Doing Business in Singapore

Singapore is a city-state in southeast Asia, situated at the southern tip of Malaysia. Established in the 19th century as a trading post, Singapore is now the 36th-largest economy in the world, and was ranked 2nd in the World Bank’s Ease of Doing Business Survey 2018. The city plays a major role in global commerce, acting as a gateway to the wider APAC region and attracting significant amounts of foreign investment. Singapore hosts over 7,000 international businesses, offering them a favourable bureaucratic environment and corporate tax rates capped at 17%. Major industries in the city include financial services, manufacturing and a range of high technology products. A parliamentary republic with a stable political and economic system, Singapore holds a significant amount of regional influence: it is one of five founding members of ASEAN, a member of the East Asia Summit, and hosts the Asia-Pacific Economic Cooperation Secretariat.

Why invest in Singapore?

Singapore's growing economy is fertile ground for business - and provides a range of investment opportunities:

  • International gateway: Singapore is an international trade hub and a gateway to the APAC region. Businesses in the city take advantage of strong communication and transport links (including air and sea), while benefiting from trade agreements with a number of neighbouring markets.
  • Tax rate: The corporate tax rate in Singapore is capped at 17%, attracting a range of international corporate interests. Singapore also offers a range of tax advantages, including progressive personal income tax rates, no capital gains tax, and no tax on foreign income for non-resident taxpayers.
  • Economic strengths: Singapore is a highly developed economy and leads the world in a number of sectors. The major industries of Singapore include manufacturing, oil refining and financial services, while a range of emergent sectors, such as integrated electronics, big data, and biomedical sciences, are becoming prominent.
  • Regulation: Businesses in Singapore benefit from a robust and transparent regulatory framework, with a range of checks and balances in place to ensure fairness and security for the organisations operating within the city.
  • Skilled labour: Singapore’s high-profile status in APAC - and across the world -  attracts some of the best talent to its professional roles. Businesses in the city are able to recruit from a competitive pool of highly-skilled employees.

Foreign Direct Investment in Singapore

The Singapore Economic Development Board (EDB) attracts Investment Funds on a large-scale, despite the city's relatively high-cost operating environment. Singapore’s stable and corruption-free government, highly skilled workforce, and efficient infrastructure, has attracted investments from thousands of global businesses from around the world.

Registering A Company and Establishing an Entity in Singapore

A company is required to apply online for submission of Central Provident Fund contribution details via CPF Auto-excel Plus (AX Plus) - using their representative’s SingPass, and entity’s Unique Entity Number (UEN). The application will take approximately 2-3 working days.

Once the application is approved, the company will receive an Email and Welcome Letter containing the CPF Submission Number (CSN), Payment Advice (CPF91) and an Application for Interbank GIRO form. The company is required to quote the CSN when transacting with the CPF Board, e.g., paying CPF contributions or correspondence.

From Q3 2018, Singapore Corporate Access (CorpPass) will be required for all local entities with a Unique Entity Number (UEN), and for foreign entities who wish to access Government-to-Business (G2B) digital services in Singapore. Individuals and local entities without a UEN will continue using their SingPass to transact with the Government. CorpPass is a one-stop authentication and authorisation service, for corporate users to transact with Government agencies online on behalf of their organisations. For more information, visit https://www.corppass.gov.sg.

Business Banking in Singapore

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

Working Days and Working Hours in Singapore

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

Basic Facts about 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: 5.61 million (Department of Statistics Singapore, as at June 2017)
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, petroleum products
Internet Domain: .sg
International Dialing Code: +65

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 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).

Income Tax & Social Security In Singapore

For corporations, the basis tax period is the preceding Financial Year. Therefore, assuming a company’s Financial Year ends on 31st March, the YA 2019 will be based on the accounts for Financial Year ending 31st March, 2018, while the YA 2018 will be based on the accounts for the Financial Year ending on 31st March 2017.

For personal income taxes, companies are not required to withhold salary for any employee via monthly estimated payroll tax deduction. All employees must file an annual tax declaration, and pay their liability directly to Singapore’s Inland Revenue Department.

The return process requires employers to prepare Form IR8A (along with appendix 8A and appendix 8B) or Form IR8S (where applicable) for employees who are employed in Singapore by the 1st of March. Businesses with more than 10 employees for an entire year (ending 31st December), or employers who have received the Notice to File Employment Income of Employees Electronically, must submit employee income information electronically by the 1st of March following the assessment year.
Even though there is no income tax withholding at source, companies must withhold salary and seek tax clearance by filing Form IR21 for at least 1 month for foreign employees - under the following circumstances:

  • The employee ceases to work in Singapore;
  • The employe is on overseas posting;
  • The employee leaves Singapore for any period exceeding 3 months

Companies may be liable for a fine up to S$1,000 if they fail to provide the 1 month notice with valid reason(s).
An employee will be taxed on all incomes (base salary, commission, bonus, etc.) earned in Singapore and subject to the deduction of tax reliefs. The personal income tax rate is progressive and the highest marginal tax rate is 20%.
All resident individual taxpayers will be given a Personal Income Tax Rebate on the tax payable for the Year of Assessment. While the amount of rebate granted may change, the calculation depends on the age of the resident individual as of December 31st. The individual tax rebate is subject to a cap imposed by the Inland Revenue Service.

Social Security in Singapore

The Central Provident Fund (CPF) is a compulsory savings plan for employees in Singapore. It funds a range of social security schemes, including retirement, healthcare and housing, and is maintained by the CPF Board.
Statutory contributions in Singapore are made to the CPF by the employer and the employee. Contributions go into three accounts:

  • Ordinary Account (OA): Covering housing, insurance, investment, education
  • Special Account (SA): Covering retirement products
  • Medisave Account (MA): Covering hospital expenses and other medical insurance

When an employee turns 55, a fourth Retirement Account (RA) is created for them, designed to provide savings for retirement.
CPF contributions must be paid by Singapore Citizens and Singapore Permanent Residents who are working in the city under a Contract of Service - or who are employed in a permanent, part-time, or casual basis. Contributions are not mandatory for those workers employed overseas.

Employers should pay CPF contributions within 14 days of the end of the month. They may access their accounts via an online CPF Singapore login portal - which offers access a range of useful tools.
The statutory contribution rates for a Singapore citizen and a 3rd year Singapore Permanent Resident (SPR) below the age of 50 and an income level of above S$1,500 (applicable to over 90% of employees) are 50% - a 50/50 split between employer and employee.

New Employees in Singapore

New Starts (Singaporeans & permanent residents) do not need to be registered separately with the below authorities since their inclusion in the monthly CPF (Central Provident Fund) submission will suffice:

  • Inland Revenue Authority of Singapore
  • Singapore Workforce Development Agency
  • Ministry of Manpower

Employers of New Starts (foreigners) are required to apply for and obtain an employment pass/work permit before commencing employment. The application process for working passes for foreign New Starters will take approximately 5 weeks in the case of ‘hard copy’ applications, or 2 weeks to process online. Work visas for foreigners are granted by Singapore’s Ministry of Manpower - prior to commencement of employment.

For Singaporean and permanent residents:

  • If the mode of submission is via hardcopy Payment Advice (Form CPF 91), then Form CPF 92 (New Employee Contribution Form) is required to be completed and submitted together.
  • If the mode of submission is via Online, Form CPF 92 is not required.

Expat New Starts in Singapore are required to provide the following documentation:

  • Passport - to verify the Full Name, Nationality and Country of Origin;
  • Work Permit - to verify the Identity and to ensure that the Working Pass is valid to work with the customer;
  • For Singapore Permanent Resident – First Re-Entry Permit issued that indicate the PR status date to determine the Year of Residency and CPF rates;
  • Employment Contract - to verify the Base Wage and other information on Benefits-in-Kind that are relevant for year-end reporting.
  • Expatriate New Start employees must have a valid Working Pass before the commencement of employment.

The relationship between employer and employee in Singapore is regulated by contract - and subject to statutory requirements set out in both the Employment Act and common law. The contract should include details such as basic pay, work duties, annual leave and termination clauses.

Leavers In Singapore

Dismissal or Termination by Employer: If an employee is dismissed by their employer on grounds of misconduct, salary must be paid on the last day of employment.
If the contract of service is terminated by an employer, salary must be paid on the last day of employment or within 3 working days from the date of termination.

Termination by employee:

If an employee has resigned and served their notice period, salary must be paid on the last day of employment. If an employee terminates their contract without notice, salary payment must be paid within 7 working days of the last day of employment.

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

A company is required to withhold all monies due to an 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 a foreign employee leaves Singapore. Form IR21 is also applicable for a 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.

Payroll in Singapore

Payroll processing in Singapore involves specific rules and regulations - and should take the status of foreign workers into account. There are no monthly withholding obligations for employers in Singapore but contributions to social security schemes, including the CPF, the Skill Development Levy and the Foreign Workers Levy, are required. 
Singapore has legislation which requires itemised payslips to be issued to all employees - it is legally acceptable to issue payslips online. Payslips must include details of employment such as date of payment, basic salary amount, deductions made, and net monthly salary. Foreign companies setting up in Singapore may choose to engage a global payroll provider to help them navigate the city’s compliance regulations, and ensure that their employee populations are paid accurately and efficiently.

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