Business Operations in Singapore (Portfolio 7340)

Tax Management Portfolio, Business Operations in Singapore, provides U.S. and other foreign businesses and individuals interested in conducting business operations in Singapore with a general description of the relevant statutes and regulations governing business activities from both the tax and general legal perspectives.

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The Detailed Analysis begins with a general introduction to Singapore and its governmental, financial, and economic institutions. This is followed by a discussion of the various forms of doing business in Singapore, and the structure and regulation of foreign trade and investment in Singapore. The statutory and procedural framework of Singaporean income taxation as it applies to corporations and individuals, residents and nonresidents, is analyzed in detail. A guide to the Analysis is provided by the Table of Contents.

The Worksheets include statutory provisions governing the incorporation of a business, relevant tax forms, examples of tax computations, and the texts of several tax treaties. A Bibliography is provided as a research aid.

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Business Operations in Singapore was authored by the following experts. 
Lian-Ee Teoh, L.L.M., Drew & Napier LLC (incorporated with limited liability), Singapore.

Ching-Ling Seah, L.L.B., Drew & Napier LLC (incorporated with limited liability), Singapore.


Detailed Analysis

I. Introduction

A. Location, Area, Climate, Role and Living Conditions

B. Government

C. Legal Framework

D. Development

E. Population and Language

F. Currency

G. Exchange Controls

H. Sources of Business Information

I. Immigration Requirements and Work Passes

1. P and Q Pass (Employment Pass): For Foreign Professionals, Managers, Executives and Specialists

2. Personalized Employment Pass: For Selected Overseas Foreign Professionals, Employment Pass Holders and Foreign Graduates from Institutions of Higher Learning in Singapore

3. S Pass: For Middle Level Skilled Manpower, for Example, Technicians

4. R Pass (Work Permit): For Semi-skilled and Unskilled Foreign Workers Who Do Not Qualify for S Passes

5. EntrePass: For Foreign Entrepreneurs Wishing to Start Businesses in Singapore

6. Training Employment Pass: For Foreigners Wishing to Be on a Practical Training Attachment for Positions of a Professional, Managerial, Executive or Specialist Nature in Singapore

7. Miscellaneous Work Pass (Previously Professional Visit Pass)

J. Schemes for Permanent Residence

1. Permanent Residence for Professional/Technical Personnel and Skilled Workers

2. Permanent Residence for Investors Under the Economic Development Board Scheme

3. Financial Investors Scheme Under the Monetary Authority of Singapore

a. Option A - Eligibility

b. Option B - Eligibility

K. Labor

1. In General

2. The Employment Act (Cap. 91)

3. Labor Force

4. Pay Rates

5. Levy

6. Working Hours, Holidays and Vacation

7. Dismissals, Retrenchment and Retirement Benefits

8. Labor Management Relations - Unions

L. Finance

1. International Financial Center

2. The Monetary Authority of Singapore

3. The Asian Dollar

4. Tax Concessions

5. Bond Market

6. Fund Management

7. Offshore Reinsurance Business

8. Gold Market

9. Trading of International Securities

10. Other Financial Facilities

M. Sources of Funds

N. Official Agencies Assisting Industrial and Export Enterprises

1. Economic Development Board

2. SPRING Singapore

3. International Enterprise Singapore

4. Singapore Productivity and Standards Board

5. The Jurong Town Corporation

6. Technical and Industrial Training

O. Association of South East Asian Nations

P. Industrial Property Rights

Q. Securities Regulations

R. The Singapore Exchange

II. Foreign Investment and Incentives

A. Foreign Investment Climate

B. Tax Incentives

1. Incentives to Promote Foreign Direct Investments into Singapore Through the Establishment of Operations in Singapore

a. Pioneer Incentive

b. Development and Expansion Incentives

c. Investment Allowance Scheme

d. Foreign Loans for Productive Equipment

2. Incentives to Promote Singapore's Exports and Overseas Investments by Singapore Companies and Persons

a. Export of Services Incentive

b. Overseas Enterprise Incentive

c. Overseas Investment Incentive

d. Approved Venture Company

3. Incentives to Promote the Use of Singapore as International or Regional Headquarters, or as a Hub for Regional Investment and Trading Activities

a. Approved Headquarters Incentive

b. Integrated Industrial Capital Allowances

c. Approved Global Trading Company

d. Approved Cyber Traders

4. Incentives to Promote Singapore as a Centre for Research and Development

a. Research and Development and Intellectual Property Management Hub Incentive

b. Royalties, Fees and Development Contributions

c. Deductions for Research and Development Expenses

5. Incentives to Promote Singapore's Financial Industry

a. Financial Sector Incentives Scheme

b. Financial and Treasury Center Incentive

c. Processing Services to Financial Institutions

d. Commodity Futures Exchange

e. Private Wealth Management - Tax Exemption

f. Trust Companies - Services

g. Funds Managed by Fund Manager in Singapore

6. Incentives to Promote Singapore's Insurance Industry

a. Offshore Insurance Industry

b. Captive Insurance Companies

7. Incentives to Promote Singapore's Shipping Industry

a. Approved International Shipping Enterprises

b. Maritime Finance Incentive

8. Other Incentives

a. Enterprise Investment Incentive

b. Events Companies

C. Comptroller's Power of Revocation and Recovery of Tax

D. Nontax Incentives

III. Forms of Business Organization Under Singapore Law

A. In General

B. Resident Representative

C. Registered Branch

1. Registration

2. Filing Requirements

3. Foreign Company Not Regarded as Carrying on a Business in Singapore

D. Locally Incorporated Companies

1. Types of Companies

2. Formation Requirements


4. Directors, Secretary and Public Accountants

5. Management of a Company

6. Residence of a Company

7. Board of Directors

8. Director's Qualifications

9. Annual Financial Statement

10. Dissolution of a Company

E. Sole Proprietor and Partnership

F. Accounting and Corporate Regulatory Authority

IV. Income Taxation

A. History

B. Scope of Charge

C. Assessable Income

D. Source of Income

1. Where Services Are Performed

2. Trading With or Within Singapore

E. Basis of Assessment

F. Tax Returns and Filing Obligations

G. Payment of Tax - Penalties

H. Disputed Assessments

V. Company Taxes

A. In General

1. Corporate Tax Partial Exemption Regime

2. Residence

3. New Corporation - Tax Exemption

4. Deductions - General

5. Depreciation or Capital Allowances

6. Taxes and Contributions

7. Formation and Start-Up Costs

8. Interest and Royalties

9. Head Office and Management Expenses

10. Bad Debts

11. Reserves and Provisions

12. Double Deductions

13. Relief for Error or Mistake

14. Foreign-Source Income of Companies

B. Tax Treatment of Losses

1. General

2. Company Losses

3. Group Relief

4. Partnership Losses

5. Loss Carryback

C. Unabsorbed Depreciation Allowances

D. Taxation of Nonresident Companies or Branches of Foreign Companies

E. Dividends (One-Tier Corporate Tax System)

F. Transactions Between Related Parties

G. Income from International Sea and Air Traffic

H. Winding Up or Liquidation

VI. Withholding Taxes on Payments to Nonresidents

A. General

B. Royalties and Technical Assistance Fees

C. Interest

D. Management Fees

E. Directors' Fees

F. Rents and Other Payments for the Use of Movable Property

G. Dividends

H. Nonresident Professionals

I. Provision of Information and Digitized Goods

VII. Tax on Individuals

A. General

B. Income from Employment

C. Residence

D. Foreign-Source Income of Resident Individuals

E. Singapore-Source Investment Income

F. Income Tax at Graduated Rates

G. Income Tax Borne by the Employer

H. Expenses and Fringe Benefits

I. Deduction of Income Tax at Source

J. Taxation of the Family Unit

K. Obligations to Disclose Income

L. Some Factors Affecting Liability to Income Tax

1. Tax Treaties

2. Special Exemptions

3. Resident, Not Ordinarily Resident and Nonresident Individuals

M. Deductions, Personal Allowances and Reliefs

1. Deductions from Total Income

2. Loan Interest

3. Personal Allowances and Reliefs

a. In General

b. Personal Allowances

4. Insurance Relief and Relief for Other Obligatory Contributions

5. Other Relief

N. Regional or Area Representative Basis

O. Taxation of Clubs and Trade Associations

VIII. Other Taxes and Dues

A. Estate Duty

B. Property Tax

C. Import Duties

D. Export Duties

E. Capital Gains

F. Goods and Services Tax

1. Overview

2. Types of Goods and Services Tax Supplies

a. General

b. International Services

3. Place, Time, and Value of Supply

a. Place

b. Time

c. Value

4. Imports and Re-exports

a. Imported Goods

b. Re-exports

5. Output and Input Tax

6. Partially Exempt Trader

7. Waiver of Goods and Services Tax for Goods Removed from Bonded Warehouse

8. Registration

9. Voluntary Registration

10. Exemption from Registration

11. De-registration

12. Accounting Periods and Returns

13. Bad Debts

14. Business Records

15. Objection and Appeal Procedures

16. Rate of Tax

G. Other Taxes

H. Stamp Duty

I. Central Provident Fund Contributions

IX. Exempt Income

X. Deeming Provisions

XI. Advance Ruling System

XII. Tax Treaties


Working Papers

Table of Worksheets

Worksheet 1 Incorporation Procedure

Worksheet 2 Articles of Association (Fourth Schedule of the Singapore Companies Act, Cap. 50)

Worksheet 3 Director's Resolution in Writing Pursuant to Art [ ] of the Articles of Association of the Company

Worksheet 4 Statement in Lieu of Prospectus (Sixth Schedule of the Singapore Companies Act, Cap. 50)

Worksheet 5 Annual Return of Company Having a Share Capital (Eighth Schedule of the Singapore Companies Act, Cap. 50)

Worksheet 6 Company Records

Worksheet 7 Share Transfer Form

Worksheet 8 Share Application Form

Worksheet 9 List of Products for which Manufacturing Licenses Are Required (As gazetted under the Control of Manufacture Act)

Worksheet 10 Items Under Control - Import/Export Permits

Worksheet 11 List of Pioneer Industries

Worksheet 12 Singapore - A Total Business Centre

Worksheet 13 Form C - Income Tax Return (Company)

Worksheet 14 Form T - Trust Income Tax Return

Worksheet 15 Form P1 - Body of Persons Income Tax Return

Worksheet 16 Form P2 - Charity Income Tax Return

Worksheet 17 Rates of Income Tax for Resident Individuals

Worksheet 18 Rates of Tax - Companies - Trustees - Executors

Worksheet 19 Withholding Tax Rates on Payments Made to Nonresident Persons

Worksheet 20 Current Foreign Workers Levy Rates

Worksheet 21 Personal Allowances

Worksheet 22 Rates of Depreciation Allowances (Straight Line Method)

Worksheet 23 Example of Tax Computation: Income Tax on Individuals

Worksheet 24 Example of Tax Computation: Income Tax on a Partnership and Partners

Worksheet 25 Example of Tax Computation: Income Tax on a Company

Worksheet 26 Furnishing of Estimated Chargeable Income (ECI) - Inland Revenue Notice and Form

Worksheet 27 Singapore Double Taxation Convention with Germany

Worksheet 28 Singapore Double Taxation Convention with Malaysia

Worksheet 29 List of Comprehensive Double Taxation Agreements and Related Protocols Signed by Singapore as of March 1, 2009

Worksheet 30 Table of Withholding Tax Rates

Worksheet 31 Agreements for Reciprocal Exemption of Income from International Operations of Ships and Aircraft

Worksheet 32 Administrative Ruling on Certain Payments Made to Non-Resident Persons Under Sections 12(6) and 12(7) of the Singapore Income Tax Act

Worksheet 33 Summary of Key Investment Incentives

Worksheet 34 IRAS Circular 7 July 2008, updated 29 August 2008 - Not Ordinarily Resident Scheme (excerpt)

Worksheet 35 Application Form for NOR Status and Yearly Application Form

Worksheet 36 IRAS Circular 15 August 2002 - New One-Tier Corporate Tax System (excerpt)

Worksheet 37 4-Line Statement for Sole Proprietors and Partnerships on Income Tax Forms B and P

Worksheet 38 Charging and Collection of GST

Worksheet 39 IRAS Compass, Interpretation and Practice Notes: Secondment of Staff

Worksheet 40 Types of GST Supply

Worksheet 41 GST Treatment on Imported Goods

Worksheet 42 GST Refund from Importation of Goods or Raw Materials

Worksheet 43 The Basic GST Process

Worksheet 44 Procedure to Determine Registration Liability



Statutes of the Republic of Singapore: