When looking to protect your assets and have flexible access to money, having access to overseas bank accounts can give you options. Singapore is renowned for its business-friendly environment, attracting entrepreneurs and corporations from around the world. Its strategic location in Asia, robust legal framework, and stable economy make it an ideal destination for foreigners looking to start a business. However, setting up a business in a foreign country can seem daunting. This guide provides a step-by-step approach to opening a business and bank account in Singapore as a foreigner.
Why Choose Singapore for Your Business?
Before diving into the process, let’s highlight some of the key reasons why Singapore is one of the top destinations for foreign businesses:
- Pro-business environment: Singapore offers low corporate taxes (17%) and a wide range of tax incentives. Learn more.
- Ease of doing business: Ranked as one of the easiest places to do business globally, with straightforward incorporation processes.
- Strategic location: As a hub for Southeast Asia, it offers excellent connectivity to neighboring countries.
- Political stability: Singapore is known for its transparency, low levels of corruption, and well-established legal system.
- Access to talent: The country offers a diverse and skilled workforce.
Step 1: Choose Your Business Structure
The first decision you’ll need to make is the type of business entity you want to establish in Singapore. The most common business structures for foreigners include:
- Private Limited Company (Pte Ltd): This is the most popular structure due to its limited liability protection, flexibility, and tax benefits. ACRA Guide.
- Branch Office: Suitable for foreign companies looking to extend their business into Singapore. However, branch offices do not enjoy tax incentives that local companies receive.
- Representative Office: This option is more for companies seeking to conduct market research or explore business opportunities in Singapore without engaging in profit-generating activities.
For most entrepreneurs, setting up a Private Limited Company is the ideal choice. It allows for 100% foreign ownership, limited liability, and access to various tax exemptions.
Step 2: Appoint a Resident Director
Under Singaporean law, every company must appoint at least one resident director. A resident director can be:
- A Singaporean citizen or permanent resident
- An individual holding a valid Employment Pass (EP) or EntrePass
- A Singaporean Employment Pass holder residing in the country
As a foreigner, you can appoint yourself as the resident director by applying for an Employment Pass or EntrePass, but you will need a local address for company registration.
Step 3: Register Your Company with ACRA
The Accounting and Corporate Regulatory Authority (ACRA) is the government body responsible for business registration in Singapore. You will need to follow these steps:
- Reserve a Company Name: Choose a unique company name and check its availability through ACRA’s online platform, BizFile+. Once approved, you can reserve the name for 120 days.
- Prepare the Necessary Documents: To register your company, you’ll need:
- A company name (approved by ACRA)
- Description of business activities (SSIC code)
- Details of shareholders, directors, and company secretary
- Constitution (previously known as Memorandum and Articles of Association)
- Registered office address
- Paid-up capital (minimum SGD 1)
- Submit Your Application: Once your documents are ready, submit the application via BizFile+. Typically, it takes about 1-2 days to receive approval if all documents are in order. The incorporation fee is around SGD 315.
After successful registration, your company will receive a Unique Entity Number (UEN), which is essential for opening a corporate bank account and other business activities.
Step 4: Apply for Relevant Work Passes
If you wish to relocate to Singapore to manage your business, you will need to apply for an Employment Pass (EP) or EntrePass. Here’s a breakdown of the two:
- Employment Pass: Ideal for foreign professionals, managers, and executives earning at least SGD 5,000 per month. You can apply for an EP after your company has been incorporated. Learn more here.
- EntrePass: Targeted at foreign entrepreneurs looking to start a new business in Singapore. Applicants must meet specific criteria, such as owning a business with innovative technology or receiving external funding. Learn more here.
Both passes will allow you to stay in Singapore and manage your business legally.
Step 5: Open a Corporate Bank Account
After registering your business, you’ll need a corporate bank account to handle your company’s financial transactions. Fortunately, Singapore has a range of international and local banks to choose from, including:
Here’s how to open a corporate bank account as a foreigner:
Requirements for Opening a Bank Account
Most banks in Singapore have similar requirements for foreign-owned businesses. You will need:
- The company’s UEN (Unique Entity Number)
- Identification documents (passport) of directors and shareholders
- Proof of company incorporation from ACRA
- Company constitution
- Resolution to open a bank account signed by company directors
- Proof of residential address of directors and shareholders (such as utility bills)
Some banks may also require a minimum initial deposit, which can range from SGD 1,000 to SGD 100,000 depending on the bank.
Remote Account Opening
If you are not in Singapore, some banks offer the option to open a corporate bank account remotely, although this often requires more documentation and a higher initial deposit. DBS and OCBC are among the banks that allow remote account opening under certain conditions. In most cases, however, you or one of your directors will need to visit the bank in person to complete the process.
Choosing the Right Bank
When choosing a bank, consider the following:
- Initial deposit requirements
- Monthly fees and transaction costs
- Foreign exchange rates if your business deals with international clients
- Internet banking and other digital services
- Support for multiple currencies
It’s often best to meet with a bank officer to discuss your business needs and assess which bank offers the most favorable terms.
Step 6: Set Up Your Accounting and Tax Structure
In Singapore, all companies must adhere to local accounting and tax regulations. Some key points to keep in mind include:
- Corporate tax rate: The corporate tax rate is a flat 17%, but new companies can enjoy tax exemptions on the first SGD 100,000 of taxable income for the first three years. Learn more about corporate taxes.
- Goods and Services Tax (GST): If your company’s annual turnover exceeds SGD 1 million, you must register for GST (currently 8%). Learn more about GST.
- Annual filings: Your company must submit an annual return and audited financial statements to ACRA and the Inland Revenue Authority of Singapore (IRAS). Learn more about annual filings.
For small companies, the compliance requirements are relatively straightforward. However, you may want to hire an accounting firm or tax advisor to ensure everything is in order.
Step 7: Obtain Necessary Licenses and Permits
Depending on the nature of your business, you may need to obtain specific licenses or permits from government agencies. Some industries with licensing requirements include:
- Food and beverage
- Healthcare
- Telecommunications
- Import/export businesses
Check Singapore’s Business Licensing Portal to see if your business requires any specific permits.
Final Tips for Foreigners Starting a Business in Singapore
- Hire a Corporate Secretary: Every Singaporean company must appoint a corporate secretary within six months of incorporation. This person ensures your company complies with legal and regulatory requirements. Learn more.
- Explore Tax Incentives: Singapore offers various tax incentives for companies involved in sectors like tech, finance, and manufacturing. Explore programs such as the Productivity and Innovation Credit (PIC) or Startup SG Tech.
- Consider Nominee Services: If you don’t have a local partner or cannot fulfill the resident director requirement immediately, you can hire a nominee director service to meet the statutory requirements.
Opening a business and bank account in Singapore as a foreigner is a relatively straightforward process, but understanding the legal and financial nuances is crucial for a smooth start. Singapore’s pro-business policies and efficient systems make it an ideal location for entrepreneurs from all over the world to set up and succeed.
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