the rest of the day. If there is no further due diligence for us to process, you can receive email verification of your company’s successful registration and updated BizFile within the same working day. If there is no further due diligence for us to process, you can expect to receive email updates on the successful registration and pay additional fees to get your company proof documents within 6:30 p.m. (UTC+8). Some applications could be subject to additional reviews which could lengthen the time needed to approve.
Incorporate Private Limited Company in Singapore – Requirements To incorporate a private limited company in Singapore, you need:
– At least one shareholder (part of which can be the director itself) to hold at least one share with a minimum value of S$1.
– The appointment of at least one resident director, that is, a local Singaporean, permanent resident, or EP holder.
– The appointment of at least one company secretary within 6 months of incorporation.
– A local registered office address in Singapore. An individual or a company can act as a shareholder.
A natural person or corporation can also become a company director, company secretary, or shareholder directly without the requirement to apply for any special type of permission. This means that there is no restriction even for having 100% foreign ownership of the company.
Preparing for Incorporation
Execution is key to success, but for things to work out, in this phase, you need to understand to whom you are executing. This understanding should, among many other aspects, identify who the clients of your product are, how to get to them, what resources are required, and what potential barriers there may be. A little more thought about the business model and a minimum viable product (MVP), which will guide the startup through this process, and the foundations will be set for it to take its first steps. With regards to the business plan, don’t worry if you don’t yet know if all the information – it’s always a work in progress. You should worry mostly about the moving part of each idea, how it impacts and is impacted by other broader or periodical motions, and its robustness. A good plan is not the one that starts describing your product and the market, but the one that systematically identifies the why’s – the independent, dependent, and controlled variables of your company, and articulates them in a way an investor or partner understands what to expect from you in terms of return on investment.
By this stage, you should already have an idea in mind, a business model, and are working on a name for your startup. At the same time, you are still at the very early stage of your idea, which may eventually succeed and flourish or die unceremoniously in a few months. A great idea is millions of steps away from being a great product, and a strong company is reliant not just on a fantastic product but also on a well-planned business model and flawless execution. The process of starting up involves understanding the market bodies, local and international regulations, and responding accordingly to its participants. Thus, it’s wise to take this stage in two phases: one on the market and another one on building what you are getting ready to capitalize on.
Defining your business idea and objectives
Why is it essential to stick to the truth, if information presented in a business plan are predictions? Because this document will be used and analyzed by potential investors, which are financial market professionals, highly experienced in the sector. If they identify positive financial simulations, but with a biased and unrealistic basis, they will delegate and the entrepreneur will lose a great opportunity to leverage his or her business.
All information necessary for an investment arrangement has to be on the business plan: demographic studies, market research, risks and threats to the business, among many other issues. However, what will draw attention in it is the realism and honest data presented. Although the business plan makes use of forecasts and expectations, it is essential to rely on consistent and real information.
With the business idea defined, it is time to write it all down. Creating a business plan allows setting goals, objectives, and expectations in the medium and long term. It is also necessary for the definition of corporate strategies that will guide activities in order to achieve it. In the business plan, the entrepreneur anticipates the business’ chances of success, the feasibility and the financial resources needed to make it possible, and the elements capable of seizing potential investors’ interest, influencing the company’s development and success.
Start now: The first weeks and months are very likely to be hard. Plan finances and efforts to dedicate yourself to the business from the beginning. This is what will define whether you will make it happen or give up to the first brick on your way.
- Determine how your competitors act and how you’ll make them irrelevant: It is unlikely that what you are idealizing is all new. This is good because this means that there is a market for it; but it is also bad because you’ll have to forge your way on it. Observe those who already serve the clients you aim at and decide how you can do better than they do; how you can shock and lead them out of the option list people have when it comes to making purchases.
- Plan your first round of clients: At first, you will need to let the world know about your business and try to attract your first buyers. Estimate costs and deadlines to do this properly once your product is available for purchase.
- Be realistic: It is not because there is a trend for something that you will go on and succeed doing the same. Be rational, what you are thinking about doing has to blow people’s minds – and, who knows, last for at least 3 years.
- Be aware of your passions: It sure is a lot about profitability, but you have to have an interest and be willing to be involved in something. If you like to notice trends in fashion, think about businesses related to it; if you like food, think about markets that could come about in the next years. This is not some kind of guarantee of success, but it is very likely that you will stumble through when things are hard and when it’s really hard, you won’t give up.
- Be bold: Aim at something relevant, with a distinct value, a strong proposition. Tilt the scale on your side, as what you believe and intend to offer has to make it worth taking the new company off the ground.
If it is not the case yet, you have to decide on a business idea. It can be anything: from producing paperclips to starting up an e-commerce marketplace; from offering services to selling products. Five important points to keep in mind to devise a business idea and start a company are:
Conducting market research and analysis
You need to stand out with a unique selling proposition. Qualitative market research could help you find out if your customers are willing to buy the product or services that you offer.
Acquire the necessary skill to make you an expert in what you’re selling. The company provides a service or sells a product. If the service is not delivered as promised or the product does not function properly, you would have just ruined the company’s reputation in one delivery. This is an instance of why the need to be professional or an expert in the field is strongly recommended before going into entrepreneurship. Gain the skill early so that you do not fall off with competitors.
TIP: E-commerce is a growing sector, and customers have more opportunities to buy goods today than at any other time in the past. If you want to be successful with your concept, revisit how frequently the business within the sector is patronized and learn from others who launched similar businesses in the past.
Knowing that the lifestyle of the people and their spending power would greatly have an impact on the survival of your business, conduct enough surveys to know how best to make the business run sustainably.
Make sure that the operation of the company falls under the Ministry of Trade and Industry’s list of business activities that can be carried out without requiring a written approval or license.
Figure out who you’re selling to. You cannot sell to everyone. Be specific about who benefits most from your product or service, and be sure that you clearly communicate that you sell to them—that’s known as defining your target audience (also known as your target market, ideal customer, among other terms).
Before you invest the time, money, and effort that goes into starting a business, you need to find out if there’s a need for what you’re offering. Assess the demand by consulting industry reports, interviewing potential customers, and finding out who your competitors are and the quality of services rendered.
Developing a business plan
A business plan doesn’t just follow some formula and should be unique to the particular startup. A generic plan would not engage the reader as much as a unique plan because it fails to convince the reader why this particular business and this particular team are the ones to get this job done. It typically details the nature of the business and how it is differentiated from competitors, the background of the entrepreneur, the management team, financial projections for the forthcoming years, creating a strategic plan, and an exit strategy. First-time entrepreneurs might feel that a business plan is something that only big startups or big corporations need, or realize that this new startup is a case sufficiently argued in the form of a slide deck or an executive summary. This is far from the truth. A business plan is as much needed by a tiny single entrepreneur as it is needed by an expanding multi-million dollar corporation. Yet, certain elements of the business plan should change to accommodate the evolving business model.
A business plan is crucial for convincing a range of interested parties that your business has a viable proposition. Such interested parties could be a future investor or a potential business partner. A business plan provides the necessary information to satisfy the interested party that the proposed business can meet their needs in the most efficient way. Some of the questions commonly asked by potential investors include how much money is the opening company hoping to raise, what will it be used for, in which areas and for how long, who else is investing, and when will investors see an attractive return? The amount of your investment that the potential investor can reasonably anticipate, and importantly, how they will get it back.
Identifying the legal requirements and regulations
Incorporating a business does not happen in a vacuum; in every part of the world, businesses have to meet certain standards that the government has put in place to ensure that everyone is playing fairly. Long gone are the days when the government’s control over the corporate world was purely for tax purposes. There are now numerous requirements to help keep the public safe, maintain the local labor force, and ensure that there’s anti-money laundering enforcement. It takes less than half an hour to form the company in Singapore and make it operational. The steps to form the company can take from 3 hours onwards – depending on the preparedness and also on the various requirements that need to be met. The first step during this phase is to identify the requisites. Some of the common requirements are: Identifying the Business for Entrepreneurs, Legal Requirements to Start a Company in Singapore, Readiness Factors for Entrepreneurs.
Congratulations! You have crossed a major milestone in starting a company in Singapore. By now, you probably have identified something worth pursuing, and you are now seeking to understand what it takes to make it real. Acknowledge the work you’ve committed to making it real – coming up with an idea and seeking to pursue it is actually the easiest part of the journey. The meeting of the requisites to legally form the company is the next step, and it will be critical in defining the first few years of your business.
Company Incorporation Process
For every person involved in the company, a word of caution—company incorporation is an attempt that is not to be taken lightly. You have to dedicate much time and thought to it. This well-thought-out creation procedure of the company is a mandatory approach and not just any random decision. Therefore, if you are an individual fulfilling the position of director and/or shareholder of the company, read this step-by-step guide to gain a greater understanding of the process. This will allow you to decide if it is better to create it on your own or to undergo a simpler company incorporation method using a compulsory or professional company incorporation company in Singapore.
Once you have decided to incorporate your company (i.e., to provide for its legal presence as a separate entity), you will need to issue several checks as part of the company formation process. Don’t worry—this is completely normal. Authorized payments such as professional fees, ACRA application fees, and others as detailed below will have to be made to enable the smooth incorporation of your private limited company. To get things started, this article will describe the detailed process of incorporating your Singapore company for you. We will go through the whole journey of establishing your company, phase by phase, to ensure everything is a good, smooth experience for aspiring entrepreneurs, just like you. The first step in company incorporation Singapore is to gather all necessary documents and information.
Choosing the right business structure
Subsidiary is not exactly a type of business structure, but is instead a description given to a company that is a wholly-owned subsidiary of a different company. In Singapore though, the phrase is used interchangeably to mean a company that is incorporated in Singapore but whose shareholders are foreign companies. Preferential treatment can be given to companies formed as a subsidiary of a foreign company under tax treaties.
Private Limited Companies require 1 to 50 shareholders and shares can only be transferred privately. The ‘Limited’ part of a Private Limited Company is a testament to the limited liability its shareholders have. If your EXCO comprises of professionals or if you are attempting to attract talent by offering part ownership, a Private Limited Company would be the entity of choice. A Private Limited Company generates its own unique set of audit, reporting and governance rules due to its separate legal identity from the shareholders.
Limited Liability Partnership (LLP) is typically set up to practice professions e.g. doctors, lawyers, architects or accountants. One of the advantages of LLP is that it provides limited liability benefits to its partners. The LLP itself is a separate legal entity which is responsible for the business debts and liabilities to the extent of its assets. The management of the LLP lies with the partners themselves despite having a separate legal identity. The partners however, do not have personal liability over the acts of the other partners.
Limited Partnerships have at least 2 partners, the general partner (GP) and the limited partner (LP). It is sometimes viewed as a hybrid business entity with some features of a LLP and some of a private limited company. The secret of the LP is to avoid any management or control of the LP to retain limited liability. If you are familiar with the concept of shares, the limited partner’s capital in the business is equivalent to the idea of shares but with limited liability.
Partnership, as the name suggests, is when a business is operated by two or more people. This is another easy to set up general business structure and is generally related by the ‘Partnership Act’. It comes with its own set of risks as the affairs are governed by the Partnership Act. Therefore, the Tax obligations fall on the individual partners according to the Income Tax Act.
Sole Proprietorship is the simplest and easiest to set up. When you are starting up your business on a low budget and low risk, this is the most common business structure of choice. It is a one-man show and is by far the most flexible business structure you can choose. While it is easy to set up, you therefore do not have a separate legal entity and as a result, personal assets are at risk in the event the business cannot pay its debts.
More types of business structures include societies (cooperative societies), limited partnerships, stat boards and trusts – but they cater to a different group of entrepreneurs and lie outside the manifesto of this article. Your decision will be predominantly influenced by the type of business you are looking to start and how much risk you believe your business will be exposed to. It is also worth noting just how important this business structure decision is as it can have financial and legal implications on your personal assets. For example, the difference in the legal risk exposure of a person running a Sole Proprietorship versus a Private Limited Company.
The first and most important decision you will need to make is the choice of the business structure. The business structure type chosen has tax and legal implications on your business and any stakeholders involved.
Registering the company name
Once you have a unique enough name, you should reserve it before making the actual name application. Most company name reservations are approved in 1-2 days, although the final approval can take up to 60 days. Be prepared for some back and forth with ACRA. For example, the strictness of the word “Pte,” which stands for “Private,” varies and you might have to tweak it at ACRA’s request. A company’s letterhead must also include its registration number. With the basics out of the way, let’s get to the point where it actually starts to feel like we’re starting a business.
Once you have your company’s name sorted, the next step is to register it with ACRA. If you’re unsure whether the name you’ve picked is already in use, do a company name search. Be sure to have a few alternative names in mind as a precaution. Some of the criteria that ACRA requires for company names are: – Must end with “Limited” or “Ltd.” – Cannot be vulgar or rude – Cannot infringe on any trademarks; and – After accounting for confusion from similarly named companies.
Obtaining necessary licenses and permits
Another good resource that will give you information about what you need to do to start a business in Singapore is the Asean Services Portal for Service Providers. Not only will it respond to questions about what licenses and permits, including qualifications needed to provide professional services in Singapore, it will also provide a summary of pertinent trade agreements, rules and regulations as well as prerequisites and contact information for professional accreditation bodies in Singapore. Finally, it can provide some information about employment laws. If you employ even a single person in your business (which includes you, the owner of the business), the employer must inform the Ministry of Manpower within 12 days after that employment starts of who that person is, how much you are paying them (which gives all kinds of information to make sure that the employer is meeting salary and tax withholding regulations, and then help to ensure fairness), and give a copy of an employment contract to indicate that the person was hired legally.
It turns out that you might need a variety of licenses and permits, depending on the actual type of business that you are starting, and it is important to find out as much as you can about specific requirements that are pertinent to your business type ahead of time, so that you are prepared in advance to make the necessary filings. In many cases, you will need to present a copy of this license or permit to the bank when opening a bank account. Bizfile, the online registration and filing system run by the Accounting and Corporate Regulatory Authority (ACRA), has an interactive questionnaire that will ask you about the type of business you are starting and tell you which permits you will need to apply for for your specific business.
Appointing directors and shareholders
Once the Memorandum and Articles of Association are signed, your company is considered incorporated or registered. The date of your company registration will be reflected as the date on the email from ACRA. Your incorporation package will be sent to you within 24 hours after incorporation. Your company incorporation Singapore certificate will normally be ready within one or two business days after submission. The electronic certificates are available for download after the company has been incorporated and the hard copy certificates will be sent to your registered office address within 3 to 5 business days after incorporation. Once you submit the information required (by yourself or with the assistance of a registered filing agent or third-party business services provider), it would take only a few minutes to incorporate the company (after the two rejected names approval), without the need for physical presence of directors/shareholders in Singapore.
For a private limited company in Singapore to be incorporated, you only need one shareholder and one director who is a resident here. A resident director is defined as “a person who is not a holder of an Employment Pass, Entrepreneur Pass or Dependent Pass/ Long-Term Visit Pass, and owner of the Employment Pass, Entrepreneur Pass or Dependent Pass/ Long-Term Visit Pass are not counted as local director.” At least one director must be a local director, which means that they are Singaporeans, Singapore Permanent Residents, or holders of Employment Passes. Each company should have a minimum of one shareholder and a minimum of one director. The same person can be both a shareholder and a director. Shareholders and directors can be of any nationality. There are no restrictions on foreign ownership, so the shareholder can be a Singaporean, a foreigner or a foreign company. The shareholder/member is the actual owner of the company. He/she/it holds shares in the company.
Drafting the company’s constitution
The second obligation, once the constitution is drafted, is that all the company’s members must agree to this document by signing a consent immediately after it is incorporated, hence including the provisions in the constitution would entail getting the buy-in of the members. The actual inclusion of the constitution constitutes no. 6 on the full incorporation application checklist. It is easy, therefore, for the startup to overlook this step during the company’s registration process. A constitution would outline the internal management of the company, including the rights and duties of the directors and to specify essential company procedures. It is, however, notable that a constitution is beyond internal company affairs; it must also deal with company regulatory and procedural duties along with important externalities such as protection of shareholders and creditors. The position of a constitution in a company can be viewed in terms of must or need since while ACRA does not necessitate the inclusion of any specific document in the incorporation process, need is stipulated in the Companies Act, which mandates ACRA to be notified of the coverage of the company’s constitution.
Your no. 5 item on the incorporation checklist should be to consider the content of your company’s constitution (‘constitution’). A company’s constitution serves to regulate the company’s affairs and the conduct of the company’s business, and while not mandatory, is usually included in an application for incorporation. The constitution is a public document and must be filed with ACRA at the point of incorporation and each time there is any update or change. The constitution does not need to be extensive. Rather, a company can adopt a simple ‘off the shelf’ document or alternatively, make a customized version, outlining the rules governing the company. Doing this, however, would set the stage for a well-ordered and controlled running of the business. It is simple to state the key elements that should be included in a company’s constitution; however, there are usually numerous options and flexibility in how these could be articulated.
Opening a corporate bank account
Proper planning is essential while setting up a company in Singapore. The company formation process can be seen as easy and fast, if you plan properly and take care of the legal requirements properly, else you can have a series of issues to solve, which can be expensive and nerve-racking. Remember to talk to a CPA well in advance too. They can help choose the right structure for your company and also for tax benefits and savings. They can give you advice in advance to reduce your tax load legally. Interview a few CPAs if necessary to get the best one for your business. It is very important to get the right structure and plan in advance, to avoid unnecessary taxes and charges when the company starts trading. With a proper plan, a company can be set up in 15 days and made ready for trading. With urgent attention and priority additional charges, this process could be shortened to less than 10 days.
After the incorporation of the Singapore company, the following step would most probably be to open a corporate bank account. As in other countries, most of the banks in Singapore offer this service. To open a corporate bank account (CBA), the nominee director(s) or the majority of the directors (in the case of non-bank signatory directors) and the majority of the shareholders will need to be physically present in Singapore to sign the necessary documents. The customer’s presence is compulsory for signature card opening and in most cases, the bank visit. If necessary, bank signatory services can be used for other services as well. Few banks also require the shareholders to be present if the bank signatory directors are nominee directors.
Post-Incorporation Obligations
For companies involved in supply of goods and services which exceed SGD1 million, it is necessary to register for the Goods and Services Tax (GST). GST is a tax collected on all supplies of goods and services in Singapore, as well as on the import of goods into Singapore. Companies are also required to register for GST if the company has reasonable grounds for believing at the end of any calendar quarter that its taxable turnover for the next 12 months will exceed SGD1 million.
All Singapore incorporated companies must prepare audited/unaudited/Exempt Private Company financial statements (known as AFS) in accordance with the provisions of the Companies Act. Every company is required to file its AFS with the Registrar within one month of its Annual General Meeting. An AGM must be held within 6 months (for a listed company) or 9 months (for a non-listed company) from the financial year end of the company. An AR is a summary of general company information, made up to the date of your company’s annual general meeting and must be filed to ACRA within one month of the AGM date.
It is important to note that once your company is incorporated, you are now required to comply with certain obligations. You should be aware of these obligations before you continue with the next step of starting your business. In Singapore, companies are required to prepare audited financial statements, conduct Annual General Meeting (AGM), and Annual Return (AR) filing, comply with GST, and meet company tax filing requirements.
Complying with annual filing requirements
As a resident company (i.e., one which remains incorporated in Singapore), if you do not receive notice of a requirement to file with the Inland Revenue Authority of Singapore (IRAS), you may be required to file a Form C by 30th November each year. Non-resident companies (i.e. those foreign companies which are registered with the Registrar of Companies to legally operate and maintain a place of business in Singapore), will be notified about any requirement to file a Form C. You are only required to submit an estimated chargeable income (ECI) return if your company’s income is taxable in Singapore i.e., accrued in or derived from Singapore. At the end of their financial year, all companies must prepare their estimated chargeable income (ECI) from a trade, business, or profession and submit it in an ECI form to IRAS within three months of the company’s financial year-end.
All local and foreign companies in Singapore have to prepare their financial statement according to the Singapore Financial Reporting Standards over a given time period, and the Annual Return is a summary of the company’s particulars, which includes the registered address, officers, and shareholders. The Annual Return should be lodged with the Accounting and Corporate Regulatory Authority (ACRA) within one month of holding the company’s AGM. The first AGM is required to be held within 18 months from the date of the company’s incorporation, and subsequent AGMs must be held at intervals of not more than 15 months. The financial statements of a company must be made up to a date not more than six months before the AGM.
Understanding tax obligations and incentives
With all these tax benefits, there are obligations to take. One of them is filing your annual income tax return – ECI (Estimated Chargeable Income). ECI is the business issue that represents how much profit the business can realize. A company is required to submit an ECI to IRAS within 3 months from the end of the financial year. If your company’s ECI is under S$1 million, there is no tax payable until a lump sum is requested by the government. However, companies that receive a lump sum must also submit ECI. The Inland Revenue Authority of Singapore (IRAS) expects business owners to make an accurate prediction or guesstimate of your company’s annual earnings (income). After your ECI has been filed, IRAS will send the company notification of the tax payable.
Income tax is the tax imposed on the income of both individuals and companies. In the case of companies, it could be in the form of corporate income, dividend income, and interest income. However, Singapore does not impose any tax on capital gains, and offshore income of companies is also not subject to taxation. For example, if your business is in Indonesia (activity producing goods or providing services) and you work outside Singapore, then surely you don’t have to pay taxes in Singapore. This applies to countries that have tax treaties with Singapore. One important aspect to consider is the international tax obligation. Under Sec 34 of the Income Tax Act, if your company is a Singapore tax resident company and derives offshore income, that income must be remitted to the resident company in Singapore. Moreover, for foreign source income transmitted to Singapore, it will not be subject to tax except core income derived from banking, insurance, or investment holding activities.
Managing employment and work pass matters
Foreign professionals and other workers intending to start their own business or practice their professions in Singapore will be subjected to different procedures for incorporation and work pass applications. The procedures are also different for spouses, children, and extended family members who are descendants or parents of the foreign professional. Complying with employment and work pass regulations may be bothersome; however, non-compliance will result in heavy penalties including a revocation of one’s work pass, levy non-compliance fines, and possible prosecution of the foreigners involved. The Ministry of Manpower (MoM) Singapore, together with the Immigration and Checkpoints Authority (ICA), are the governing bodies administering employment of foreigners in Singapore. These government bodies have a zero-tolerance policy towards non-compliance because Singaporeans and local Permanent Residents will be deprived of jobs, and the security clearance of the country will suffer.
In a bid to ensure that employers are not overly reliant on foreign workers, the Singapore government has imposed certain restrictions and levies on companies that hire foreign workers in Singapore. It is crucial that employers be educated about the taxations and levies they will be subjected to for hiring non-locals to avoid being stamped with penalties for non-compliance with regulations.
Implementing proper accounting and bookkeeping practices
Guidance on organization of accounting records and what are accounting standards Board in Singapore. Accounting record in which includes day-to-day entries of all the financial transactions. Minute books that properly document all decisions or resolutions made at director and shareholder meetings are required to be kept at the registered office. The Singapore Companies Act requires that the Statutory financial statements are also prepared in accordance with the accounting standards issued by the Accounting Standards Council (ASC), but the requirement applies only to companies limited by shares. Accounting standards in Singapore are overlooked by the accounting standard board of Singapore and are recommenders of these standards to the council.
The accounting records must also be retained in Singapore for 5 years from the end of the financial year in which the transactions occurred. Accounting records can be kept in electronic form as long as they are downloadable, printable, updatable, and capable of being saved. Work is ongoing to allow filing accounts using the current XBRL platform.
Company directors must keep accounting records to show the company’s transactions and to enable true and fair profit and loss accounts and balance sheet to be prepared from time to time. In addition, the accounting records must be kept at the registered office (or such other place as the directors think fit) and be retained for five years. The books must also be kept in Singapore or, for listed companies, such books must be prepared and kept in Singapore within a reasonable period (not earlier than three months after the transactions) and enable the financial statements to be conveniently and properly audited.