Singapore

Singapore lies at the southern tip of continental Asia, and shares its northern border with Malaysia.

While Singapore is a city-state, its territory actually consists of 63 islands, including Pulau Ujong, on which its main urban centre is located.

Established by the East India Company in 1819, Singapore has grown from a trading post to an international business hub, home to thousands of organisations.

Operating as a parliamentary republic, Singapore is a stable and transparent democracy with low levels of corruption and a well-established judicial system.

Highly urbanised, there are few untouched natural environments in Singapore, while its climate is hot and humid with tropical levels of rainfall.

General Information

• Full Name: Republic of Singapore
• Population: 5.63 million (World Bank, 2022)
• Official Languages: English, Mandarin, Malay, Tamil
• Religions: Taoism, Buddhism, Islam, Christianity, Hinduism
• Monetary Unit: 1 Singapore dollar = 100 cents
• Main Exports: Computer equipment, machinery, rubber products
• GNI Per Capita: US $67,200 (World Bank 2022)
• Internet Domain: .sg
• International Dialing Code: +65

How Do I Say?

• Hello: Hello
• Good Morning: Selamat Pagi
• Good Evening: Selamat Petang
• Do You Speak English?: Adakah Anda Bertutur Dalam Bahasa Inggeris?
• Good Bye: Selamat Tinggal
• Thank You: Terima Kasih
• See You Later: Melihat Anda Kemudian

Dates

Dates are usually written in the day, month and year sequence. For example: 1 July 2018 or 1/7/18.

Numbers are written with a comma to denote thousands and a period to denote fractions. For example: SGD$ 3,000.50 (three thousand Singapore Dollars and fifty cents).

Singapore stands as a beacon of economic success and a global hub for businesses looking to tap into the vast potential of Asian markets. Renowned for its strategic location, robust economy, and political stability, Singapore offers an unparalleled environment for entrepreneurs and multinational companies alike. Here's why doing business in Singapore is not just an opportunity but a strategic move for businesses aiming for global expansion.

Singapore's prime location at the crossroads of major shipping and air routes makes it an essential gateway to Asia-Pacific markets. This connectivity is complemented by state-of-the-art logistics and transportation infrastructure, facilitating efficient trade and commerce. The city-state serves as a vital link for businesses looking to access emerging and established markets in Asia, offering a springboard into the region.

Celebrated for its pro-business environment, and transparent and efficient regulatory framework Singapore's  government's forward-thinking policies promote entrepreneurship, innovation, and foreign investment, making it one of the easiest places in the world to start and conduct business. Competitive tax rates, along with various incentives for startups and established enterprises, further enhance its appeal as a business hub.

Singapore's economy is known for its resilience, diversity, and competitiveness. With a focus on sectors such as finance, technology, manufacturing, and logistics, the city-state has established itself as a global economic powerhouse. Its commitment to free trade and economic integration is evident in its extensive network of Free Trade Agreements (FTAs), offering businesses in Singapore advantageous access to global markets. Singapore's vibrant ecosystem for innovation and technology is a magnet for businesses focused on cutting-edge developments. The government actively supports research and development (R&D), digital transformation, and technological innovation through grants, tax incentives, and partnerships between public and private sectors. This nurturing environment fosters advancements in fintech, biotech, clean energy, and smart technologies, positioning Singapore as a leader in future industries.

Singapore's commitment to ease of doing business is reflected in its straightforward company registration process, transparent legal system, and efficient governance. Foreign businesses find it relatively easy to navigate the regulatory landscape, set up operations, and integrate into the local economy, supported by various government agencies dedicated to facilitating business growth.

Investing in Singapore is not just an investment in a city-state but an entry into one of the most dynamic economic ecosystems in the world. Renowned for its strategic geographic location, robust economic performance, and unparalleled ease of doing business, Singapore offers a compelling proposition for global investors. 

Singapore's strategic position at the heart of Southeast Asia provides unmatched access to the burgeoning markets of the Asia-Pacific region. Its world-class port and status as a leading aviation hub facilitate seamless trade and connectivity, making it an ideal base for companies aiming to tap into the vast consumer and business markets of Asia. Singapore's government is famously pro-business, with policies designed to attract foreign investment and promote entrepreneurial activity. The country boasts one of the most competitive corporate tax rates in the world, alongside a plethora of tax incentives, grants, and financing schemes aimed at encouraging investment across various sectors.

Investors seek stability, and Singapore delivers with its consistent economic growth, low inflation, and strong fiscal policy. Politically, Singapore is among the most stable countries globally, with a transparent and efficient legal system that protects investments and intellectual property rights, offering a safe and secure environment for investors. Investing in Singapore opens doors not just to Singapore's economy but to the entire Asia-Pacific region. The city-state has signed numerous Free Trade Agreements (FTAs) and Investment Guarantee Agreements (IGAs), providing investors with preferential access to major economies, including China, India, and the ASEAN countries.

Singapore offers access to a highly educated, skilled, and multilingual workforce, capable of driving business success. The emphasis on continuous learning and development ensures a steady pipeline of talent, ready to meet the demands of a rapidly evolving global economy. The high quality of life in Singapore,is demonstrated by excellent healthcare, education, and safety, makes it an attractive place for expatriates and international talent. This vibrant, cosmopolitan society not only enriches the workforce but also contributes to a dynamic business environment.

Investing in Singapore means being part of an economy that thrives on openness, innovation, and partnership. The city-state's strategic advantages, combined with its forward-looking policies and commitment to sustainability, make it a magnet for global investors seeking growth, stability, and access to the Asian markets. Whether you're looking at direct investments, starting a business, or expanding your global footprint, Singapore offers a supportive and dynamic environment where your investments can flourish.

Singapore's strategic position as a global business hub makes it an attractive destination for Foreign Direct Investment (FDI). The city-state's political stability, robust legal system, competitive economy, and status as a gateway to Asia have garnered international attention from investors and businesses alike.

Government Incentives for FDI in Indonesia

Singapore's government has implemented a range of incentives aimed at attracting and facilitating FDI, ensuring that the country remains a competitive location for investment. These incentives include:

• Tax Incentives: Reduced corporate tax rates, double tax deductions for research and development (R&D), and tax exemption schemes for startups.
• Grants and Funding: Access to various grants and funding programs designed to support innovation, technology adoption, and expansion into international markets. Notable schemes include the Productivity Solutions Grant (PSG) and the Enterprise Development Grant (EDG).
• Ease of Doing Business: Singapore offers a streamlined process for business registration and provides a conducive regulatory environment that simplifies the compliance and operational aspects of running a business.

FDI Opportunities in Singapore

Singapore's economy presents opportunities for foreign investors, with particular emphasis on the following sectors:

• Technology and Innovation: Singapore is keen on becoming a Smart Nation, offering numerous opportunities in fintech, cyber security, artificial intelligence (AI), and other emerging technologies.
• Biomedical Sciences: The biomedical sector in Singapore is thriving, with opportunities in pharmaceuticals, biotechnology, medical devices, and healthcare services.
• Manufacturing: Advanced manufacturing, including precision engineering, electronics, and chemicals, remains a cornerstone of Singapore's economy, driven by innovation and sustainability.
• Green Economy: Singapore's commitment to sustainability opens up investment opportunities in clean energy, green finance, and sustainable urban solutions.
• Financial Services: As a leading financial center, Singapore offers vast opportunities in banking, insurance, wealth management, and fintech.

Government Bodies Supporting FDI in Singapore

Several government bodies and agencies in Singapore play pivotal roles in supporting FDI, offering guidance, resources, and assistance to foreign investors:

• Economic Development Board (EDB): The EDB is Singapore's lead government agency responsible for planning and executing strategies to enhance Singapore's position as a global business center. It provides comprehensive investor support and facilitates access to investment opportunities.
• Enterprise Singapore: This agency is instrumental in supporting Singaporean enterprises' development, helping them build capabilities, innovate, internationalise, and access global markets. It also assists foreign companies in setting up and expanding their operations in Singapore.
• Monetary Authority of Singapore (MAS): For investments in the financial services sector, MAS acts as the central bank and financial regulatory authority, ensuring a stable and progressive financial environment.
• Infocomm Media Development Authority (IMDA): IMDA promotes the development of the infocomm media sector in Singapore, offering support and incentives for companies investing in digital and media technologies.

Singapore's strategic approach to FDI, demonstrated by favorable government incentives, a wide range of investment opportunities, and dedicated support from government bodies, positions the country as an ideal destination for global investors. Whether it's tapping into cutting-edge technology, exploring the financial services landscape, or contributing to the green economy, Singapore offers a dynamic and supportive environment for foreign direct investment, paving the way for mutual growth and success in the heart of Asia.

It is not mandatory to make payments to employees or the authorities from an in-country bank account in Singapore.

Private companies must file their annual return within 7 months after the financial year-end.      

Banks in Singapore typically are open Monday to Friday, between 9:30 am and 3:30 pm. On Saturdays, they operate from 9:30 am to 12:00 pm.

Singapore is renowned for its streamlined and efficient process for business registration and entity setup, making it a top destination for businesses looking to expand into Asia. The city-state's regulatory framework is designed to support entrepreneurs and companies in their venture into the Singaporean market.

Types of Business Entities in Singapore

Sole Proprietorship

A Sole Proprietorship in Singapore is the simplest and most straightforward form of business structure, designed for individuals looking to own and run a business by themselves. This type of entity is particularly appealing due to its ease of setup and the autonomy it offers, allowing the business owner to make all decisions. However, it comes with the significant drawback of unlimited liability, which means that the owner's personal assets could be used to settle business debts or legal claims. The taxation for a sole proprietorship is applied directly to the owner's personal income, making the tax handling process relatively straightforward but directly tied to the owner's personal financial circumstances.

Partnership

A Partnership in Singapore is established when two or more individuals (up to 20) come together to conduct business. This entity allows for shared responsibility and resource pooling, making it a suitable option for small businesses that benefit from the collective skills, knowledge, and capital of the partners. Partnerships operate on the basis of unlimited liability for the partners, which means each partner can be held personally liable for the business's financial obligations. Taxation on profits is handled individually, where each partner pays tax on their share of the profits according to their personal income tax rates.

Limited Partnership (LP)

The Limited Partnership model in Singapore introduces a differentiation between general partners, who manage the business and have unlimited liability, and limited partners, whose liability is restricted to their investment in the partnership. This structure does not constitute a separate legal entity, and while it offers limited partners protection from personal liability beyond their investment, it requires at least one general partner to assume full responsibility for the partnership's obligations. Limited Partnerships provide a blend of partnership flexibility with a level of liability protection for certain partners.

Limited Liability Partnership (LLP)

An LLP in Singapore combines elements of partnerships and corporations, offering the operational flexibility of a partnership while granting its partners limited liability protection. This structure is recognised as a separate legal entity, meaning it can enter into contracts, own assets, and be liable for its debts independently of its partners. An LLP is ideal for professionals who wish to work collaboratively while protecting their personal assets from business-related risks. The liability of each partner is limited to their contribution, and the LLP structure is particularly favored by legal, accounting, and consulting professionals.

Private Limited Company

A Private Limited Company in Singapore is the most popular choice for businesses due to its scalability and the limited liability protection it offers to its shareholders. Recognised as a separate legal entity, it can own property, incur debt, and engage in legal proceedings in its own name. Shareholders' liability is limited to their share of ownership in the company, protecting personal assets from business liabilities. This entity type also enjoys corporate tax rates, which can be more favorable compared to personal income tax rates for higher earners. The structure supports growth and investment, making it an attractive option for businesses with medium to long-term expansion plans.

Public Limited Company

Public Limited Companies in Singapore are designed for large-scale operations with ambitions to raise capital through public investment. By listing shares on the Singapore Exchange (SGX), these companies can access funding from the public market but must adhere to rigorous regulatory standards and transparency requirements. This entity type offers limited liability to its shareholders and operates as a separate legal entity, capable of enduring beyond the involvement of any single shareholder. The transition to a public limited company is a significant step, indicating a mature business ready to navigate the complexities and advantages of the public financial markets.

Business Registration and Setup In Indonesia 

Appointing Key Personnel

Singaporean corporate governance mandates the appointment of at least one resident director and a company secretary within six months of incorporation. The resident director serves as the company’s representative in legal and regulatory matters, while the company secretary ensures compliance with ongoing regulatory requirements. This step underscores the commitment to maintaining high standards of corporate governance and operational integrity.

Registering for CorpPass and Singpass Foreign Account (SFA)

Digital identity is at the core of business transactions with Singaporean government agencies. CorpPass, the master digital identity for businesses, facilitates these interactions, making it indispensable for applying for permits and accessing services. For non-residents looking to manage their businesses remotely, obtaining a Singpass Foreign Account (SFA) is essential, ensuring seamless access to Singapore’s digital government services.

Acquiring a Unique Entity Number (UEN)

The Unique Entity Number (UEN) serves as the standard identifier for entities in Singapore, streamlining transactions with government agencies. Acquiring a UEN is a critical step, cementing your business’s presence and facilitating a multitude of regulatory and operational processes.

Registering with ACRA

The Accounting and Corporate Regulatory Authority (ACRA) is the cornerstone of business registration in Singapore. By utilising the BizFile+ portal, entities can complete their registration online, a testament to Singapore’s commitment to efficiency and ease of doing business. ACRA not only regulates corporate entities but also ensures public accountants adhere to the highest standards.

Compliance with the Central Provident Fund (CPF)

For businesses employing local staff, registration with the Central Provident Fund (CPF) Board is a prerequisite. Obtaining a CPF submission number allows for the necessary pension fund contributions, aligning with Singapore’s focus on social security and employee welfare.

Utilising the myMOM Portal

The Ministry of Manpower’s (MOM) myMOM Portal is a gateway for businesses employing foreign workers. It facilitates work pass applications and manages employment-related transactions, ensuring that businesses comply with Singapore’s labor laws and regulations.

Government Support and Resources

Singapore’s government extends its support to businesses through various agencies, including ACRA, the Economic Development Board (EDB), and Enterprise Singapore. These bodies provide invaluable guidance, financial assistance, and incentives, designed to nurture business growth and facilitate expansion. From navigating regulatory frameworks to seizing growth opportunities, the support available underscores Singapore’s commitment to fostering a vibrant and inclusive business ecosystem.

Singapore's progressive and dynamic labor market is supported by a structured visa and work permit system designed to meet the needs of various sectors and professionals. This system ensures that foreign talent can contribute to the country's economic development while maintaining a balanced workforce. Singapore has a variety of different work permits available. Some basic requirements need to be met to be eligible for the various passes:

Employment Pass (EP)

The Employment Pass caters to foreign professionals, managers, and executives looking to work in Singapore. It's tailored for high-caliber individuals with job offers that match their expertise and experience levels.

First-time candidates can receive the pass for up to 2 years, with the possibility of renewals for up to 3 years, subject to eligibility and job requirements.

Eligibility:

• A job offer in Singapore.
• A minimum fixed monthly salary of $5,000 for most sectors, which increases to at least $10,500 for candidates aged 45 and above. The financial sector has different salary criteria due to its specialised nature.
• Acceptable qualifications, including a university degree, professional qualifications, or demonstrated specialised skills.
• Successful assessment under the Complementarity Assessment Framework (COMPASS), a points-based system evaluating candidates on various criteria to ensure they complement the local workforce.

S Pass

The S Pass is designed for skilled foreign workers in technical and specialised jobs.

Valid for up to 2 years and renewable, allowing for long-term employment opportunities.

Eligibility 

• A job offer in Singapore.
  A fixed monthly salary of at least $3,150, which increases to $4,650 for candidates aged 45 and above. These thresholds ensure that the skills brought by foreign workers are in line with economic needs and sectors.

Work Permit for Migrant Worker

This permit addresses the demand for foreign labor in specific sectors such as construction, manufacturing, marine shipyard, process, or services, providing flexibility for businesses in these critical industries.

Issued for up to 2 years and renewable, it supports sector-specific workforce needs.

Dependant's Pass

The Dependant's Pass allows the families of Employment Pass or S Pass holders to join them in Singapore, promoting a supportive environment for foreign professionals.

Up to 2 years, renewable, and tied to the main work pass's validity.

Eligibility

• The pass holder must have an Employment Pass or S Pass.
• A minimum fixed monthly salary of $6,000 by the pass holder, ensuring that families are supported during their stay.

The tax year runs from 1^st January to 31^st December.

Income Tax

You will be treated as a tax resident for a particular Year of Assessment (YA) if you are a:

• Singapore Citizen or Singapore Permanent Resident who resides in Singapore except for temporary absences; or
• Foreigner who has stayed/worked in Singapore:

1. For at least 183 days in the previous calendar year; or
2. Continuously for 3 consecutive years, even if the period of stay in Singapore may be less than 183 days in the first year and/or third year; 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*. This applies to employees who entered Singapore but excludes directors of a company, public entertainers, or professionals.

*including your physical presence immediately before and after your employment

If you do not meet the conditions stated above, you will be treated as a non-resident of Singapore for tax purposes.

In Singapore employers are responsible in contributing and reporting the following:

• Central Provident Fund (CPF)
• Self Help Group (SHG) Funds
• Skills Development Levy (SDL)
• Foreign Worker Levy (FWL)

The Central Provident Fund (CPF) is a mandatory social security savings scheme funded by contributions from employers and employees. Employers are required to pay CPF contributions for employees who are Singapore Citizens or work in Singapore and who earn more than $50 per month. Employers must pay the total CPF contribution rate to the CPF Board and are entitled to recover the employee's share of CPF contributions when paying the employee's monthly wages. Contributions are due at the end of every month and are detailed below:

The Skills Development Levy (SDL) is a compulsory levy that employers must pay for all employees and is used to support workforce upgrading programmes and grants. The rate of payment is 0.25% of the employee’s monthly total wage. The maximum payable is $11.25 for an employee earning more than $4,500 a month.

Self Help Group (SHG) Funds are set up to uplift the less privileged and low-income households in the Chinese, Eurasian, Muslim, and Indian communities, respectively. Contributions are based on the employee’s religion, or the employee's race indicated on the National Registration Identity Card (NRIC). Employees should contribute to the respective SHG funds and contributions should be deducted from an employee’s wages. Self Help Group (SHG) Funds are detailed below:

The Foreign Worker Levy (FWL) is a monthly levy to regulate the number of foreigners in Singapore and must be paid for Work Permit holders. The amount of levy to be paid is dependent on:

• Worker’s qualifications.
• The number of Work Permits or S Pass holders hired.
• The sector in which the employer operates.

Employers must pay the levy via a General Interbank Recurring Order (GIRO). The levy for each month will be automatically deducted from the bank account on the 17th of the following month (or the next working day if it falls on a weekend or public holiday).

Employers are required to submit the following forms to the Inland Revenue Authority of Singapore (IRAS) for employees by 1st March every year:

Employers do not need to submit the hardcopy forms to IRAS.

Employers in Singapore must apply for a Central Provident Fund (CPF) Submission Number to make CPF contributions. A new employee needs to register for the following:

• Singpass
• Singpass Foreign Account (SFA)
• National Registration Identity Card (NRIC) or Foreign Identification Number (FIN).

New employees who are foreign citizens are required to apply for and obtain an employment pass before they can commence employment.

Employers are required to keep an employee register containing the following details:

• Full name
• Sex
• Age
• Address
• Identity card number
• Nature of employment
• Rate and amount of remuneration
• The date of commencement and cessation of employment

Employers must retain employment records for current employees for the last 2 years and ex-employees, for the last 2 years to be kept for 1 year after their departure.

Dismissal or Termination by Employer:

If the employer on grounds of misconduct dismisses the employee, the salary must be paid on the last day of employment.

If the employer terminates the contract of service, the salary must be paid on the last day of employment or within three working days from the date of termination.

Termination by Employee:

If the employee resigned and served the notice period, salary must be paid on the last day of employment.

If the employee terminates the contract without notice, salary payment must be paid within seven working days of the last day of employment.

For Foreign Employee (i.e., on working passes):

The company is required to withhold all monies due to the employee and inform IRAS via Form IR21 (Notification of a non-citizen employee’s cessation of employment or departure from Singapore) at least 30 days before the date of cessation of employment. The Form IR21 is required to facilitate tax clearance by IRAS before the foreign employee leaves Singapore.

Form IR21 is also applicable for permanent resident employee who intends to leave Singapore for more than three months or permanently after cessation of employment.

For Singaporean and Permanent Resident:

Notifications are made to the CPF Board via CPF contributions indicating the date of resignation.

It is mandatory to receive a termination letter in writing. Central Provident Fund (CPF) contributions must still be made by employers and employees during the notice period. The length of the notice period must be as agreed according to the employment contract. If a notice period hasn't been agreed upon, the following structure is used:

It is legally acceptable in Singapore to provide employees with online payslips. Employers must issue itemised payslips to all employees, monthly. 

Pay slips must include the following items, unless an item is not applicable.

• Full name of employer.
• Full name of employee.
• Date of payment (or dates, if the pay slips consolidates multiple payments).
• Basic salary
• Start and Allowances paid for salary period
• Any other additional payment for each salary period
• Deductions made for each salary period
• Overtime hours worked.
• Overtime pay.
• Start and end date of overtime payment period (if different from start and end date of salary period).
• Net salary paid in total.

Reports

Employers must retain payroll records for 5 years

Singaporean Payslip Example

Holiday Accrual and Calculations in Singapore

Employees in Singapore are covered by the Employment Act and are required to complete a minimum service period of 3 months to qualify for paid annual leave. This initial period allows employers to assess the commitment and contribution of new hires before granting them full employee benefits. Once this threshold is crossed, employees become eligible to apply for and take annual leave, providing them with  rest and recuperation time.

For employees who have completed between 3 to 12 months of service, the entitlement to annual leave is pro-rated based on the actual number of months worked within the first year of employment. This pro-rating approach ensures a fair allocation of leave, aligning the benefit with the duration of service. For instance, an employee who has worked for 6 months would be entitled to a proportion of the full annual leave entitlement, calculated based on the months of service.

The entitlement to annual leave increases with each completed year of service, reflecting the value that long-serving employees bring to an organisation. The table below outlines the standard annual leave days awarded to employees based on their years of service:

The calculation of annual leave, especially for employees in their first year or those who leave partway through the year, involves determining the exact proportion of leave earned based on the total months of service. For ongoing employees, the total annual leave days are reset at the beginning of each service year, with any unused leave from the previous year either being carried over or forfeited based on company policy.

Maternity Leave in Singapore

In Singapore, maternity leave provisions are designed to support working mothers before and after the birth of their children. The Government-Paid Maternity Leave (GPML) scheme offers leave benefits under specific conditions.

To be eligible for the 16 weeks of Government-Paid Maternity Leave (GPML), certain criteria need to be met, which are aimed at ensuring both the employer and employee are adequately supported during this period:

• The newborn must be a Singapore Citizen at birth.
• The child’s parents must be lawfully married, aligning with the legal framework governing family benefits.
• The employee must have been employed for at least 3 consecutive months preceding the birth, ensuring a stable employment relationship.

Payment Structure of Government-Paid Maternity Leave (GPML) in Singapore

The GPML is structured to balance the financial responsibilities between the employer and the government, ensuring businesses, especially smaller in size, are not unduly burdened

The rate of payment is the employee’s normal monthly salary. The maternity leave payee is dependent on the number of expected births as detailed below:

Additional Maternity Leave Provisions

In addition to the GPML scheme, employees covered by the Employment Act who do not meet the specific criteria for GPML are still entitled to maternity leave benefits:

• Employees in this category are entitled to 12 weeks of maternity leave, provided they have been employed for at least 3 consecutive months before the birth of their child. This provision ensures that a broader range of working mothers has access to maternity leave, albeit for a shorter duration than under the GPML scheme.

Paternity Leave in Singapore

Singapore recognizes the importance of paternal involvement in the early stages of a child’s life, offering Government-Paid Paternity Leave (GPPL) to support fathers in playing an active role during this critical period.

Government-Paid Paternity Leave (GPPL) Eligibility

To be eligible for GPPL, several conditions must be met, emphasizing the government's support for legal and stable family units and the father’s commitment to his employment:

• The newborn must be a Singapore Citizen, ensuring the benefits are extended to support the citizens of Singapore.
• The father must have been lawfully married to the child’s mother from conception until birth, aligning with the legal framework governing family benefits.
• The father must have completed at least 3 consecutive months of employment with the same employer before the birth of the child, demonstrating a stable employment relationship.

GPPL for Adoptive Fathers

Recognising the diverse paths to parenthood, the GPPL scheme is inclusive of adoptive fathers, under the following conditions:

• The adopted child must be a Singapore Citizen, either at birth or at the point of the formal intent to adopt, underscoring the inclusivity of the GPPL scheme.
• Similar to biological fathers, adoptive fathers must have been employed for at least 3 consecutive months prior to the child’s birth or formal intent to adopt.

Financial Cap on GPPL

The GPPL is subject to a financial cap to ensure the scheme is sustainable and benefits are distributed equitably. Each week of GPPL is capped at $2,500, inclusive of CPF contributions, balancing the support provided to fathers with fiscal responsibility.

Extension of GPPL

In a move to further support paternal involvement in childcare, the GPPL will be extended:

• Starting from 1 January 2024, eligible fathers of children born or adopted on or after this date will be entitled to 4 weeks of GPPL, doubling the previous entitlement. This extension highlights the evolving recognition of the father's role in child-rearing.
• The additional 2 weeks of GPPL are granted on a voluntary basis by employers but will be fully reimbursed by the Government, ensuring employers are not financially disadvantaged.

Shared Parental Leave

The scheme also offers flexibility for fathers wishing to share parental leave with their spouses:

• Fathers can opt to share up to 4 weeks of their wife’s GPML, fostering an environment of shared responsibility in childcare.
• This option is contingent upon the child being a Singapore Citizen, the mother qualifying for GPML, and mutual agreement between the spouses, showcasing the scheme's adaptability to different family needs.

Sick Leave in Singapore

The entitlement to paid sick leave in Indonesia is a critical aspect of employment benefits. To qualify for paid sick leave, employees must meet the following criteria:

• Employees must have been working for their employer for at least 3 months. This requirement establishes a minimum period of service before sick leave benefits become applicable, ensuring a basic level of commitment and contribution to the employer.
• Employees are obligated to inform or make a reasonable attempt to inform their employer of their absence due to sickness within 48 hours. This condition ensures that employers can make the necessary adjustments to manage the absence effectively.

Outpatient Sick Leave

Employees are entitled to paid outpatient sick leave under certain criteria. The entitlement applies when employees are deemed unfit for work by a medical practitioner. The practitioner must be registered under the Medical Registration Act or Dental Registration Act, ensuring that the certification comes from a recognised and qualified source.

Hospitalisation Leave

The scope of paid sick leave extends to cover hospitalisation leave in more severe cases:

• Hospitalisation or Day Surgery: Employees qualify for hospitalisation leave when they are admitted to a hospital either as an in-patient or for day surgery, reflecting the seriousness of their medical condition.
• Quarantine: Leave is also applicable when employees are quarantined under any legal requirement, acknowledging the need for isolation in certain medical or public health situations.
• Certification by Qualified Medical Practitioners: Certification must come from medical practitioners with the authority to admit patients into approved hospitals. This includes doctors from national specialty centers and ambulatory surgical centers, ensuring that the certification is backed by reputable medical opinion.

Pro-rated Paid Sick Leave

For employees in the early stages of their employment, paid sick and hospitalisation leave is pro-rated based on their months of service, as detailed below:

National Service in Singapore

Under the Enlistment Act, all male Singapore citizens, and permanent residents, unless exempted, are required to serve up to 40 days of Operationally Ready National Service (ORNS) annually in Singapore. This annual training is mandatory until the individual turns 50 (for officers) or 40 (for other ranks).

Employers are required to grant a leave of absence to employees who are called for their national service duties. Male employees will receive Service Pay during national service and can claim MakeUp Pay to cover the difference between Service Pay and their civilian income amount.

Employers aren’t required to submit MakeUp claims as the Ministry of Defence (MINDEF)/ Ministry of Home Affairs (MHA) will automatically generate this amount based on wage data submitted by employers.

Singapore does not have a minimum wage, there is no mandatory minimum rate of pay for workers in Singapore.

The working week in Singapore is Monday to Friday and working hours should not exceed 44 hours per week.

Employees who work 5 or less days per week can work up to 9 hours per day and those who work more than 5 days can work up to 8 hours per day.

Employers must provide 1 rest day per week.

There are multiple statutory holiday schedules within Singapore. Below are the statutory national holidays in Singapore for 2024.

Taxable Employer Benefits in Singapore

Examples of taxable benefits include the following:

• Employee referral award.
• Cash long service award.
• Housing allowance.
• Car provided by the employer.
• Salary in lieu of notice.

Non-Taxable Employer Benefits in Singapore 

Example if non-taxable benefits include the following:

• A cash or non-cash award for festive occasions up to the value of $200.
• A cash or non-cash award for passing examinations up to the value of $200.
• Non-cash long service award up to the value of $200.
• Reimbursement on car mileage and car park charges for business usage.
• Air travel for business purposes and relocation purposes.

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.

In an effort to navigate economic challenges and align with strategic objectives, Singapore is set to roll out significant updates in 2024 that will impact wage taxes, social security, and employment laws. These modifications are part of the government's proactive measures to adjust to the current economic climate and achieve long-term policy goals.

Enhancements in Business Taxation

To mitigate rising operational expenses, the government will introduce a Corporate Income Tax (CIT) Rebate, amounting to 50% of the tax payable for the Year of Assessment (YA) 2024. This initiative specifically benefits companies that fulfill the "local employee condition" by having employed at least one local employee in the preceding year, ensuring a CIT Rebate Cash Grant of a minimum of $2,000. Furthermore, from YA 2025, the criteria for tax-deductible expenditures on renovations and refurbishments will be broadened, offering businesses additional financial relief.

In a strategic move to align with global tax reforms, Singapore will adopt the Income Inclusion Rule and a Domestic Top-up Tax, as outlined in Pillar Two of the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 Initiative, starting from financial years on or after January 1, 2025. This regulation introduces a minimum effective tax rate of 15% on the profits of multinational enterprises (MNEs) that meet specific revenue criteria, ensuring fair taxation practices for in-scope MNE groups.

Personal Tax Relief and Adjustments

Recognising the impact of the cost of living on residents, a Personal Income Tax (PIT) Rebate of 50% of the tax payable will be granted to all tax-resident individuals for YA 2024, capped at $200 per taxpayer. To further assist taxpayers supporting dependent family members, the income threshold for claiming various dependent-related reliefs will be raised from $4,000 to $8,000 starting from YA 2025. This adjustment aims to extend tax relief benefits to more taxpayers while providing dependents with the opportunity to engage in gainful employment. The dependant-related reliefs are: 

• Spouse Relief
• Parent Relief
• Qualifying Child Relief
• Working Mother’s Child Relief
• CPF Cash Top-up Relief for top-up to the CPF account of spouse or siblings
• Grandparent Caregiver Relief 

Supporting Lower-Wage Workers

The government has committed to enhancing financial support for lower-wage workers by raising the qualifying monthly wage cap from $2,500 to $3,000, accompanied by an increase in Workfare payments to a maximum of $4,900 annually. Additionally, the Local Qualifying Salary and the minimum hourly wage rate will see upward adjustments in July 2024, reinforcing the commitment to improving the livelihoods of lower-wage earners. The Progressive Wage Credit Scheme will also be expanded to provide co-funding support for salary increments awarded in 2024, aiding employers in managing the financial implications of annual wage increases.

Central Provident Fund (CPF) Enhancements

Significant changes are slated for the CPF system, with an increase in contribution rates for senior workers aged above 55 to 65 taking effect on January 1, 2025. To alleviate the impact on employers, the CPF Transition Offset will be extended, covering half of the increase in employer contributions for the following year. Additionally, the government will raise the Enhanced Retirement Sum to $426,000 and close the CPF Special Accounts for individuals aged 55 and above from 2025, alongside enhancements to the Silver Support Scheme for seniors with limited earnings and familial support.

Retirement Benefits and Medisave Contributions

The Majulah Package will provide enhanced retirement benefits to Singapore citizens, particularly benefiting those born between 1960 and 1973, dubbed "Young Seniors." This package aims to bolster retirement sufficiency for eligible Singaporeans. In parallel, to assist Singaporeans in managing healthcare costs and building medical savings, adults aged 21 to 50 will receive a one-time MediSave Bonus of up to $300, contributing to their long-term healthcare preparedness.

Extension of GPPL

In a move to further support paternal involvement in childcare, the GPPL will be extended. Starting from 1 January 2024, eligible fathers of children born or adopted on or after this date will be entitled to 4 weeks of GPPL, doubling the previous entitlement. This extension highlights the evolving recognition of the father's role in child-rearing. The additional 2 weeks of GPPL are granted on a voluntary basis by employers but will be fully reimbursed by the Government, ensuring employers are not financially disadvantaged.

These forthcoming changes in 2024 reflect Singapore’s dynamic approach to legislation, aiming to support economic resilience, provide relief to businesses and individuals, and ensure a stable and prosperous future for all Singaporeans.