DOING BUSINESSES IN

SINGAPORE

January 12, 2022

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited
by guarantee, and forms part of the international BDO network of independent member firms.
With You Today

ANDY GIBSON EVELYN LIM LARRY MIAO (MODERATOR)

National Tax Office Leader Executive Director, Tax Advisory Managing Director, National Tax
BDO USA, LLP BDO Singapore Office – ASEAN and China Desk
BDO USA, LLP
agibson@bdo.com evelynlim@bdo.com.sg smiao@bdo.com

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Agenda

01 About Singapore

02 Regulatory Environment

03 Conducting Business In Singapore

04 Financial Reporting And Audit

05 Taxation

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01 ABOUT
SINGAPORE

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01 ABOUT SINGAPORE
Singapore

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01 ABOUT SINGAPORE
Why Singapore?

INTERNATIONAL GLOBALLY SKILLED PRO-BUSINESS

CONNECTIVITY COMPETITIVE WORKFORCE ENVIRONMENT
Over 20 FTAs / ECONOMY INSEAD’s Global World Bank’s Doing
Over 80 DTAs IMD World Talent Business Survey
Competitiveness Competitiveness 2020
Ranking Index 2020

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02 REGULATORY
ENVIRONMENT

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02 REGULATORY ENVIRONMENT
The Accounting and Corporate Regulatory Authority (ACRA)

 ACRA is the national

regulator of business
entities, public accountants
and corporate service
providers in Singapore
 All businesses must be
registered with ACRA via
BizFile+

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02 REGULATORY ENVIRONMENT
The Monetary Authority of Singapore (MAS)

MAS is the central bank of Singapore which

supervises and regulates all monetary, banking
and financial aspects of Singapore.

 As banker and financial agent to the Government, MAS promotes

monetary stability, credit and exchange policies conducive to the
growth of the economy
 There are no exchange controls and funds may be freely remitted
into and out of Singapore

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02 REGULATORY ENVIRONMENT
Other Government Agencies

MINISTRY OF MANPOWER ECONOMIC DEVELOPMENT ENTERPRISE SINGAPORE

(MOM) BOARD (EDB) (ESG)

 Formulate and implement
labour policies related to
workforce in Singapore
 In charge of
work/employment passes,
employment practices,
workplace safety and health
etc.
 Plan and implement economic
strategies to enhance and
sustain Singapore’s position as
global hub
 Responsible for sustaining
Singapore’s productivity,
growth and competitiveness
 Assists SMEs to achieve world-
class standards

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03 CONDUCTING
BUSINESS IN
SINGAPORE

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03 CONDUCTING BUSINESS IN SINGAPORE
Types of Business Organisations

SOLE PROPRIETORSHIP
 a business owned by an individual such
as a citizen, permanent resident or a
foreigner holding an employment or
dependent pass
 a sole proprietor has unlimited liability

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03 CONDUCTING BUSINESS IN SINGAPORE
Types of Business Organisations

PARTNERSHIPS CAN BE:

i) General Partnership
 May consist of individuals or companies
 Minimum 2 partners, maximum 20
 Not a separate legal entity, partners are jointly and severally liable
for the debts of the partnership

ii) Limited Liability Partnership (LLP)

 Partners of a LLP are not personally liable for the malpractice of
other partners in the firm
 Partner is personally liable for his own negligence and personal
misconduct
 Commonly used by professional firms and start-ups

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03 CONDUCTING BUSINESS IN SINGAPORE
Types of Business Organisations

PARTNERSHIPS CAN BE:

iii) Limited Partnership (LP)
 Consists of one or more general partners and
one or more limited partners
 Limited partners of an LP enjoy limited liability
but unable to take part in the management of
the firm
 The LP structure would appeal to investors who
wish to be “silent partners” in a business and
whose liability is limited to the extent of their
investment in the LP

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03 CONDUCTING BUSINESS IN SINGAPORE
Types of Business Organisations

COMPANY INCORPORATION
A business may be incorporated as:
 Private company limited by shares
 Exempt private company
 Public company limited by guarantee
 Public company limited by shares

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03 CONDUCTING BUSINESS IN SINGAPORE
Types of Business Organisations

BRANCH OFFICE OF FOREIGN COMPANY

 Foreign companies may conduct business in
Singapore by registering a branch office

REPRESENTATIVE OFFICE (RO)

 Foreign company may set up an RO in Singapore
to carry out market feasibility study,
promotional and liaison activities
 RO is not allowed to engage in any form of
businesses
 Approval to set up an RO must be applied and
usually granted for not more than 2 years

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04 FINANCIAL
REPORTING AND
AUDIT

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04 FINANCIAL REPORTING AND AUDIT
Financial Reporting

 Financial statements are to be

prepared in accordance with Singapore
Financial Reporting Standards (SFRS)
 Every company must appoint auditors
within three months from date of
incorporation unless exempted from
audit requirement
 For listed companies, annual general
meeting (AGM) must be held within
four months after the company’s
financial year end and annual return
filed within five months after the
company’s financial year end

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05 TAXATION

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05 TAXATION
Taxation System

Singapore’s tax revenue
collection consists primarily of
corporate income tax, personal
income tax, Goods & Services
tax, stamp duty and property
tax.
The Inland Revenue Authority of
Singapore (IRAS) is the main
government agency that levies
and collects all taxes in the
country.
Singapore adopts a territorial
basis for income tax. Therefore,
only income that is sourced from
or received in Singapore is
taxed.

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05 TAXATION
Corporate Income Tax

 Companies in Singapore are subject to

tax on income accruing in or derived
from Singapore and foreign income
received or deemed received in
Singapore from outside Singapore
 Corporate income tax rate is 17%
 No dividend or capital gains tax in
Singapore
 Dividends can be distributed to
shareholder tax-free
 Safe harbour rules for equity disposal

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05 TAXATION
Corporate Income Tax

TAX EXEMPTION
Foreign sourced dividends, foreign branch profits
and foreign sourced service income received in
Singapore by a Singapore resident company are
exempted from income tax if all the following
conditions are met:
 Income is subject to income tax in the foreign
country
 Income is remitted from a country with a
headline tax rate of not less than 15%
 The Comptroller of Income Tax is satisfied that
the tax exemption would be beneficial to the
Singapore resident company

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05 TAXATION
Corporate Income Tax

GROUP RELIEF
Singapore companies within the same
group are allowed to transfer current
year tax losses, unabsorbed capital
allowances and unabsorbed donations to
another company in the same group
provided the qualifying conditions are
met

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05 TAXATION
Corporate TAX
INCENTIVES
Income Tax

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05 TAXATION
Corporate Income Tax
TAX INCENTIVES
DEVELOPMENT & EXPANSION INCENTIVE
Seek to encourage Singapore-based
companies to move into high value-add
business activities and expand their
operations in the country
BENEFITS:
 Concessionary tax rate of 5% or 10%
ELIGIBILITY:
 Companies must meet quantitative and
qualitative criteria which include
employment created, total business
expenditure, commitment to grow
capabilities in the country
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GLOBAL TRADER PROGRAMME
Seek to encourage companies engaged
in international trading to establish
their trading base in Singapore
BENEFITS:
 Concessionary tax rate of 5% or 10%
ELIGIBILITY:
 Companies must have substantial
operations in Singapore and meet
stringent quantitative criteria
MARITIME SECTOR INCENTIVE
Seek to encourage international ship
owners and ship operators to
establish commercial shipping
operations in Singapore
BENEFITS:
 Tax exemption on qualifying
shipping income
ELIGIBILITY:
 Good track records and
demonstrable business plan on its
shipping operations in Singapore
05 TAXATION
Corporate Income Tax

TRANSFER PRICING
 Based on Singapore’s Transfer Pricing Guidelines, effective Year of Assessment (YA) 2016, Singapore
taxpayers are required to prepare transfer pricing documentations (TPD) unless they meet certain
conditions
 Effective YA 2019, Singapore taxpayers are required to prepare TPD if they meet any of the conditions
below:
• Gross revenue for the financial year is greater than S$10million; or
• TPD was required to be prepared for the previous basis period
 Taxpayers will need to have their TPD ready when filing tax returns and submit to IRAS within 30 days upon
request
 If taxpayers refuse to comply, a fine up to S$10,000 can be levied by IRAS
 Effective YA2019, a surcharge of 5% will be imposed on the transfer pricing adjustments made by IRAS

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05 TAXATION
Personal Income Tax

Individuals, whether citizens or non-

citizens, are liable to income tax in
respect of income accruing in or
derived from Singapore.

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05 TAXATION
Personal Income Tax: Resident vs. Non-Resident Individuals
RESIDENT INDIVIDUALS
 Singapore citizen or Singapore Permanent
Resident who normally resides in Singapore except
for temporary absences
 Foreigners who has stayed/worked in Singapore
• for at least 183 days in the previous calendar
year; or
• continuously for 3 consecutive years; or
 Foreigner who has worked in Singapore for a
continuous period straddling 2 calendar years and
the total period of stay is at least 183 days
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NON-RESIDENT INDIVIDUALS
 Income from an employment exercised in
Singapore which does not exceed 60 days are
exempted from tax
 The exemption does not apply to public
entertainers, professional and non-resident
director of a company
 Income from an employment exercised in
Singapore for more than 60 days by an employee
who is not tax resident in Singapore is taxed at
the higher of 15% or the progressive resident tax
rate
05 TAXATION
Personal Income Tax: Resident vs. Non-Resident Individuals

RESIDENT INDIVIDUALS NON-RESIDENT INDIVIDUALS

Chargeable Income YA 2017 onwards Taxpayer Tax Rate
On the first $20,000 0% Non-resident employee
15% or resident rates,
On the next $10,000 2% (excluding non executive
whichever is higher
directors)
On the next $10,000 3.5%
On the next $40,000 7% Non-resident partner, non
executive director, sole 22%
On the next $40,000 11.5% proprietor, professional
On the next $40,000 15%
On the next $40,000 18% Non-resident public
15% / 10%**
entertainer / athlete
On the next $40,000 19%
On the next $40,000 19.5%
** 10% on gross income if it is received for services performed in
On the next $40,000 20% Singapore and the amounts are due and payable between 22 Feb
2010 and 31 March 2022
Above $320,000 22%

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05 TAXATION
Taxation in Singapore

WITHHOLDING TAX
Withholding tax is applicable to the following payments made to non-resident companies:
 Royalty or other payments for the use of, or the right to use, any movable property
 Interest, commission or fees in connection with any loan or indebtedness
 Fees for the use of or the right to use scientific, technical, industrial or commercial knowledge or
information
 Fees for the rendering of assistance or service in connection with the application or use of such knowledge
or information
 Payment of management fees
 Rental or other payment for the use of any movable property
 Proceeds from the sale of real property by a non-resident property trader

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05 TAXATION
Goods & Services Tax (GST)

 Currently, the GST rate is 7%

 Businesses that exceed SGD 1 million taxable supply
are required to register for GST
 Once registered, businesses would be subject to
quarterly GST filing obligations
 With effect from 1 January 2020, overseas vendors
and electronic market-place operators providing
digital services to local customers will need to
register if:
• Generated revenue exceeds SGD 100,000; and
• Worldwide revenue exceeds SGD 1 million

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 Do you have any questions?

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With You Today

ANDY GIBSON EVELYN LIM LARRY MIAO (MODERATOR)

National Tax Office Leader Executive Director, Tax Advisory Managing Director, National Tax
BDO USA, LLP BDO Singapore Office – ASEAN and China Desk
BDO USA, LLP
agibson@bdo.com evelynlim@bdo.com.sg smiao@bdo.com

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This presentation has been carefully prepared, but it has been prepared in general terms and should
be seen as broad guidance only. The presentation content cannot be relied upon to cover specific
situations and you should not act, or refrain from acting, upon the information contained therein
without obtaining specific professional advice. Please contact BDO Tax Advisory to discuss these
matters in the context of your particular circumstances. BDO Tax Advisory, its directors,
employees and agents do not accept or assume any liability or duty of care for any loss
arising from any action taken or not taken by anyone in reliance on the information
in this publication or for any decision based on it.

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