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Doing Business in Singapore
DOING BUSINESS IN SINGAPORE
Table of Contents
1.
Introduction 04
2. Foreign investment in Singapore 06
3. T
ypes of business structures 08
4. Corporate Bank Account 13
5. Licences and Permits 14
6.
Intellectual Property 16
7. Government Incentives and Schemes 17
8. Free Trade Agreements 22
9.
Taxation 23
10.
Exchange Controls 29
11.
Work Pass 30
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DOING BUSINESS IN SINGAPORE
1. Introduction
Strategically located at the heart of Southeast • Singapore is ranked fifth in the world in the
Asia, Singapore offers world-class connectivity and Institute for Management Development’s World
infrastructure for businesses which are looking Competitiveness Ranking 2021 and is ranked the
to establish and deepen their presence in the most competitive country in Asia;
Asia Pacific region and beyond. Singapore’s robust
• Singapore is ranked second in the world in the
economy, political stability, pro-business environment,
2021 INSEAD Global Talent Competitiveness Index,
business friendly tax regime as well as highly skilled and
and the only Asian city (ranked 7th) listed in the Top
cosmopolitan labour force are among its greatest draw.
10 ranking of the 2021 INSEAD Global City Talent
According to the Department of Statistics of Singapore,
Competitiveness Index; and
foreign direct investment in Singapore in 2020 was
approximately SGD2,141.8 billion, which increased • Singapore is ranked second in the World Bank
from SGD1,923.6 billion in 2019 . The top sources
1
Group’s Doing Business Survey 2020.
of foreign direct investment in Singapore in 2020
included United States, Cayman Islands, British Virgin Some of the main reasons foreign firms choose to set
Islands, Japan, United Kingdom, Bermuda, Hong Kong, up their businesses in Singapore include, among others,
Switzerland, Canada and Luxembourg. the following:
46% of Asia regional headquarters are based in • Global connectivity: Singapore is one of the most
Singapore across a diverse range of industries2. connected countries and is strategically located
Well-known brands that have set up their regional along major trade, shipping and aviation routes.
headquarters in Singapore include, among others, Singapore is also the gateway to Southeast Asia which
Google, Facebook (now known as Meta), Grab, Twitter, provides convenient access to the region. Through its
Micron, P&G, Microsoft, Total, UPS and GlaxoSmithKline. network of free trade agreements, Singapore
Singapore has an ecosystem of innovation centres, tech established strong trade links with the world which
talent and funding which enables digital businesses to allow businesses to trade freely and easily with major
grow. Many of the top technology firms in the world economies. See Section 8 “Free Trade Agreements”
have a presence in Singapore. Singapore is also home of this Guide for more information on Singapore’s free
to many of the region’s unicorns and fast-growing start- trade agreements.
ups including Carousell, Lazada, Razer and Go-Jek.
• Ease of starting business: It is relatively easy
and quick to register a company in Singapore.
As a result of careful planning and engineering by the
The registration process is fully digitalised and can be
Singapore Government, Singapore has become notably,
completed online. It typically takes around 1-2 days
and received many accolades for being, business
to incorporate a company in Singapore if the relevant
friendly. These accolades include, among others,
application has been duly completed and no other
the following:
regulatory approvals are required. See Section 3
“Types of business structures” of this Guide for
• Singapore is ranked first in the world for having
more information on some of the business structures
the best business environment in The Economist
which may be adopted to conduct business
Intelligence Unit, Business Environment Rankings,
in Singapore.
forecast 2021 to 2025;
1
“Singapore Direct Investment 2020” Singapore Department of Statistics, https://www.singstat.gov.sg/find-data/search-by-theme/trade-and-investment/
foreign-direct-investment/visualising-data/foreign-direct-investment-in-singapore-dashboard. Accessed on 24 March 2022.
2
“Headquarters” Singapore Economic Development Board, https://www.edb.gov.sg/en/our-industries/headquarters.html. Accessed on 27 January 2022.
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• Access to capital in the Asia-Pacific region: governmental incentives and schemes to attract
Investors benefit from Singapore’s dynamic capital firms to do business in Singapore. See Section
markets and access to regional venture capital 7 “Government Incentives and Schemes” of this
flows. Equity capital raised in the Asia-Pacific region Guide for more information on such incentives
increased by two-thirds in 2020 . Debt capital and schemes.
increased by 10%3. The Asia-Pacific accounted for
• Competitive tax policies: There are also various tax
more than one third of global equity proceeds and
incentives, subsidies and schemes for businesses
one-third of debt issuance in 20203. The thriving start-
including, among others, corporate income tax
up and Fintech scene in Singapore and Southeast Asia
rebate. Singapore also has an extensive network
have drawn active interest from PE/VC players from
of tax treaties with more than 85 countries
around the world3.
and territories.
• Conducive ecosystem for start-ups: Singapore has
• Skilled workforce and diverse talent pool:
an ecosystem of start-ups, tech talent and funding.
Singapore’s workforce is highly educated and skilled.
Tech start-ups based in Singapore raised SGD11.2
As a regional hub for businesses across industries,
billion in the first nine months of 2021, which was
Singapore continues to attract diverse talent from
more than double the SGD5.5 billion booked for
around the world. The Singapore Government invests
the whole of 20204. Singapore also has a strong
in continuous training of the workforce so that the
IP regulatory framework which gives businesses
workforce remains responsive to evolving business
confidence that their IP will be protected. Singapore
needs and advancements in technology.
is ranked second in the world and first in the Asia
and Oceania region on the International Property
In this Guide, we provide a general overview of doing
Rights Index 2021, which measures the strength of
business in Singapore including an overview of the
a country's property rights regime, including both
foreign investment regime in Singapore, types of
intellectual and physical property rights.
business structures, licensing requirements, intellectual
• Strong support from the Singapore Government: property regime, government incentives and schemes
The Singapore Government creates a pro-business aimed at encouraging foreign investments in Singapore,
environment through its business friendly economic, free trade agreements, taxation and work passes.
tax and manpower policies. There are also various
3
“”Singapore as a Centre for Fund-Raising in Asia" – Keynote Speech by Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, at Singapore
Exchange Capital Markets Symposium on 17 November 2021” Monetary Authority of Singapore, https://www.mas.gov.sg/news/speeches/2021/singapore-
as-a-centre-for-fund-raising-in-asia. Accessed on 27 January 2022.
4
“S’pore tech start-ups raise $11.2b in first 9 months of 2021, more than double that for whole of 2020” Singapore Economic Development Board,
https://www.edb.gov.sg/en/business-insights/insights/s-pore-tech-start-ups-raise-11-2b-in-first-9-months-of-2021-more-than-double-that-for-whole-
of-2020.html. Accessed on 27 January 2022.
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DOING BUSINESS IN SINGAPORE
2. Foreign investment in Singapore
Singapore has a generally open investment regime. allowed to issue ordinary shares and management
Singapore does not have a specific umbrella legislation shares, with the latter being available only to
on foreign direct investments. The foreign investment Singapore citizens or approved corporations.
controls in specified sectors are set out in sector-specific All directors of such companies are also required to
laws and regulations. Investment may take various be Singapore citizens.
forms including investments in equity, equity linked
instruments as well as loans and other forms of debt Similar to the broadcasting industry, prior approval
including bonds, notes and hybrid securities. is also required from the Minister in respect of any
funds from a foreign source for the purposes of
Foreign investment and ownership restrictions apply in certain newspapers regulated under the NPPA, and
certain circumstances in Singapore. Foreign investment in respect of any person intending to become a
and ownership are regulated in certain sectors in substantial shareholder, 12% controller or indirect
Singapore such as: controller of a newspaper company.
• Broadcasting • Land and real estate
Under the Broadcasting Act 1994 of Singapore Whilst foreign persons do not generally require
(“Broadcasting Act”), no company (unless the approval under the Residential Property Act 1976
Minister approves otherwise) is to be granted or hold of Singapore (the “RPA”) to purchase commercial
a relevant licence under the Broadcasting Act if the or industrial properties as well as certain private
company or its holding company is controlled by residential properties (for example, condominium
foreign sources or if foreign sources hold more than units), foreign persons are required to seek approval
49% of shares or voting power of the company or its to purchase certain restricted property under the
holding company. RPA including vacant residential land, terrace houses,
semi-detached houses, bungalows and shophouses
Prior regulatory approval shall also be sought in for non-commercial use. The term “foreign persons”
the event a person wishes to become a substantial include any person who is not a Singapore citizen or
shareholder, 12% controller or indirect controller a Singapore company. Please also note that stamp
of a broadcasting company, or if a person wishes duty is payable on the sale, purchase, acquisition
to receive any funds from any foreign source for or disposal of properties in Singapore, see Section
the purposes of financing (whether indirectly or 9 “Taxation” of this Guide for more details.
directly, in whole or in part) any broadcasting services
In cases where prior approval from the government
owned or operated by any broadcasting company
or regulatory authority is sought, the timeline of
in Singapore.
the approval will depend on the approval that is
being sought and varies depending on, among
• Domestic news media
other things, the complexity of the application and
Under the Newspaper and Printing Presses Act 1974 due diligence checks by the relevant government or
of Singapore (the “NPPA”), newspaper companies regulatory authority.
can only take the form of public companies limited
by shares. Such newspaper companies are only
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DOING BUSINESS IN SINGAPORE
3. Types of business structures
In general, a person who intends to carry out any activity The factors which determine which business structure
for profit on an ongoing basis must register a business to choose include, among other things, legal status of
with the Accounting and Corporate Regulatory Authority the structure, extent of liability of the owners, funding
of Singapore (“ACRA”). requirements, taxation considerations and future
expansion plans.
Business in Singapore may be conducted through a
variety of business structures including:
• Companies
• Limited Liability Partnerships
• Limited Partnerships
• Partnerships
• Sole Proprietorships
Some of the pros and cons of each business structure are set out in the table below:
PROS CONS
Company • Exists as a separate legal entity, which • Most costly to set up (ACRA charges
offers protection to personal assets of SGD315 for incorporation)
its shareholders
• Stricter ongoing compliance requirements
• Flexible business structure that offers (for example, annual general meetings,
more credibility compared to other financial statements, audits and corporate
business structures tax filing)
• Eligible for corporate tax exemptions • Need to apply to wind up or strike off
and relative ease of raising capital the company if investors wish to close
the company
• Generally eligible for business grants
• Ownership can be easily transferred
through the sale and transfer of
shares in the company
Limited Liability • Hybrid structure that provides • Each partner will be taxed at personal
Partnership (“LLP”) the flexibility of operating as a income tax rates, and the LLP is not
partnership while maintaining eligible for corporate tax relief available
a separate legal personality like a for a company
company
• A LLP generally has limited options for
• Cost-effective to set up (a registration business grants
fee of SGD115)
• To close the LLP, the partners will need
• A partner of an LLP is generally not to apply for the LLP to be wound up or
personally liable for the debts and struck off
liabilities incurred in the LLP’s name
• Perpetual succession until wound
up or struck off, so changes in the
partners of an LLP will not affect its
existence, rights and liabilities
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Limited • Easy to set up, manage and close • Registration for LP must be renewed
Partnership (“LP”) before the expiry date
• Cost-effective to set up (registration
fee of SGD115 for a 1 year registration • A general partner has unlimited liability for
or SGD175 for a 3 years registration) all debts and obligations of the LP
• A limited partner’s liability is • It may be more difficult to secure loans
generally capped at the amount of his and funding from banks and investors
agreed contribution
• Each partner will be taxed at personal
income tax rates, and the LP does not
enjoy corporate tax reliefs
• A LP generally has limited options for
business grants
Partnership/Sole • Easiest to set up, manage and close • Registration must be renewed before the
Proprietorship expiry date
• Cost effective to set up (registration
fee of SGD115 applies) • Not a separate legal personality – the sole
proprietor or partners (as the case may
be) bear unlimited liability for all debts
and obligations of the business or other
partners (as the case may be)
• It may be more difficult to secure loans
and funding from banks and investors
• The sole proprietor or each partner (as the
case may be) are taxed at personal income
tax rates, and the business or partnership
(as the case may be) does not enjoy
corporate tax reliefs
• Limited options for business grants
• In the case of a sole proprietorship,
the business is not transferable and will
cease upon the owner’s demise or when
the owner does not wish to continue with
his business.
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DOING BUSINESS IN SINGAPORE
We set out below a brief description of the key features A company is taxed at the prevailing corporate tax
of the various business structures: rates. A company may also avail itself to the tax reliefs
(for example, qualifying companies can enjoy partial
Company tax exemption).
A company incorporated under the Companies Act
1967 of Singapore is a separate legal entity from its Limited Liability Partnership
directors and shareholders. A company can sue and A limited liability partnership (“LLP”) registered under
be sued in its own name, can own property in its name the Limited Liability Partnerships Act 2005 of Singapore
and is generally liable for its own debts and liabilities. is a separate legal personality from its partners. An LLP
A company has perpetual succession until wound up or can sue and be sued and own property in the LLP’s
struck off. name. An LLP has perpetual succession until wound up
or struck off. This means that changes in the partners of
There are various types of companies in Singapore an LLP will not affect its existence, rights and liabilities.
including, among others, a private company limited by One of the advantages of an LLP is that it gives owners
shares and a public company limited by shares. A private the flexibility of operating a partnership while at the
company limited by shares is the most commonly same time having a separate legal personality like
chosen structure for setting up a business in Singapore. a company.
The minimum issued share capital of a company must A partner of an LLP is generally not personally liable
be at least SGD1. However, there is no minimum paid for the debts and liabilities incurred in the LLP’s name
up share capital required. Application to incorporate a except in certain exceptional circumstances such as,
company is submitted online via the BizFile+ portal of for example, if such debts and liabilities result from the
ACRA. For incorporation of a company, ACRA charges partner’s own wrongful act or omission. A partner of
SGD315. If all the documents are in order and no an LLP is not personally liable for the wrongful act or
approvals from or review by other regulatory agencies omission of the other partners.
are required, incorporation of a company can typically
be completed relatively quickly in 1-2 days. A foreigner An application for the registration of a new LLP must be
must engage the services of a registered filing agent submitted online via BizFile+. A foreigner must engage
(for example, a corporate secretarial firm) to submit the the services of a registered filing agent (for example,
online application. a corporate secretarial firm) to submit the online
application. ACRA charges a registration fee of SGD115.
A company must have at least one shareholder, If all the documents are in order and no approvals from
which can be a natural person or an entity. A private or review by other regulatory agencies are required,
company limited by shares must not have more than the registration can typically be completed fairly quickly
50 shareholders and the right to transfer shares in the in 1-2 days.
company must be restricted. A public company limited
by shares may have more than 50 shareholders. Every LLP shall have at least 2 partners, which may be
an individual (who is at least 18 years old) or a body
A company must have at least one director who is corporate. In addition, every LLP shall have at least
ordinarily resident in Singapore. A director must be a one manager who is a natural person, has attained the
natural person who is at least 18 years old. There are age of 18 years and is otherwise of full legal capacity
nominee directorship services which a foreigner who and is ordinarily resident in Singapore (for example,
incorporates a company in Singapore can engage to Singapore citizens, permanent residents or holders of
satisfy the resident director requirement. A company an EntrePass/Employment Pass).
must appoint a company secretary within 6 months
from its incorporation date. A company secretary must The mutual rights and duties of the partners of a
be a natural person and locally resident in Singapore. LLP, and the mutual rights and duties of a LLP and its
There are corporate secretarial firms in Singapore partners, are generally governed by the LLP agreement,
which provide company secretary services including or in the absence of agreement as to any matter, by any
acting as company secretary. A company must also provision relating to that matter as set out in the First
appoint an auditor within 3 months from incorporation Schedule of the Limited Liability Partnerships Act 2005
unless exempted. of Singapore.
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A partner of a LLP may cease to be a partner in
accordance with the LLP agreement, or in the absence
of such agreement, by that partner giving 30 days’
notice to the other partners of the partner’s intention to
resign as partner.
An LLP is required to keep accounting records,
profits and loss accounts and balance sheets that
will sufficiently explain the transactions and financial
position of the LLP. An LLP is also required to lodge
annual declaration of solvency.
For income tax purposes, an LLP will not be liable to tax
at the entity level. Each partner will be taxed on his or its
share of the income from the LLP. A partner’s share of
income from the LLP will be taxed based on his personal
income tax rate (in the case where the partner is an
individual) or the corporate tax rate (in the case where
the partner is a corporation).
Limited Partnership
A limited partnership (“LP”) is a partnership consisting
of at least one general partner and one limited partner.
A LP does not have a separate legal personality
from its partners. There is no limit to the maximum
number of partners. A LP exists subject to the
partnership agreement.
A general partner has unlimited liability and can take
part in the management of a LP. A general partner is
responsible for the actions of the LP and is liable for all
debts and obligations the LP incurs. On the other hand,
a limited partner’s liability is capped at the amount of
his agreed investment and is not liable for any debts
and obligations of the LP beyond this amount. A limited
partner shall not take part in the management of the LP.
Otherwise, he will be treated as a general partner with
unlimited personal liability.
An individual or a corporation may be a general partner
or a limited partner of the LP. An LP must appoint a
local manager (who is at least 18 years old) if all the
general partners are not residing in Singapore (that is,
not Singapore citizens, permanent residents or holders
of an EntrePass/Employment Pass). The local manager is
personally responsible for discharging all the obligations
of the LP and is subject to the same responsibilities,
liabilities and penalties as a general partner if the
general partner defaults in respect of such obligation.
11DOING BUSINESS IN SINGAPORE
An application for the registration of a new LP must be As a partnership is not an entity in law, the partnership
submitted online via BizFile+. A foreigner must engage does not pay income tax on the income earned by the
the services of a registered filing agent (for example, partnership. Instead, each partner will be taxed on
a corporate secretarial firm) to submit the application. his or its share of the income from the partnership.
ACRA charges a registration fee of SGD115 (for a 1 year A partner’s share of income from the partnership will be
registration) or SGD175 (for a 3 years registration). taxed based on his personal income tax rate (in the case
Registration for LP must be renewed before the expiry where the partner is an individual) or the corporate tax
date. If all the documents are in order and no approvals rate (in the case where the partner is a corporation).
from or review by other regulatory agencies are
required, the registration can typically be completed Sole Proprietorship
fairly quickly in 1-2 days. A business owner may engage in business as a sole
proprietorship. A sole proprietorship does not have a
Similar to an LLP, a LP will not be liable to tax at the separate legal personality so the owner has unlimited
entity level. Each partner will be taxed on his or its share liability and the owner may be personally liable for the
of the income from the LP. A partner’s share of income debts and losses of the business.
from the LP will be taxed based on his personal income
tax rate (in the case where the partner is an individual) In the case where the owner is residing outside of
or the corporate tax rate (in the case where the partner Singapore, at least one authorised representative who
is a corporation). is ordinarily resident in Singapore (that is, a person
who is a Singapore citizen, permanent resident or
Partnership holder of an EntrePass/Employment Pass) must be
A general partnership is a business owned by at least appointed. An authorised representative must be a
2 partners subject to a maximum of 20 partners. natural person (who is at least 18 years old) and of full
The partners of a partnership may be natural persons legal capacity.
or corporate entities. Unlike a company and an LLP,
a general partnership is not a separate legal entity. Registration of a sole proprietorship is made online
The partners of a general partnership have unlimited on BizFile+. A registration fee of SGD115 applies.
liability and are personally liable for all the debts and Registration of sole proprietorship must be renewed
losses of the partnership. A general partnership exists before the expiry date. If all the documents are in order
subject to the partnership agreement. and no approvals from or review by other regulatory
agencies are required, the registration can typically
In the case where all the partners are residing outside be completed fairly quickly in 1-2 days. A foreigner
of Singapore, at least one authorised representative must engage the services of a registered filing agent
who is ordinarily resident in Singapore (that is, a person (for example, a corporate secretarial firm) to submit
who is a Singapore citizen, permanent resident or the application.
holder of an EntrePass/Employment Pass) must be
appointed. An authorised representative must be a Unlike companies, sole-proprietors have lesser ongoing
natural person (who is at least 18 years old) and of full compliance requirements (for example, they do not have
legal capacity. to adhere to annual reporting requirements).
Registration of a general partnership is made online In general, sole-proprietors registered with ACRA
on BizFile+. A registration fee of SGD115 applies. are considered to be a self-employed person.
Registration of a general partnership must be renewed All self-employed persons must report the income
before the expiry date. If all the documents are in order earned from their business operations as business
and no approvals from or review by other regulatory income, and not as salary. The business income is
agencies are required, the registration can typically taxable at individual personal income tax rates.
be completed fairly quickly in 1-2 days. A foreigner
must engage the services of a registered filing agent
(for example, a corporate secretarial firm) to submit
the application.
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4. Corporate Bank Account
Companies and LLPs are required to open a corporate The supporting documents required to open a
bank account. A corporate bank account is, however, corporate bank account in Singapore typically include,
optional for sole proprietorships, partnerships and among other things, duly completed corporate
LP. However, from a tax filing and business operations account opening forms, directors’ resolutions
perspective, it is recommended that a corporate bank (approving the opening of the corporate bank account
account be set up in the case of sole proprietorships, and the signatories to the account), certified true
partnerships and LP as this will allow for business copy of the directors’ resolutions, certified true copy
expenses to be kept separate from personal savings and of the certificate of incorporation, certified true copy
also facilitates the tracking of business cash flow. of the business profile from ACRA, certified true
copy of the company’s constitution, certified true copies
In general, most banks will require account signatories of the passport (or Singapore IC) and proof of residential
and majority of directors to be physically present address of the directors, signatories and beneficiary
in Singapore for signing of paperwork at the time owners. Some banks may require additional documents
of opening of the corporate bank account. Some on a case-by-case basis. It is advisable to check with the
banks may accept the signing of documents at their relevant bank as to its documentary requirements for
overseas branches or in front of a notary public. It account opening.
is advisable to check with the relevant bank as to its
signing requirements.
13DOING BUSINESS IN SINGAPORE
5. Licences and Permits
Depending on the type of business that a person wishes (iii) merchant acquisition service – providing
to conduct in Singapore, it may be necessary to obtain merchant acquisition service in Singapore
licences and permits. Examples of businesses activities where the service provider processes payment
which may require licences and permits in Singapore transactions from the merchant and processes
include, but not limited to: payment receipts on behalf of the merchant.
Such services typically include the provision of a
(a) setting up a private school or private point-of-sale terminal or online payment gateway.
education institution;
The GoBusiness Licensing portal (assessable at
(b) s etting up a hotel; https://licence1.business.gov.sg/web/frontier/home)
allows for businesses to apply for licences online.
(c) banking and insurance business; Foreigners may apply for licenses through the portal
by registering for a Login ID. In general, most licences
(d) p
rovision of capital markets services such as dealing can be applied via the GoBusiness Licensing portal
in capital market products, advising on corporate and businesses can apply for multiple licences from
finance and fund management; and multiple government agencies in one application.
However, application for certain licences will have
(e) provision of payment services including, among to be submitted directly to the relevant government
other things: agencies, for example, the application to apply for a
Capital Markets Services licence to conduct regulated
(i) digital payment token (“DPT”) (commonly known as capital markets services will have to be submitted to the
cryptocurrencies) services – the buying or selling Monetary Authority of Singapore.
of DPTs, or providing a platform to allow persons
to exchange DPTs; The processing time for a licence application varies
depending on the type of licence applied for.
(ii) account issuance service – the service of issuing Applications made through the GoBusiness Licensing
a payment account or any service relating to portal will provide the estimated processing time for the
any operation required for operating a payment licences applied for.
account such as an e-wallet or a non-bank issued
credit card; and
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15DOING BUSINESS IN SINGAPORE
6. Intellectual Property
Singapore has a comprehensive intellectual property IP is territorial in nature, in that protection is only
(“IP”) regime for protection of IP. There are specific available in the jurisdiction of grant. With an economy
legislation in Singapore governing different types that is increasingly globalised, Singapore has
of IP, for example, the protection of trade marks is established and participated in several initiatives to
governed by the Trade Marks Act 1998 of Singapore, facilitate the protection of innovations in overseas
the protection of copyright is governed by the markets through Singapore. For example, the Patent
Copyright Act 2021 of Singapore and the protection of Prosecution Highway (“PPH”) is a work sharing
patents under the Patents Act 1994 of Singapore. The arrangement between IP offices where the examination
Intellectual Property Office of Singapore (“IPOS”) is the process of a patent application in one IP office can be
national authority that registers and is responsible for accelerated by referencing the examination results
the administration of intellectual property rights in from another IP office. This translates to a shorter time
Singapore. IPOS is a statutory board under the Ministry for patent grants and higher quality patents. IPOS has
of Law of Singapore. formed PPH arrangements with key IP markets such
as the US, Europe, China, Japan and South Korea. In
Some IP such as trademarks and patents are protected addition, Singapore is also part of the ASEAN Patent
through an official registration process, while others Examination Co-operation, which is a regional patent
such as copyright are protected once that are created. work sharing programme among the IP offices of
Once a trade mark is registered in Singapore, it will participating ASEAN member states.
be protected for 10 years from the date of filing.
Once a patent is granted in Singapore for an invention, Singapore’s free trade agreements (“FTAs”) also contain
it will be protected for 20 years from the date of IP components that facilitate business activities around
filing. The duration of protection for copyright varies the world. For example, the Regional Comprehensive
depending on the type of copyright work, for example, Economic Partnership (“RCEP”) is a FTA among
in respect of literary, dramatic, musical and artistic Singapore and the other ASEAN member countries as
works, the copyright lasts for 70 years from the end of well as five ASEAN FTA partners (Australia, China, Japan,
the year in which the creator died. New Zealand and South Korea). The RCEP standardises
IP rules across signatory countries, making the IP
Trade secrets could be a type of confidential regimes easier for businesses operating in the region
information. A person who has access to confidential to navigate. Whilst businesses are still required to
information is generally obliged to keep the information register their IP in the relevant jurisdictions to protect
confidential and cannot usually disclose the information their IP, RECP makes it easier for Singapore businesses
to third parties. There is no registration process for to access markets in signatory countries as RCEP
confidential information in Singapore. Non-disclosure requires signatory countries to digitalise their databases
agreements are typically entered into to ensure concerning IP information and create online platforms
that a person is contractually obliged to keep the for IP registration. Signatory countries are also required
information confidential. to make increased efforts to protect digital assets and
commit to making meaningful enforcement actions
available to IP right holders by setting acceptable
minimum standards for enforcement of IP rights.
16DLAPIPER.COM
7. G
overnment Incentives
and Schemes
(a) E
ncouraging Foreign An approved finance and treasury centre (“FTC”)
Investment in Singapore company is eligible for a reduced corporate tax rate
The Singapore Government has various incentives of 8% on income derived from qualifying FTC services
and schemes to encourage foreign investments in to approved network companies (“ANCs”) as well as
Singapore. These incentives and schemes include, qualifying FTC activities carried out of its account with
but are not limited to: funds obtained from qualifying sources.
PIONEER CERTIFICATE INCENTIVE & DEVELOPMENT An approved FTC company is also eligible for
AND EXPANSION INCENTIVE withholding tax exemption on interest payments (such
The Pioneer Certificate Incentive (“PC”) and the as interest on loans obtained by the approved FTC
Development and Expansion Incentive (“DEI”) encourage from banks, non-bank financial institutions and ANCs
companies to grow capabilities and conduct new or outside Singapore) provided that funds are used for its
expanded economic activities in Singapore. Companies approved qualifying activities or services.
that carry out global or regional headquarters (“HQ”)
activities of managing, coordinating and controlling The incentive period is limited to five years which may
business activities for a group of companies may also be extended subject to the FTC company’s commitment
apply for PC or DEI for the HQ activities. to undertake further expansion plans on its FTC
activities/services.
An approved company under the PC or DEI is eligible
for a corporate tax exemption or a concessionary tax In order to qualify for the FTC incentive, the company
rate of 5% or 10%, respectively, on income derived from must establish substantive activities and perform
qualifying activities. The incentive period is limited to five strategic functions in Singapore. Key activities include,
years. The incentive period may be extended subject among other things, control over management of
to the company’s commitment to undertake further cash and liquidity position, provision of corporate
expansion plans. finance advisory services and overall business planning,
investment research and analysis.
There are quantitative and qualitative criteria to be
satisfied including, among other things, employment Applicants will be assessed based on quantitative and
creation (including skills, expertise and seniority), total qualitative criteria including employment creation
business expenditure which generates spin-off to the (including skills, expertise and seniority in the FTC team),
economy, commitment to grow capabilities (for example, total business expenditure which generates spin-off
technology and knowhow) in Singapore and (in the to the economy and the scale of the FTC operations
case of manufacturing projects) commitment to fixed in terms of the depth and breadth of services and
asset investment in plant, building or equipment. The activities. Companies are also encouraged to grow
approval and award of the PC or DEI are subject to the capabilities through working with potential partners
company implementing its plans to grow and sustain such as the professional services and financial sectors.
substantive economic activities in Singapore.
Approval and award of the FTC incentive is subject to the
FINANCE & TREASURY CENTRE INCENTIVE company implementing its plans to grow and sustain its
The Finance & Treasury Centre Incentive encourages FTC operations in Singapore.
companies to grow treasury management capabilities
and use Singapore as a base for conducting strategic GLOBAL INVESTOR PROGRAMME
finance and treasury management activities. The Entrepreneurs and business owners who are interested
finance and treasury centre is typically part of a larger in relocating to, and investing in, Singapore can consider
presence of a company in Singapore which may include the Global Investor Programme (“GIP”). This programme
manufacturing, R&D and headquarter activities. accords Singapore Permanent Residence status to
17DOING BUSINESS IN SINGAPORE
eligible global investors who intend to drive their • Established business owners
businesses and investment growth from Singapore.
• Next generation business owners
The GIP is administered by Contact Singapore which is a
division of the Singapore Economic Development Board. • Founders of fast growth companies
• Family office principals
Applicants will need to have substantial business track
record and successful entrepreneurial background to
qualify. There are four categories of persons who are
eligible to apply, namely:
Depending on the category of eligible persons, the qualifying criteria and investment requirements differ:
ESTABLISHED NEXT GENERATION FOUNDERS OF FAST FAMILY OFFICE
BUSINESS OWNERS BUSINESS OWNERS GROWTH COMPANIES PRINCIPALS
Qualifying (a) A
pplicant must (a) Applicant’s (a) A
pplicant must (a) A
pplicant must
criteria possess at immediate family be a founder possess at
least 3 years of should have and one of the least 5 years of
entrepreneurial at least 30% largest individual entrepreneurial,
and business shareholding shareholders of investment or
track record or is the largest a company with management
shareholder in a valuation of at track record
(b) A
pplicant should
the company least SGD500 million
currently be (b) Applicant
running a company (b) T
he company’s (b) T
he company must must have
with annual annual turnover be invested into net investible
turnover of at least must be at least by reputable assets of at least
SGD200 million SGD500 million VC/PE firms SGD200 million
in the year in the year
(c) T
he company
immediately immediately
must be engaged
preceding the preceding the
in one or more
application, application,
of the specified
and at least and at least
industries (see row
SGD200 million per SGD500 million per
entitled “Specified
annum on average annum on average
Industries”
for the three for the three
below for more
years immediately years immediately
information)
preceding preceding the
the application application
(c) I f the company is (c) A
pplicant must
privately held, the be part of the
applicant should management team
have at least 30% of the company
shareholding in (for example,
the company board of directors)
(d) T
he company (d) T
he company
must be engaged must be engaged
in one or more in one or more
of the specified of the specified
industries (see row industries (see row
entitled “Specified entitled “Specified
Industries” Industries”
below for below for
more information) more information)
18DLAPIPER.COM
Investment Any of the following options: Option C
options
Option A: Invest SGD2.5 million in a new business entity or in the
expansion of an existing business operation
Option B: Invest SGD2.5 million in a GIP fund that invests in
Singapore-based companies
Option C: I nvest SGD2.5 million in a new or existing Singapore-based
single family office having Assets-Under-Management of at
least SGD200 million
Specified • Aerospace Engineering Not applicable
Industries
• Alternative Energy/Clean Technology
• Automotive
• Chemicals
• Consumer Business (for example, flavours and fragrances, food
ingredients, nutrition, home and personal care)
• Electronics
• Energy
• Engineering Services
• Healthcare
• Infocomm Products and Services
• Logistics and Supply Chain Management
• Marine and Offshore Engineering
• Media & Entertainment
• Medical Technology
• Nanotechnology
• Natural resources (for example, metals, mining and agri-commodities)
• Safety and security
• Space
• Shipping
• Pharmaceuticals and Biotechnology
• Precision Engineering
• Professional Services (for example, consulting and design)
• Arts Business (visual arts business (for example, auction houses, art
logistics/storage) and performing arts businesses)
• Sports businesses
• Family office and financial services
19DOING BUSINESS IN SINGAPORE (b) Other Grants and Programmes The Singapore Government has a variety of grants and programmes to provide funding support and assist businesses in building their capabilities, skills and knowledge. Some of these grants and programmes include: • Startup SG Tech – Startup SG Tech supports Proof- of-Concept and Proof-of-Value for commercialisation of innovative technologies. The grant will be awarded upon the completion of each milestone and will include an equity component where Enterprise Singapore will have the rights to subscribe for shares. • Enterprise Development Grant – this grant supports projects that help Singapore companies to upgrade their business, innovate or venture overseas. This grant funds qualifying project costs, namely third party consultancy fees, software and equipment, and internal manpower cost. This grant provides funding of up to 70% of the qualifying costs for SMEs and up to 50% of qualifying costs for non-SMEs. • Technology for Enterprise Capability Upgrading – this programme seconds A*STAR scientists and research engineers to aid local SMEs’ R&D projects for up to two years. Seconded experts share product development strategy, aid innovation in the business and assist companies to develop innovative products. A*STAR is Singapore’s lead public sector agency that spearheads economic oriented research to advance scientific discovery and develop innovative technology. A*STAR collaborates with partners from both the public and private sectors and bridges the gap between academia and industry. • International Co-Innovation Programmes – these programmes assist a company’s growth and internationalisation by supporting projects that catalyse cross-border collaboration on technology development and co-innovation. Through collaboration with international counterpart, a company can co-innovate solutions, test-bed them and scale up into the regional together. Singapore has partnership with the Eureka Network, France, Germany, Israel, Jiangsu, Shanghai, United Kingdom and Zhejiang. 20
DLAPIPER.COM
21DOING BUSINESS IN SINGAPORE
8. Free Trade Agreements
Singapore has entered into a number of bilateral and management, conduct, operation, and sale or other
regional FTAs with its trading partners. FTAs are legally disposition of investments in its territory. In addition,
binding international treaties between two or more each party shall accord investors of the other party
trading partners that seek to promote trade by reducing treatment in accordance with customary international
barriers to trade in goods, services and investments. law minimum standard of treatment of aliens, including
Singapore currently has more than 25 bilateral FTAs fair and equitable treatment and full protection
and regional FTAs. Trading partners which Singapore and security.
has entered into bilateral FTAs include China, European
Union, India, Japan, Australia, United Kingdom and In addition, foreign investors and investments covered
United States. Regional FTAs include ASEAN Free under the FTAs may enjoy certain assurance including
Trade Area, ASEAN-Australia-New Zealand Free Trade those in relation to expropriation of property. The FTAs
Area, ASEAN-China Free Trade Area, ASEAN-India Free may contain commitments on the circumstances
Trade Area and The Comprehensive and Progressive under which expropriation may take place as well as
Agreement for Trans-Pacific Partnership (currently compensation that must be given should such action
ratified by Mexico, Japan, Singapore, New Zealand, occur. In some cases, side letters accompanying the
Canada, Australia and Vietnam). Singapore continues to FTAs provide further information about the parties’
expand its list of FTAs. Most recently, in January 2022, stand on such actions. For example, under the US-
Singapore entered into the Pacific Alliance-Singapore Singapore Free Trade Agreement (the “USSFTA”),
Free Trade Agreement with a bloc of countries it provides that neither party may expropriate or
comprising Chile, Colombia, Mexico and Peru (which are nationalize a covered investment either directly or
collectively the world’s eighth largest economy). indirectly through measures equivalent to expropriation
or nationalization except (a) for public purpose, (b) in a
The FTAs vary in scope and commitments and individual non-discriminatory manner, (c) on payment of prompt,
investors from trading partner countries should adequate and effective compensation in accordance
consult their individual FTAs for benefits that may be with the USSFTA, and (d) in accordance with due process
available to them. Foreign investors and investments of law and the USSFTA.
covered under the FTAs may enjoy certain assurance
including in respect of treatment of foreign investments. Certain FTAs also contain provisions that help to
For example, under the Peru – Singapore Free Trade standardise IP rules and commitments to make
Agreement, each party shall accord to investors of the meaningful enforcement actions available to IP right
other party treatment no less favorable than that it holders. See Section 6 “Intellectual Property” of
accords, in like circumstances, to its own investors with this Guide.
respect to the establishment, acquisition, expansion,
22DLAPIPER.COM
9. Taxation
Singapore has a competitive tax regime for individuals and corporates. Some of the taxes in Singapore include:
Personal income tax
The amount of personal income tax payable depends (excluding director of a company) for 183 days or more
on an individual’s tax residency status in Singapore. in the year preceding the year of assessment (“YA”) will
A foreigner who has stayed or worked in Singapore be treated as a tax resident of Singapore.
TAX RESIDENT STATUS TAX IMPLICATIONS
Resident All income is taxed at progressive resident rates from 0% to 22%. An individual may
be able to claim deductions (for example, relief and donation) to reduce taxes.
Non-Resident The employment income of non-residents is taxed at the flat rate of 15% or the
progressive resident tax rates, whichever gives rise to a higher tax amount.
Director’s remuneration is taxed at the prevailing rate of 22%. Non-residents are not
entitled to tax reliefs.
As announced in the Singapore Budget 2022, the top Goods and Service tax
marginal personal income tax rate will increase with Goods and Services Tax (“GST”) is a broad-based
effect from YA 2024. Chargeable income in excess of consumption tax levied on the importation of goods
SGD500,000 up to SGD1 million will be taxed at 23%, into Singapore as well as supplies of goods and services
while chargeable income in excess of SGD1 million in Singapore (except those which are exempted or
will be taxed at 24%; and in both cases an increase zero-rated). The prevailing rate for GST is 7%. A business
from the current rate of 22%. This change is intended must register for GST when its taxable turnover exceeds
to make Singapore individual income tax regime SGD1 million.
more progressive.
GST exemptions apply to the provision of most financial
Corporate tax services, the supply of digital payment tokens (with
A company is taxed on the income earned in the effect from 1 January 2020), the sale and lease of
preceding financial year. Tax on corporate income residential properties, and the importation and local
is currently imposed at a flat rate of 17%, but as supply of investment precious metals. GST need not be
mentioned above under Section 7 “Government charged on exempt supplies.
Incentives and Schemes”, it is possible to lower this
rate if one of the government incentive schemes is Goods that are exported and provision of international
available to the relevant company or business. services are zero-rated (that is, GST is charged at 0%).
In addition, there are certain corporate income tax
In the Singapore Budget 2022, the Singapore
rebates and exemption schemes available. For example,
Government announced that GST rate will increase from
all companies will receive a 25% corporate income tax
the current 7% to 9% in two stages – the first increase
rebate, which is capped at SGD15,000, for YA 2020
from 7% to 8% will take place on 1 January 2023, and
to ease business costs and support restructuring
the second increase from 8% to 9% will take place on
by companies. From YA 2020 onwards, qualifying
1 January 2024.
companies can enjoy 75% exemption on the first
SGD10,000 of normal chargeable income and a further
50% exemption on the next SGD100,000 of normal
chargeable income.
23DOING BUSINESS IN SINGAPORE
Stamp Duty
There are three types of duties payable on the sale,
purchase, acquisition or disposal of properties in Singapore:
(A) BUYER’S STAMP DUTY (“BSD”)
A person is required to pay BSD for documents executed BSD is computed based on the purchase price or
for the transfer or sale and purchase of property located market value of the property, whichever is higher.
in Singapore. BSD is payable on all acquisitions of There are differentiated BSD rates between residential
immovable properties in Singapore. It is not dependent and non-residential properties as follows:
on the nationality of the buyer or the number of
properties that the buyer owns.
PURCHASE PRICE OR MARKET BSD RATES FOR BSD RATES FOR NON-
VALUE OF THE PROPERTY RESIDENTIAL PROPERTIES RESIDENTIAL PROPERTIES
First S$180,000 1% 1%
Next S$180,000 2% 2%
Next S$640,000 3%
3%
Remaining Amount 4%
BSD is rounded down to the nearest dollar, subject to a minimum duty of S$1.
(B) ADDITIONAL BUYER’S STAMP DUTY (“ABSD”) factors (i) whether the buyer is an individual or an
ABSD is paid on top of BSD and is computed on the entity, (ii) the profile of the buyer, and (iii) the number of
purchase price as stated in the dutiable document residential properties owned by the buyer.
or the market value of the property (whichever is the
higher amount). On 15 December 2021, the Singapore Government
announced that ABSD rates will be raised with effect
The rate of ABSD will depend on the profile of the from 16 December 2021, as part of a package of
buyer as at the date of purchase or acquisition of the measures to cool the private residential and HDB resale
residential property, taking into account the following markets in Singapore.
OLD ABSD RATES NEW ABSD RATES
TYPES OF BUYERS RATES FROM 6 JULY 2018 RATES ON OR AFTER
TO 15 DECEMBER 2021 16 DECEMBER 2021
Singapore citizens Buying first residential property 0% 0%
Buying second residential property 12% 17%
Buying third and subsequent 15% 25%
residential property
Permanent Buying first residential property 5% 5%
Residents
Buying second residential property 15% 25%
Buying third and subsequent 15% 30%
residential property
Foreigners Buying any residential property 20% 30%
Entities Buying any residential property 25% 35%
(plus additional 5% for (plus additional 5% for
housing developers housing developers
(non-remittable)) (non-remittable))
ABSD is rounded down to the nearest dollar, subject to a minimum duty of SGD1.
24DLAPIPER.COM
(C) S
ELLER’S STAMP DUTY (“SSD”)
Residential properties and residential lands
SSD is payable on all residential properties and (iii) the date of the sale or disposal, and (iv) SSD rates
residential lands that are acquired on or after applicable. The SSD rates differ depending on the period
20 February 2010 and disposed of within the of purchase and when the property is disposed within
holding period. the holding period. For example, we set out below the
SSD rates payable on residential property acquired
Whether the disposal is subject to SSD and the amount on and after 11 March 2017 and disposed within the
payable will depend on (i) the type of property sold holding period:
or disposed, (ii) the date of purchase or acquisition,
DATE OF PURCHASE OR DATE SSD RATE (ON THE ACTUAL PRICE OR
HOLDING PERIOD
OF CHANGE OF ZONING/USE MARKET VALUE, WHICHEVER IS HIGHER)
On and after 11 March 2017 Up to 1 year 12%
More than 1 year and up to 8%
2 years
More than 2 years and up to 4%
3 years
More than 3 years No SSD payable
The SSD rates differ for other periods of purchase, please refer to the Inland Revenue Authority of Singapore’s
website here for more information.
SSD is computed by applying the requisite SSD rate on the higher of the selling price or the market value of the
residential property as at the date of sale or disposal. SSD payable is rounded down to the nearest dollar.
Industrial properties and industrial lands
SSD is payable on all industrial properties and industrial disposed, (ii) date of purchase or acquisition, (iii) the
lands that are acquired on or after 12 January 2013 and date of sale or disposal, and (iv) SSD rates applicable.
disposed of within the holding period.
The rates of SSD payable on industrial property acquired
Whether the disposal is subject to SSD and the amount on and after 12 January 2013 and disposed of within the
payable will depend on (i) the type of property sold or holding period are set out below:
DATE OF PURCHASE/ACQUISITION OR SSD RATE (ON THE ACTUAL PRICE OR
HOLDING PERIOD
DATE OF CHANGE OF ZONING/USE MARKET VALUE, WHICHEVER IS HIGHER)
On or after 12 January 2013 Up to 1 year 15%
More than 1 year 10%
and up to 2 years
More than 2 years 5%
and up to 3 years
More than 3 years No SSD payable
SSD is computed by applying the requisite SSD rate on the higher of the selling price or the market value of the
industrial property as at the date of sale or disposal. SSD payable to be rounded down to the nearest dollar.
25DOING BUSINESS IN SINGAPORE
Capital Gains Tax multiplying the annual value of the property (that is, the
Gains from the sale of a property, shares and financial estimated annual rent of the property) with the relevant
instruments in Singapore are generally not taxable. property tax rates which are applicable. Property tax is
payable yearly.
Property Tax
Property tax is a tax on the ownership of property The property tax rates for residential and non-
and applies whether the property is occupied by the residential properties effective from 1 January 2015 to
owner (that is, owner-occupied), rented out or left 31 December 2022 are set out below:
vacant. Property tax rate in Singapore is calculated by
RESIDENTIAL PROPERTIES NON-RESIDENTIAL PROPERTIES
Owner-occupied tax rates range from 0% to 16% Non-residential properties such as commercial and
industrial buildings and land are taxed at 10%.
Non-owner occupier tax rates range from 10% to 20%
The tax rates depend on the band which the annual
value of the property falls into
It was announced in the Singapore Budget 2022 that property tax rates for owner-occupied residential properties
and non-owner-occupied residential properties will be revised.
OWNER-OCCUPIED RESIDENTIAL PROPERTIES
For owner-occupied residential properties, the property This change will be implemented in phases over
tax rates will increase for the portion of annual value in two years, with the first increase to take effect on
excess of S$30,000 to a range of between 6% to 32%. 1 January 2023, as follows:
PROPERTY TAX RATE FOR OWNER-OCCUPIED RESIDENTIAL PROPERTIES
ANNUAL VALUE
Effective 1 January 2023 Effective 1 January 2024
First S$8,000 0% 0%
Next S$22,000 4% 4%
Next S$10,000 5% 6%
Next S$15,000 7% 10%
Next S$15,000 10% 14%
Next S$15,000 14% 20%
Next S$15,000 18% 26%
Above S$100,000 23% 32%
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