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1、Doing Business in Singapore2024AN INTRODUCTION TOThis edition of Doing Business in Singapore was produced by a team of professionals at Dezan Shira&Associates,with Ayman Falak Medina as Technical Editor.Creative design of the guide was provided by Nguyen Hoang Linh.2024 Dezan Shira&Associates VISIT

2、US ON LINKEDINFOLLOW US ON TWITTERDezanShiraSingapore BriefingVISIT US ON FACEBOOKDisclaimerThe contents of this guide are for general information only.For advice on your specific business,please contact a qualified professional advisor.Copyright 2024,Asia Briefing Ltd.No reproduction,copying,or tra

3、nslation of materials without prior permission of the publisher is permitted.THE DOING BUSINESS IN ASIA GUIDES SERIESAvailable to Download Now:ASEAN Guide China Guide Dubai Guide Hong Kong Guide India Guide Indonesia Guide Vietnam GuideDoing Business in Singapore PortalOur online Doing Business in S

4、ingapore Portal will consist of 100+guides,videos,publications,and tools that are practical and easy to navigate,covering:Why Singapore,Regions to Invest,Sector Insights,How to Setup,Tax,Audit and Accounting,HR,Recruitment,PEO,and Payroll,News,Events,and more.3AN INTRODUCTION TO DOING BUSINESS IN SI

5、NGAPORE 2024About Dezan Shira&AssociatesAt Dezan Shira&Associates,our mission is to guide foreign companies through Asias complex regulatory environment and assist them with all aspects of establishing,maintaining and growing their business operations in the region.Since its establishment in 1992,De

6、zan Shira&Associates has grown into one of Asias most versatile full-service consultancies with operational offices across China,Hong Kong,India,Singapore and Vietnam,as well as liaison offices in Italy,Germany and the United States,and partner firms across the ASEAN region.With over 30 years of on-

7、the-ground experience and a large team of professional advisers,we are your reliable partner in Asia.4AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Despite global uncertainties,Singapore ranks among the top most competitive economies in the world.GDP growth for Singapore in 2024 is projected to

8、 be in the range of 1-3 percent.In Q1 2024,Singapores economy grew 2.7 percent year-on-yearthe fastest seen in 18 months.As a strategic financial hub and a gateway to Asia,Singapore offers unparalleled opportunities for foreign investors.With over 80 double taxation avoidance agreements,generous tax

9、 deductions,an extensive network of free trade agreements with neighboring nations,and a reputation as a global financial center,businesses operating in Singapore can maximize their profitability and expand their reach.Amid the risks associated with the fallout of the COVID-19 pandemic,Singapore con

10、tinues to demonstrate its resilience,providing direct access to global markets.While external demand has softened,Singapores manufacturing and wholesale trade sectors remain robust and primed for growth.Top focus areas for the countrys policymakers in the near term include upskilling the local workf

11、orce,attracting and retaining highly skilled talents,efficiency of the small and medium enterprises(SME)sector,artificial intelligence and emerging technologies,ESG,and innovation.For corporate entities hoping to establish a holding company,branch office,or regional headquarters,Singapore offers a p

12、owerful advantage in terms of business opportunities,government incentives,and trade relation benefits.This publication,designed to introduce the fundamentals of investing in Singapore,wascompiled in June by Dezan Shira&Associates,a specialist foreign direct investment practice providing corporate e

13、stablishment,audit,business advisory,tax advisory and compliance,accounting,payroll,due diligence,and financial review services to multinationals and SMEs investing in emerging Asia.PrefaceCONTACTDezan Shira&Associates ALBERTO VETTORETTIManaging PartnerDezan Shira&Associates5AN INTRODUCTION TO DOING

14、 BUSINESS IN SINGAPORE 2024Lawrence Wongs appointment as Singapores fourth Prime Minister marks the city-states first leadership change in two decades.Despite decades of rapid development,he faces numerous challenges including a declining birthrate,increasing living costs,and potential disruptions f

15、rom technological advancements such as artificial intelligence.Additionally,Singapore navigates a complex geopolitical landscape in the Asia-Pacific region amid escalating tensions between the US and China,while maintaining its traditionally strong relations with both nations.Despite these internal

16、and external challenges,economic continuity will be a key focus duringWongs tenure leading up to the general elections,scheduled no later than November 2025,which will decide the makeup of the 15th Singaporean Parliament.Taking the oath on May 15,2024,Wongs appointment marked the end of Singapores g

17、overnance by the family dynasty of Lee Kuan Yew,Singapores first leader.The political succession has been carefully orchestrated by the long-governing Peoples Action Party to ensure stability.Wong is the first Singapore prime minister born after the countrys independence in 1965.Wong has retained hi

18、s finance portfolio.Outgoing prime minister Lee Hsien Loong continues his role as senior minister,following the tradition of former premiers.Singapore maintains a cautiously optimistic outlook for 2024,with the Ministry of Trade and Industry(MTI)upholding its growth forecast range of 1 to 3 percent,

19、reflecting the nations resilience in a volatile global environment.While external demand has softened,Singapores manufacturing and wholesale trade sectors remain robust and poised for growth.The city-state boasts over 80 double taxation avoidance agreements,generous tax deductions,an extensive netwo

20、rk of free trade agreements with neighboring nations,and a reputation as a global financial hub.These factors make Singapore an attractive location for businesses seeking to maximize profitability and expand internationally.For corporations looking to establish a holding company,branch office,or reg

21、ional headquarters,Singapore offers significant advantages including abundant business opportunities,government incentives,and favorable trade relations.PM Lawrence Wong Takes Charge as Singapore Foresees Stable Economic Growth in 20246AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Singapore has

22、 continued to implement strategic reforms to improve the business climate for foreign investors.Most of these reforms relate to implementing stricter requirements for the hiring of foreign workers.We also highlight Singapores plan to introduce a 15 percent minimum tax rate for multinational enterpri

23、ses(MNEs)from January 2025.These changes are part of the Base Erosion and Profit Shifting initiative,or BEPS 2.0,a global framework that aims to ensure a fairer distribution of tax rights on large MNEs through a set global minimum tax(GMT)rate.Singapore has also increased the goods and services tax(

24、GST)by one percent to nine percent in 2024.Corporate establishmentThis chapter outlines the essential steps involved in establishing a business entity in Singapore,whether its a private limited company,branch office,or representative office.For newcomers to Asia,setting up a representative office ca

25、n serve as a low-risk entry point.On the other hand,businesses aiming to leverage Singapore as a gateway to ASEAN markets may opt for more substantial commitments,such as establishing a branch office or subsidiary company.TaxationIn 2024,Singapore raised its GST rate from eight to nine percent.Addit

26、ionally,starting January 1,2023,Singapore began applying GST to imported low-value goods.The rapid expansion of the e-commerce sector in Singapore and Southeast Asia has led to a notable increase in the volume of imported low-value goods entering Singapore.Consequently,the government aims to create

27、equitable conditions for businesses in Singapore by subjecting overseas suppliers to the same GST treatment as local suppliers.Human resources and payrollSingapore has implemented a revamped points system for Employment Pass(EP)applicants since 2023,alongside increased qualifying salary requirements

28、.The new system,known as the Complementarity Assessment Framework(COMPASS),aims to enhance Singaporean businesses ability to recruit top-tier foreign professionals and promote diversity in the workforce.Additionally,Singapore introduced the Overseas Network&Expertise Pass,enabling high-earning indiv

29、iduals and accomplished professionals to reside in Singapore without the prerequisite of securing employment beforehand.Whats New in This Guide7AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Incentives for businessSingapore has enhanced several of its key incentives to support businesses.However

30、,most of these incentives have local ownership requirements.Companies setting up in Singapore are eligible for various fiscal and non-fiscal incentives if their business is deemed beneficial to the countrys economic development.Mandatory climate reportingStarting from the 2024 financial year,the Sin

31、gapore Exchange(SGX)has expanded its requirement for industries to submit environmental,social,and governance(ESG)reports.Previously,in 2023,mandatory climate reporting applied to businesses in sectors such as financial services,agriculture,energy,food,and forest products.This requirement has now be

32、en extended to include the materials,construction,and transportation industries for 2024.8AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024As a regional practice,we are not tied to any one nation.Rather,we specialize in the tax,accounting,and operational access of foreign direct investment through

33、out Asia.For businesses and investors seeking to conduct business in Singapore and the wider ASEAN region,our business consulting team in Singapore and partner firms across ASEAN are prepared to provide you with the tools and expertise necessary to succeed.Dezan Shira&Associates SingaporeSINGAPORE O

34、FFICESBF Center,160 Robinson Road,#28-10Singapore 068914 Tel:+65 6789 3256Fax:+65 6521 3001Email:DAVID STEPATDirectorDezan Shira&AssociatesSingapore Office9AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Table of ContentsPreface04Whats New in This Guide06Part 1|Corporate Establishment12Business s

35、tructures14Fast Track Patent Program25Options available to solve legal disputes in Singapore27Sustainability program to help businesses go green28Singapore ESG reporting30Part 2|Taxation32Corporate income tax in Singapore34BEPS 2.036Individual income tax36Good and services tax38Withholding tax41Capi

36、tal gains tax43Transfer pricing43Property tax45Carbon tax46Taxation of foreign sourced income in Singapore46Part 3|Free Trade Agreements51What are the types of FTAs?53Digital economy partnership agreement5510AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Part 4|Human Resources and Payroll58Emplo

37、yment Act60Employment contracts63Employment permits65Increased salary requirements from 202569Minimum wage 79Social insurance80Termination of employment83Part 5|Incentives for Businesses85Incentives for businesses86Industry specific tax incentives87Start-Up Tax Exemption Scheme88Partial Tax Exemptio

38、n Scheme88Enterprise Financing Scheme-Trade Loan 88SME fixed assets loan89Venture debt loan89Merger and acquisition loan90Double Tax Deduction for Internationalization90Startup SG Tech91Enterprise Development Grant91Pioneer tax incentives92Development and expansion incentive94Enterprise Singapore ma

39、rket readiness assistance grant95ESG grants9611AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Part 6|Audit and Compliance99Who is obligated to be audited?100Annual General Meeting 100Fiscal year101Audit exemptions101Group company audits102Accounting standards102Annual reports10312AN INTRODUCTION

40、 TO DOING BUSINESS IN SINGAPORE 2024 Business structuresFast Track Patent ProgramOptions available to solve legal disputes in SingaporeSustainability program to help businesses go green Singapore ESG magazineCorporate Establishment113AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 20241Foreign invest

41、ors can set up a variety of business structures in Singapore for their investments.Establishing a subsidiary,branch office,or representative office are some of the most popular options.Investors need to assess their specific business needs before deciding on a corporate structure to operate from.Tho

42、se entering Asia for the first time,for instance,may want to set up a low-risk,exploratory presence in the form of a representative office,while those looking to use Singapore as a springboard to access the ASEAN markets may need more strategic commitments by setting up a branch office or subsidiary

43、 company.Singapores investment-friendly landscape has made it a premier regional hub,attracting a multitude of international firms engaging in conventional as well as new-age industries across Asia and the world.This is reflected from its impressive Ease of Doing Business ranking and strong network

44、of free trade agreements(FTAs)and double tax agreements(DTAs).Despite this,investors need to be aware of the risks presented by each avenue of investment.Determining the ideal route for market entry or expansion needs thoughtful consideration about the intended scope of investment,the nature of busi

45、ness activities,tax implications,and legal liability.“For companies only seeking to establish a low-risk,exploratory presence in Singapore,establishing a representative office is typically the most common route for investment.”DAVID STEPATDirectorDezan Shira&AssociatesSingapore Office14AN INTRODUCTI

46、ON TO DOING BUSINESS IN SINGAPORE 2024Private companies limited by shares A private company limited by shares,also known as a private limited company,is by far the preferred structure among small and medium-sized(SME)foreign companies for setting up a local business presence in Singapore.A private l

47、imited company can benefit from tax incentives available to local companies.It is also a separate legal entity from its directors,shareholders,and officers of the company;this means that the foreign holding company cannot be held for the liabilities of its subsidiary.In addition,the holding companys

48、 liability is limited to the share capital subscribed in its subsidiary.As a private limited company can be wholly owned by a foreign individual and/or corporate investor,this legal entity can be established as a regional holding company or subsidiary of the foreign holding company.Having a Singapor

49、e incorporated company provides the advantage of gaining access to the wider Asian market and ASEAN free trade zones,as well as access through free trade agreements such as the ASEAN-Hong Kong FTA,ASEAN-India FTA,and the Regional Comprehensive Economic Partnership(RCEP).This is particularly helpful

50、for companies looking to set up larger manufacturing operations elsewhere in ASEAN.Key requirements for setting up a private company limited by shares1.Reservation of company name The company name must be approved by the Accounting and Corporate Regulatory Authority(ACRA)prior to the company registr

51、ation process;Once a name is selected,the name application shall be submitted via ACRA Bizfile for approval,which may be rejected if the name is identical,similar,or phonetically similar to a company that has already been registered;and The name application costs S$15(S$11.05),which will be reserved

52、 for 120 days upon approval.2.Appointment of Company Officers The officers of a company include the following:Director:The appointment of at least one director who is either a Singaporean citizen,permanent resident,or EntrePass/Employment Pass holder;and The director needs to be at least 18-years of

53、 age and must not have a history of misconduct or bankruptcy in their work history.Auditor(to be appointed within 3 months of incorporation unless exempted from audit requirements);Business structures15AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024 Company secretary(to be appointed within 6 mon

54、ths of incorporation);and Shareholders(the minimum shares issued,and paid-up capital is S$1(US$0.73).3.Registered address This must be a commercial business address in Singapore.Register for nominee shareholders and nominatorsSingaporean and foreign companies registered in Singapore are obligated to

55、 maintain a register of nominee shareholders and their nominators.Further,Singapore companies,foreign companies,or Singapore limited liability partnerships(LLPs)who have no registrable controller or are unable to identify the controller are required to identify individual(s)with executive control as

56、 their registrable controller.The changes were set out under the Corporate Registers(Miscellaneous Amendments)Act 2022.The company or foreign company must update its non-public register within seven days after receiving information from a nominee shareholder or a nominator in their company.This new

57、requirement aims to minimize the risk of companies in Singapore being controlled by illicit actors.A nominee shareholder is defined as:A person or limited company that is registered as a holder of the shares in a company on behalf of another person or company;and Receives dividends in respect of the

58、 shares that they hold as a representative of another person or company.Nominee shareholders must also notify the company if they cease to become a nominee shareholder within 30 days of cessation.Non-compliance with these requirements is punishable with a fine of up to S$5,000(US$3,685).The Corporat

59、e Registers(Miscellaneous Amendments)Act also introduces a new mandate for both local and foreign companies as well as LLPs to disclose registrable controllers.Registrable controllers are individuals,such as CEOs,directors,partners,or entities,who exert executive influence over daily operations.Prev

60、iously,there was no obligation for companies or LLPs to maintain such a registry.Now,these entities must identify and register all individuals or entities exercising executive control.16AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024These amendments aim to enhance transparency among companies an

61、d LLPs established in Singapore.Failure to comply with these regulations can result in fines of up to S$5,000(US$3,685)per offense,with each defaulting officer subject to the same penalty.Annual general meetingsBoth publicly listed companies and non-listed companies in Singapore are required to hold

62、 an annual general meeting(AGM).Publicly listed companies must hold their AGMs within four months after the end of their financial year,while non-listed companies must hold it within six months after the end of their financial year.During the AGM,companies are expected to present their financial sta

63、tements,providing shareholders with insights into the companys financial health.Moreover,shareholders are given an opportunity to raise questions and concerns about the companys operations.Private limited companies and public companies incorporated in Singapore now have the option to hold virtual AG

64、Ms in addition to statutory meetings and extraordinary annual general meetings.Previously,AGMs were primarily conducted in person.Procedure for shareholder meetingsNotice for shareholdersShareholder meetings follow a specific procedure outlined by the Companies Act in Singapore.The company is respon

65、sible for sending out a notice to its shareholders,members,and officers,containing essential information related to the meeting.The notice must include the following details:Date,time,and place of the meeting:The notice should clearly state the scheduled date,time,and location of the shareholder mee

66、ting.Agenda:The notice should specify the topics and matters that will be discussed during the meeting.Appointment of proxies:The notice must inform members about their rights to appoint a proxy to attend and vote on their behalf if they are unable to attend the meeting personally.Special resolution

67、:If any matter requires a special resolution,the notice should explicitly state the requirement for a special resolution.In the case of an ordinary resolution,the notice must be sent to shareholders at least 14 days before the scheduled general meeting.For matters requiring a special resolution,the

68、notice must be provided at least 21 days in advance of the general meeting.Electronic notices17AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Amendments to the Companies Act have introduced the option of sending notices electronically.This means that companies can now deliver notices via electro

69、nic means such as email,company websites,fax,or other electronic communication methods.Branch officesForeign companies can establish branch offices to conduct any type of business activity that falls within the scope of the parent company.Branch offices are not eligible for the tax exemptions and in

70、centives available to local companies as ultimate control of the branch remains vested in the overseas parent company.As such,branch offices are regarded as an extension of the foreign holding company and is therefore taxed as a non-tax resident at the corporate tax rate of 17 percent.The name of th

71、e branch office must be the same as the parent company and as a legal extension of the parent company.The parent company must bear ultimate legal responsibility for all branch office liabilities and be registered with ACRA,which is responsible for the monitoring of new companies in Singapore.Because

72、 of this liability,many foreign companies choose to establish a subsidiary or private limited company rather than branch offices.Key requirements for setting up of branch offices1.Reservation of name of branch office The name of the branch office must be the same as the foreign parent company;The na

73、me of the branch office must be approved by the ACRA prior to the branch office registration process;Once a name is selected,the name application shall be submitted via ACRA Bizfile for approval,which may be rejected if the name is identical,similar,or phonetically similar to a company that has alre

74、ady been registered;and The name application costs S$15(US$11.05),which will be reserved for 120 days upon approval.2.Appointment of company officers 18AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024The officers of a company include the following:Director The board of directors of the Singapore

75、branch office must be the same as the board of directors on the foreign parent company;and The director needs to be at least 18-years of age and must not have a history of misconduct or bankruptcy in their work history.Authorized representative The branch office must have at least 1 authorized repre

76、sentative who is ordinarily resident in Singapore.3.Registered address This must be a commercial business address in Singapore.Representative officesA representative office(RO)is a short-term,temporary arrangement with a limited purpose;however,it must be established for a maximum of three years,of

77、which the RO status is subject to evaluation by Enterprise Singapore,the government agency under the Ministry of Trade and Industry,before the RO can be further renewed on an annual basis.This set up is an ideal choice for foreign investors who are still researching their investment options before s

78、etting up a fully-fledged office in Singapore.Companies looking to set up an RO must have sales turnover of at least US$250,000 and must be represented by staff from their own HQ or a Singaporean citizen.ROs can be staffed by a maximum of five individuals,with the parent company bearing liability fo

79、r the activities of the RO and is responsible for financing its operations.The RO is confined to activities set out by Enterprise Singapore,which include:Gathering of information on markets and potential clients;Carrying out research to ascertain product/service information;Developing trade contacts

80、 and manage product enquiries;Participating in trade shows and exhibitions;and Gathering information on regulatory requirements for the set-up of a permanent entity.Key requirements for setting up of a representative office19AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024As a temporary administr

81、ative office,the RO cannot engage in profit-yielding business activities and can only participate in information gathering or market research-based activities.Investors wishing to establish a RO in Singapore must ensure:The parent company has been established for more than three years;The parent com

82、pany has incurred an annual sales turnover of more than US$250,000;The foreign chief representative is from its headquarters;alternatively,the RO may appoint a Singapore citizen to fulfil the role of the chief representative;and The RO does not hire more than five local employees as support staff.Th

83、e following documents are required to setup the RO:a)A completed application form;b)Copy of the company certificate;andc)Copy of the parent companys latest annual reports and audited accounts.The application must be made through Enterprise Singapore,rather than ACRA.Variable Capital CompaniesIn Janu

84、ary 2020,the Monetary Authority of Singapore(MAS)and ACRA launched the Variable Capital Company(VCC),a new innovative corporate structure for all types of collective investment schemes(investment funds)in Singapore.The VCC is regulated under its own legal framework through the Variable Capital Compa

85、nies Act and offers more operational flexibility compared to investment fund structures currently available in the country through trusts,limited partnerships,or private limited companies.This means fund managers can establish investment funds across both traditional and alternative strategies and a

86、s open-ended or closed-end fund strategies.Open-ended funds are offered through fund companies that sell shares directly to investors,allowing them to enter and exit according to their convenience.There is also no limit on the number of shares they can issue,if there is an appetite for the fund.Clos

87、e-ended investments,however,are overseen by a fund manager or brokerage firm and are listed on the stock exchange.There are a fixed number of shares that are issued.The government hopes this flexibility will attract more investment funds to be domiciled in Singapore and bring the country to the fore

88、front of the global investment services industry.Navigating the business and regulatory landscape in Asia can be challenging.Our multi-disciplinary advisory task force can guide you through the entire life cycle of your business with a wide range of services and expertise.Contact our experts at ASEA

89、N.CORPORATE ESTABLISHMENT AND BUSINESS ADVISORY SERVICESEXPLORE MORE20AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024What are the requirements of a VCC?There are several key components of the VCC:The VCC must have at least three directors who are Singaporean residents.At least one director must

90、be a representative of the fund manager;The VCC will require a Singapore regulated and licensed fund manager or it can use a Singapore licensed bank to be the fund manager.The entity cannot be self-managed;The VCC can have a single shareholder or hold a single asset;The requirements for investment f

91、unds listed under the Existing Securities and Futures Act(SFA)will apply to VCCs;The VCC must have a registered office in Singapore and appoint a Singapore-based secretary;and It must be audited by a Singapore-based auditor and present its financial statements as per the International Financial Repo

92、rting Standards(IFRS)or US GAAP.What are the key benefits of using the VCC structure?There are several benefits a VCC structure has over current collective investment schemes in Singapore.The VCC can be used as a standalone fund(comprising of a single investment portfolio)or as an umbrella entity wi

93、th various sub-funds allowing for the segregation of portfolios and liabilities.Having multiple funds in a single VCC can improve cost efficiencies.The VCC capital will always be equal to its net assets.This is because the VCCs shares are only created when investments are made.This provides flexibil

94、ity in the distribution and reduction of capital as dividends can be paid out of capital,easing the ability of fund managers to meet dividend payment obligations.Fund managers can easily re-domicile existing overseas investment funds by transferring their registration as a Singapore VCC.There are al

95、so several tax benefits for VCCs.These include:A VCC is not burdened by the same capital requirements of an open-end fund in Singapore,and has access to the countrys more than 100 tax treaties;An umbrella VCC will only need to file a single corporate income tax return(CIT)to the Inland Revenue Autho

96、rity of Singapore(IRAS);Income from a VCC can be exempt from tax if it qualifies for the governments Enhanced Tier Fund(ETF)Scheme.There are two criteria for this:The VCC must have a minimum fund size of S$50 million(US$36.8 million);and Must have a local business spend of S$200,000(US$148,202).The

97、VCC could qualify for the tax exemptions for startups scheme(SUTE)and obtain a 75 percent tax exemption on the first S$100,000(US$74,149)of chargeable income during the first consecutive three years.The next S$100,000(US$74,149)of chargeable income can receive a 50 percent tax exemption;and The enti

98、ty can recover goods and services tax(GST)on expenses occurred in Singapore.21AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Digital banking licensesWhile digital banks offer the same banking services as traditional banks,they operate without a physical setup,enabling customers to control their

99、finances from their computers or smartphones.MAS has awarded digital banking licenses to the following entities:1.A consortium of Singapore Telecommunications Ltd(Singtel)and Grab Holding Inc(Grab);2.Sea Limited;3.Trust Bank;4.Green Link Digital Bank;5.Ant Financial;and6.A consortium of Greenland Fi

100、nancial Holdings Group Co.Ltd,Linklogis Hong Kong Ltd,and Beijing Co-operative Equity Investment Fund Management Co.Ltd.There are two types of digital banking licenses digital full bank license(DFB)and digital wholesale bank license(DWB).The DFB license enables an entity to offer deposits,loans,and

101、investment products through its online platform.DFB license holders can only serve retail and corporate banking services while DWB license holders can only serve SME businesses.What were the eligibility criteria to apply for the digital banking licenses?Applicants for the DFB and DWB licenses met th

102、e following criteria:At least one entity of an applicant group had a track record of three years or more in the e-commerce field or technology industry;All key persons are fit and proper;Demonstrate the ability to meet the minimum paid capital at the onset and the minimum capital funds required on a

103、n ongoing basis;For DFB,the initial minimum,paid capital of S$15 million(US$11.1 million)before progressively raised to S$1.5 billion(US$1.11 billion);and For DWB,the paid-up capital of S$100 million(US$7.44 million).The sustainability of the digital banks business model(a five-year financial projec

104、tion of the digital bank,which shows the path to profitability.The financial projection must be reviewed by an independent expert);Submission of a feasibility study for the orderly exit of the digital bank;and Shareholders of the digital bank must provide a letter of responsibility and a letter of u

105、ndertaking in respect to the operations of the digital bank.Specifically,for DFB licenses,the applicant must be anchored in Singapore,controlled by Singaporeans,and headquartered in the country.22AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024MAS also assesses whether the applicant can incorpora

106、te innovative technology to meet customer needs that differentiate it from existing banks,as well as the entitys understanding of local regulatory compliance and risk management plans.Finally,MAS evaluates the growth prospects of the digital bank,such as its potential contribution to jobs,skills dev

107、elopment of the local workforce,and regional expansion plans.Ultimately,the emergence of digital banks will force traditional banks to accelerate the digitalization of their core business process and retraining their talent to brace for this change.The use of digital technologies,big data,and advanc

108、ed analytics will be of huge significance for these banks in their efforts to continue to be the bank of choice for their customers.Special purpose acquisition companies in SingaporeThe Singapore Exchange(SGX)was among the first stock markets in Asia to allow the listing of special puropose acquisit

109、ion companies(SPACs).The SGX introduced a new framework to enable SPACs to list on the exchange,such as minimum market capitalization requirements,minimum SPAC IPO price,and minimum public float,among others.Singapores benchmark index has traditionally been dominated by companies in property and fin

110、ance,but through SPACs,the SGX has set its sights on attracting tech companies.SPACs are essentially shell companies and have no commercial operations.They are formed by investors who are called sponsors with the sole purpose of raising money through an IPO to acquire another company,also known as a

111、 de-SPAC transaction.The process is often faster than a traditional IPO.Other advantages with SPACs are their price certainty compared to conventional IPOS and a SPAC transaction allows the target company to negotiate its own fixed valuation with the sponsors.The SPACs listing frameworkThe key featu

112、res of the SPACs listing framework are as follows:The minimum market capitalization is S$150 million(US$110 million);The de-SPAC(De-SPAC refers to the process where a private company goes public by merging with a SPAC)must take place within 24 months of IPO with an extension of up to 12 months subje

113、ct to conditions;The minimum SPAC IPO price is S$5(US$3.68)per share;At least 25 percent of the SPACs total number of shares issued must be held by at least 300 public shareholders at the time of listing;and All independent shareholders are entitled to redemption rights this mirrors the US SPAC fram

114、ework.23AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Assessing suitabilityThe SGX will also assess a variety of factors when assessing the suitability of a SPAC listing.These include:Profile of the founding shareholders and their experience and expertise in managing the SPAC;Business strategy

115、of the SPAC;Articles of association of the SPAC which provide comparable shareholder protection and rights with that of a Singapore incorporated company;and Nature of the compensation of the management team.Holding the IPO proceeds in an escrow accountThe framework states that at least 90 percent of

116、 the gross IPO proceeds must be placed in an escrow account pending the completion of the business combination.The escrow agent must be an independent institution approved by the MAS and the escrow amount cannot be withdrawn except for the purpose of the business combination,the liquidation of the S

117、PAC,or other specified circumstances.Allowed timeframe of the completion of the business combinationThe SPAC must complete the business combination within 24 months from the date of its listing with an extension of up to 12 months.If the SPAC has not signed a binding agreement by the end of the 24-m

118、onth period,the SPAC can seek an extension from the SGX but with a justification as to why they require the extension.The extension must also be approved by at least 75 percent of the votes of shareholders of the SPAC(excluding the votes of the founding shareholders and the management team).The busi

119、ness combination must result in a sizeable new businessThe initial business or asset acquired(that is,de-SPAC)must have a market value of at least 80 percent of the amount held in the escrow fund.However,the SGX may be prepared to waiver the 80 percent threshold on a case-by-case basis.Appointment o

120、f a financial adviserThe financial advisors role is similar to that of an issue manager in a conventional IPO,and so they must be accredited by the SGX.Shareholders circular must be fully disclosed24AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024The shareholders circular must contain prospectus-

121、level disclosures on key areas such as:Financial position;Compliance history;The integrity of incoming directors;Permits and approvals;and The resolution for the mitigation of the conflict of interests.This is to ensure that shareholders of the SPAC are making informed decisions when approving a bus

122、iness combination.SPAC liquidationThe SPAC will be liquidated if the business combination is not complete within the timeframe or there is a material change to the founding shareholders or management.Upon liquidation,the remaining funds in the escrow accounts will be distributed on a pro-rata basis

123、to all shareholders.Aligning the interests of the founding shareholders with independent shareholdersThe SPAC framework hopes to ensure the interests of the founding shareholders are aligned with the independent shareholders by subjecting the founding shareholders and management to a percentage-base

124、d minimum equity participation(MEP)requirement.The MEP is between 2.5 to 3 percent at IPO,depending on the SPAC market capitalization.Enterprise Enterprise Singapore(ESG)launched the Enterprise Sustainability Program to help Start First and Start RightESTABLISHING YOUR BUSINESS IN SINGAPOREEXPLORE D

125、ETAILS25AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Fast Track Patent ProgramThe Intellectual Property Office of Singapore(IPOS)launched the SG Patent Fast track Program on May 4,2020 to expedite the application-to-grant process of patents in all technology fields to six months,compared to th

126、e typical duration of two years.This was originally a two-year program and was extended to December 31,2024.It replaces the FinTech Fast Track and Accelerated Initiative for Artificial Intelligence programs.There is no additional fee required to participate in the program;however,it is currently onl

127、y available to process five applications per month on a first-come,first-serve basis with IPOS also imposing a limit of 10 requests per year for each entity,whether they are corporates or individuals.The program will benefit innovators who develop products or solutions with short lead times to marke

128、t or short product lifecycles.Furthermore,the positive examination results issued by IPOS can be used to leverage their application to international patent examinations,such as to the ASEAN Patent Examination Co-operation(ASPEC).How do you qualify for the program?There are several criteria applicant

129、s need to fulfil in order to qualify for the program:The application must be filed in Singapore and must not have priority claim;The application must contain at least 20 or fewer claims;and The request is within the cap number of requests of five per month and 10 per year per entity.The monthly cap

130、is reset on the first day of the new month with any unutilized requests rolled over to the next month,subject to a maximum of 10 applications per month.How do you file a patent?The applicant will need to fill out Patents Form 1(request for grant of patent)and Patents Form 11(request for search and e

131、xamination report)using the IP2SG online portal by IPOS.In addition to Patents Forms 1 and 11,the applicant must attach another document tagged as FastTrack.The FastTrack document should contain a cover letter stating the reason(s)for requesting the acceleration of the patent as well as the technolo

132、gy field that the invention belongs to.Some examples for requesting the acceleration process include the invention having a short product lifecycle or a technology that has an environmental or health cause.Once the application has been submitted to and reviewed by IPOS,the organization will issue a

133、Formalities Examination Report(FER).IPOS will inform the applicant if they have been successful in accelerating their grant process.26AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024The applicant must report within two weeks upon receiving the FER and within two months upon receipt of the written

134、 opinion from IPOS.What if the cap on the SG Fast Track is reached for the month?If the cap for the month for the SG Fast Track has been filled,the applicant will automatically be moved to the 12-Month File-to-Grant program.Through this program,applicants can obtain a Singapore patent grant within 1

135、2 months from the filing of the application.Alternatively,applicants can decide not to join the 12-month program and choose to re-apply through the SG Fast Track system in the following month.An important steppingstone to apply for international patentsDue to Singapores robust intellectual property(

136、IP)system and IPOS global reputation,an IPOS patent report can support innovators in their quest to process their patents internationally,such as in Japan,the USA,China,and Europe.Innovators can also benefit from IPOS Patent Prosecution Highway(PPH)program,whereby the examination process of a patent

137、 application to one IP office can be accelerated by referencing the results from another IP office.SUCCEED IN SINGAPORE IMPLEMENTING BEST COMPLIANCE PRACTICES FROM DAY ONEEXPLORE DETAILS27AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Options available to solve legal disputes in SingaporeDisagre

138、ements between businesses are inevitable whether these are contract disputes or client conflicts,etc.One of the best strategies to avoid business disputes is by drafting contracts that clearly define the rights and responsibilities of the parties involved.This will ensure smooth transactions and lea

139、d to long-term,and successful business relationships.When legal disputes do arise,there are several steps businesses can take to resolve them outside of litigation:Negotiations either directly or through attorneys between the parties;Arbitration or mediation this can be done through a private third-

140、party negotiator;or An alternative dispute resolution such as through the courts system,which can be an effective strategy if the party is not responding to your initial correspondence.LitigationSingapore has a two-tier judicial system:the State Courts,where lower-value cases are resolved,and the Su

141、preme Court,which comprises of the High Court and the Court of Appeal.The Court of Appeal is the highest court in the land.The State Courts are divided into District Courts or Magistrate Courts.Both courts hear civil and criminal cases although the Magistrate Courts deal with less-serious cases.Magi

142、strate Court cases are:Civil cases with claims below S$60,000(US$44,484);and Any criminal case with a maximum sentence of less than two years imprisonment.District Court cases are:Any civil case with claims between S$60,000(US$44,484)and S$250,000(US$185,350);or Criminal cases with maximum sentence

143、of between two-and seven-years imprisonment.Specialized courtsSingapore also has specialized courts that deal with areas,such as copyright disputes as well as labor disputes.The High CourtThe High Court can hear appeals from the State Courts for certain cases or select cases that originate at the Hi

144、gh Court level.These include probate cases valued at over S$5 million(US$3.7 million)in addition to criminal cases where the sentence is over 10 years imprisonment or death.28AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Enterprise Singapore(ESG)launched the Enterprise Sustainability Program to

145、 helplocal companies develop capabilities to seize opportunities in the green economy.The sustainability program is part of the governments push to implement the Singapore Green Plan 2030,a whole-of-the-nation movement spearheaded by several ministries to chart Singapores green targets over the next

146、 10 years.Under the plan,the government aims to achieve zero-net emissions as soon as viable in the second half of the century through initiatives like reducing the amount of waste sent to landfills by 30 percent by 2026 and doubling the number of electric vehicles charging points by 2030.What are t

147、he components of Singapores enterprise sustainability program?The enterprise sustainability program has three key component schemes:1.Developing sustainable enterprises;2.Strengthening sector-specific capabilities;and3.Fostering a vibrant and conducive sustainability ecosystem.Developing sustainable

148、 enterprisesUnder this scheme,Enterprise Singapore will provide subsidized training workshops for businesses looking to develop their sustainability programs.These workshops are designed to build awareness and knowledge as well as provide access to the relevant tools to plan for long-term capability

149、 building.ESG has partnered with Global Compact Network Singapore(GCNS),PwC Singapore,and the Singapore Environment Council(SEC)for this scheme.The scheme also supports resource optimization and will help businesses adopt the relevant standards.Finally,ESG will support enterprises to develop sustain

150、able services,products,and other solutions to capture opportunities in the green economy.Strengthening sector-specific capabilitiesPartnering with Trade and Association Chambers(TACs),government agencies,and corporatesis a key element of the program.ESGs partner TACs include the Singapore Contractor

151、sAssociation Limited(SCAL),the Textile and Fashion Federation(TaFF),and the SingaporeFurniture Industries Council(SFIC).Through such partnerships,ESG can facilitate cross-sectorcollaboration for sector-specific training courses,and help businesses uplift their sustainabilitycapabilities throughout t

152、heir value-chains.Sustainability program to help businesses go green29AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Fostering a vibrant and conducive sustainabilityecosystemESG with its industry partners and government agencies aims to strengthen the sustainabilityecosystem through financing,tr

153、aining,certification,among others.One initiative has been the launch of Enterprise Financing Scheme-Green(EFS-Green),a newfinancing scheme to help businesses develop green technologies.EFS-Green covers a rangeof financing needs which include:Developmental capital;Fixed assets loan;Project loan;Trade

154、 loan;Venture debt loan;and Merger and acquisition(M&A)loan.Interested enterprises can approach any of the following approved financial institutions toapply for a loan:DBS;UOB;OCBC;and HSBC.The EFS-Green scheme is open for applications until March 31,2026,offers risk sharing of up to 70 percent to c

155、atalyze the lending from partner financial institutions.The maximum loan quantumvaries for each loan type,ranging from S$30 million(US$22 million)for fixed asset loans andup to S$50 million(US$36.8 million)to finance the M&A of target enterprises related to greeninitiatives.Further,the maximum repay

156、ment period also varies between loan types,ranging from five to20 years.The borrower is responsible for the repayment of 100 percent of the loan,and if adefault occurs,the partner financial institution is obligated to follow their standard commercialrecovery procedure before making a claim against E

157、SG for the unrecovered amount.30AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024In Singapore,Environmental,Social,and Governance(ESG)reporting is increasingly vital as businesses recognize the necessity of addressing sustainability concerns and meeting stakeholder expectations.The Singapore Excha

158、nge(SGX)mandates all listed companies to disclose their sustainability practices and performance in their annual reports through a“comply or explain”approach.What is included in the sustainability report?The sustainability report must include the following components:1.Material ESG factors;2.Climate

159、-related disclosures;3.Policies and targets;4.Sustainability reporting framework and5.Board statement and governance structure for sustainability practices.Material ESG factorsThe company should review the ESG factors concerning the business value chain and its interaction with the physical environm

160、ent and social community.The company must review what ESG factors significantly impact business continuity i.e.the steps involved in creating a product or service.Climate-related disclosuresThe business should provide climate-related disclosures that are in line with the recommendations from the Tas

161、k Force on Climate-Related Financial Disclosures(TCFD).These disclosures are the climate-related risks and opportunities that can impact the companys financial performance.The TCFD has issued both sector-specific and general guidelines on implementing the TCFD recommendations.ESG reporting31AN INTRO

162、DUCTION TO DOING BUSINESS IN SINGAPORE 2024Policies and targetsThe company should outline its targets,performance,and practices related to ESG factors in the sustainability report.Targets should be set for short-,medium-,and long-term timeframes.Company policies related to ESG factors should provide

163、 descriptive and quantitative information about the companys performance in these areas during the reporting period.Sustainability and reporting frameworkThe business should select a suitable sustainability reporting framework tailored to its industry and business model.The business should choose a

164、reporting standard that is internationally recognized as it enables easier comparisons with peer companies either in Singapore or worldwide.Once a framework is chosen,the business should maintain consistency in adhering to that framework from year to year,as it helps the business to improve its repo

165、rting practices.Board statementThe Board of Directors will play a critical role in overseeing the sustainability issues within the company.The board is tasked with identifying the ESG factors that are significant to the companys business and is responsible for managing and monitoring these ESG facto

166、rs.Overall,this guidance emphasizes the Boards vital role in considering sustainability as an integral part of the companys strategy and success.32AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Taxation Corporate income tax in Singapore BEPS 2.0Individual income taxGood and services taxWithholdi

167、ng taxCapital gains taxTransfer pricingProperty taxCarbon taxSingapores double taxation agreement network233AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 20242Singapores favorable tax regime is internationally recognized for allowing entrepreneurs and companies to enjoy low tax rates and numerous t

168、ypes of tax relief through incentives,comprehensive tax treaty networks,and exemptions from certain incomes.Singapore has a territorial tax system,which means that it levies a tax on all income earned in or derived from Singapore.Foreign-sourced income,such as branch profits,dividends,and service in

169、come,are taxed when remitted or deemed remitted into Singapore but will be exempted provided that the income has been taxed in the source country with a rate of at least 15 percent.There is no capital gains tax in Singapore.However,if an individual engages in a series of capital transactions,tax aut

170、horities may interpret this as conducting business activities and assess income tax liability accordingly.Consolidate and improve your Asia tax reporting and compliance with comprehensive services for structuring,planning and compliance,transfer pricing,and financial software localization.Reach our

171、experts at .MANAGE COMPANY TAX AND COMPLIANCE FOR MULTIPLE JURISDICTIONSEXPLORE MORE34AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Singapore imposes corporate income tax(CIT)at a flat rate of 17 percent,which is the lowest among ASEAN member states.The country practices a single-tier corporate

172、 tax system,which means businesses pay CIT only on chargeable income(profits),and all dividends are exempt from further taxation.The low CIT rate has attracted a dynamic investment community into Singapore,comprising of more than 7,000 multinational firms,with more than half operating their Asia-Pac

173、ific business from the country.Businesses that have their income derived from Singapore or income remitted to the country are obligated to pay corporate taxes at a rate of 17 percent on its chargeable income regardless of whether it is a local or foreign company.Taxable incomes include:Profits from

174、trade or business(the single-tier system this means Singapore-based companies will only pay taxes on profits and not on revenue);Royalties and premiums;Rental property income;and Income from investments such as interests.Tax residencyThe tax liability of companies and individuals in Singapore is dep

175、endent on their tax residency status.Resident vs.non-resident companies In Singapore,a company is either a resident or a non-resident.The Inland Revenue Authority of Singapore(IRAS)determines residency by where the company is controlled and managed,or in other words,where it makes decisions on strat

176、egic matters.This means that a companys residency is not necessarily the location of where it is incorporated.For example,a company might be incorporated in Singapore,but be considered a non-resident if decisions are de facto made in another jurisdiction,such as Hong Kong or London.One factor in det

177、ermining residency but not necessarily the only one is where the company holds its Board of Directors meeting.Resident vs.non-resident individuals Singapore citizens and Singapore permanent residents are both considered tax residents.Foreigners are considered tax residents if they:Corporate income t

178、ax in Singapore35AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024 Have stayed or worked in Singapore for(a)more than 183 days in a calendar year in the previous Year of Assessment(YA),or(b)continuously for three consecutive years;or Have worked in Singapore for a continuous period spanning two ca

179、lendar years with the total duration of stay exceeding 183 days,including physical presence in Singapore before and after the start of work.The IRAS classifies non-resident individuals into three different categories:foreign professionals,public entertainers,and board directors.Residency for all thr

180、ee categories depends on whether they spend less than 183 days in a calendar year in Singapore,but they have different obligations for tax purposes.A professional is a non-resident if they are in Singapore for less than 183 days in a calendar year.Examples of foreign professionals include foreign ex

181、perts or consultants invited to Singapore to share knowledge or expertise with an organization,an academic attending a seminar or workshop,or an individual operating via a foreign company.Foreign public entertainers are those who visit Singapore to perform,such as musicians,dancers,actors,and athlet

182、es,and spend less than 183 days in the country.They are classified as public entertainers regardless of whether they are working as individuals or as employees.The IRAS does not include individuals who assist public entertainers with their performances in this category,such as audio crewmembers,chor

183、eographers,coaches,and personal trainers.Finally,board directors,or company directors,are non-residents if they spend less than 183 in a calendar year in Singapore.A board director may also hold another role within a company,such as a chief executive officer or managing director,but they are only co

184、nsidered a board director for income derived in that role.Benefits of being a tax residentQualifying as a tax resident will mean the company is eligible for the multitude of tax incentives the country offers that can lower the total effective CIT tax rate.These incentives include being eligible for

185、new startups to receive a tax exemption of 75 percent on the first S$100,00(US$74,480)of chargeable income and a further 50 percent exemption on the next S$100,00(US$74,480)of chargeable income(available for the first three years of operations).All other companies will receive a tax exemption of 75

186、percent on the first S$10,000(US$7,447)and a further 50 percent on the next S$190,000(US$141.511)of chargeable income.Tax residents can enjoy the benefits from the countrys 100 double tax avoidance(DTA)agreements,enabling businesses to eliminate instances of double taxation between treaty signatorie

187、s.Moreover,tax residents have the advantage of gaining access to the wider Asian markets through the countrys comprehensive free trade agreements(FTA).36AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Singapores Budget 2024 confirmed that the country will implement the Income Inclusion Rule(IIR)a

188、nd a Domestic Top-up Tax(DTT),which will impose a minimum effective tax rate of 15 percent on businesses profits from financial years starting on or after January 1,2025.This will apply to relevant multinational enterprise(“MNE”)groups with annual group revenue of 750 million euros or more in at lea

189、st two of the four preceding financial years(referred to as“in-scope MNE groups”),in line with the Pillar Two Global Anti-Base Erosion(“GloBE”)Model Rules.The IIR will apply to in-scope MNE groups that are parented in Singapore,in respect of the profits of their group entities that are operating out

190、side Singapore.The DTT will apply to in-scope MNE groups in respect of the profits of their group entities that are operating in Singapore.These changes are part of the Base Erosion and Profit Shifting initiative,or BEPS 2.0,a global framework that aims to ensure a fairer distribution of tax rights

191、on large MNEs through a set global minimum tax rate.Base erosion is a practice where companies use tax strategies to exploit gaps in tax rules and shift profits to artificial locations where the tax rates are low or non-existent.BEPS 2.0 is the outcome of cooperation Organization for Economic Co-ope

192、ration and Development(OECD)to tackle tax evasion.Singapore was among 130 jurisdictions to join this agreement in October 2021.BEPS 2.0RELATED READINGSingapore Budget 2024:A Strategic Blueprint for Business Growth and Sustainability.ASEAN Briefing ArticleFebruary,2023In a significant move to bolster

193、 economic resilience and sustainability,Singapores Deputy Prime Minister and Minister for Finance,Mr.Lawrence Wong,unveiled the ambitious Singapore Budget 2024 on February 16,2024.Amidst global economic fluctuations and a pressing climate crisis,the Budget strategically addresses the dual challenges

194、 of rising operational costs and the imperative for sustainable development,marking a pivotal step towards fortifying Singapores position as a competitive and green economy.AVAILABLE HEREThe tax liability of foreigners in Singapore is dependent on their tax residency status.Foreigners are considered

195、 tax residences if they:Stay or work in Singapore for more than 183 days in a calendar year or;Work continuously for three years or more.Tax ratesSingapore levies a progressive individual income tax(IIT)rate on tax residents,with the headline IIT rate currently at 22 percent.The progressive tax rate

196、s on chargeable income for tax residents are as follows:From 2024,Singapore has increased the headline IIT rate to 24 percent.Chargeable income between S$500,000(US$368,000)to S$1 million is taxed at 23 percent,while chargeable income in excess of S$1 million(US$736,000)is taxed at 24 percent.Indivi

197、dual income tax37AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024IIT Tax Rates from 2024Chargeable incomeCredit(%)Exemption(US$)First$20,000(US$14,754)Next$10,000(US$7,400)02S$0S$200(US$147.5)First$30,000(US$22,131)Next$10,000(US$7,400)-3.50S$200(US$147.5)S$350(US$258)First$40,000(US$29,508)Next$

198、40,000(US$29,508)-7S$550(US$405.7)S$2,800(US$2,065)First$80,000(US$59,016)Next$40,000(US$29,508)-11.5S$3,350(US$2,471)S$4,600(US$3,393)First$120,000(US$88,524)Next$40,000(US$29,508)-15S$7,950(US$5,864)S$6,000(US$4,426)First$160,000(US$118,032)Next$40,000(US$29,508)-18S$13,950(US$10,291)S$7,200(US$5,

199、311)First$200,000(US$147,541)Next$40,000(US$29,508)-19S$21,150(US$15,602)S$7,600(US$5,607)First$240,000(US$177,049)Next$40,000(US$29,508)-19.5S$28,750(US$21,209)S$7,800(US$5,754)First$280,000(US$206,557)Next$40,000(US$29,508)-20S$36,550(US$26,963)S$8,000(US$5902)First$320,000(US$236,065)Next$180,000

200、(US$132787)-22S$44,550(US$32,865)S$39,600(US$29,213)First$500,000(US$368,852)Next$500,000(US$368,852)-23S$84,150(US$62,078)S$115,000(US$84,836)First$1,000,000(US$737,705)In excess of$1,000,000(US$737,705)-24 S$199,150(US$14,6914)38AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024The goods and serv

201、ices tax(GST),also known as value-added tax(VAT),is a consumption tax imposed on goods and services in Singapore,regardless of whether they are acquired from domestic or overseas suppliers.As GST is a self-assessed tax,and Singapore-based businesses are therefore required to assess their need to reg

202、ister for GST.Companies must register for GST if they:Earn a taxable turnover of more than S$1 million(US$741,900)during a 12-month period at the end of the calendar year.Expect to earn a taxable turnover of more than S$1 million(US$741,900)in the next 12 months.The GST rate in Singapore is nine per

203、cent as of January 2024.The main justification for this rise is to fund future infrastructure projects and increase spending on social welfare.The GST that is levied on customers is known as output tax,and the GST that is incurred on business purchases and expenses,which includes the import of goods

204、,is known as the input tax.The difference between the output and input tax is the net GST payable to the government.GST treatment of media salesForeign digital service providers must register for GST and charge for GST under Singapores Overseas Vendor Registration(OVR)regime.Previously,only services

205、 procured from local businesses were subject to GST.Digital services include:Downloadable mobile applications,e-books,and movies;Subscriptions to TV shows,music,and online gaming;and Downloadable drivers,software,andHowever,foreign digital service providers need to have a yearly global turnover of m

206、ore than S$1 million(US$737,705)and sell more than S$100,000(US$73,747)worth of digital services to customers in Singapore,before they are obligated to register and charge GST.The IRAS has underlined the basis for which the supply of media sales will be subject to zero percent goods and services tax

207、(zero-rated GST).The change came into effect January 1,2022.Under the changes,if the contractual customer is located outside of Singapore or is a GST-registered person in Singapore,the media sales will be zero-rated.Good and services tax39AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024What do me

208、dia sales refer to in Singapore?According to the IRAS,media sales refer to:The sale of advertising airtime for broadcasting via radio or TV;The sale of media space for online advertising;and The sale of advertising space for hardcopy prints such as on billboards,newspapers,and magazines.The supply o

209、f media sales by local suppliersWith effect from January 1,2022,the supply of media sales is zero-rated if it directly benefits a person overseas or a GST-registered person in Singapore.For the supply of media sales,the comptroller the person responsible for the quality of financial reporting in an

210、organization will regard the contractual client as the sole beneficiary of the services if the following criteria are satisfied:The service agreement between the media supplier and their contractual client does not require the services to be provided to another party;and The supplier only takes inst

211、ructions from the contractual client for the service.The supply of media sales by overseas suppliers to GST-registered businesses in SingaporeSince January 1,2022,if an overseas supplier makes a supply of media sales to a GST-registered person/business in Singapore then the recipient,if they are a r

212、everse charge(RC)business,must apply RC and account for GST on the value of their imported services as if they were the supplier,regardless of the place of circulation of the advertisements.RC businesses refer to those who are subject to reverse charge when they are not entitled to a full input tax

213、credit or belong to a GST group not entitled to the full input tax credit.Previously,the supply of media sales from an overseas supplier to a GST-registered person fell outside the scope of RC if the advertisements were substantially circulated outside of Singapore.The supply of digital media sales

214、by overseas suppliers to non-GST registered persons in SingaporeFrom January 1,2022,the supply of digital media sales by an overseas supplier to a non-GST registered person in Singapore is subject to GST,under the OVR regime.40AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024GST liability on low-v

215、alue goodsSince January 1,2023,Singapore has imposed the GST on imported low-value goods.Low-value goods refer to goods imported by air or post that are valued up to and including the GST import relief threshold of S$400(US$296.56).Non-digital services,such as online training or coaching where the c

216、ustomer is not at the location where the service is being provided,must also pay GST.GST registrationThe way GST is collected depends on the GST registration status of the customer in Singapore.If the low-value goods are sent to a GST-registered customer in Singapore,then the obligation to charge GS

217、T on the imported goods falls on the GST-registered customer,irrespective of the suppliers GST status or whether they are local or from overseas.If the customer is not GST-registered,then the obligation to account for the GST may fall on one of the following persons:The supplier who makes the direct

218、 sale to the customer;Transporters the person that delivers or arranges to delivery the goods to the customer;or The electronic marketplace which acts as the medium for the supplier to supply low-value goods.The mentioned entities should determine their GST liability.Local suppliers,transporters,and

219、 electronic marketplaces must register for GST if they meet the mandatory threshold,which is as follows:1.Under the retrospective basis:The entitys taxable turnover for the past 12 months exceeds S$1 million(US$741,000);or2.Under the prospective basis:The entitys taxable turnover for the next 12 mon

220、ths is expected to exceed S$1 million(US$741,000).For overseas suppliers,transporters,and electronic marketplaces,the GST threshold is as follows:1.Under the retrospective basis:The entitys global taxable turnover for the past 12 months exceeds S$1 million(US$741,000)in addition to overseas supplier

221、s of business-to-consumer(B2C)products or services to non-registered GST customers that exceeds$100,000(US$74,140);or2.Under the prospective basis:The entitys taxable turnover for the next 12 months is expected to exceed S$1 million(US$741,000)or where the overseas supplier of B2C products or servic

222、es to non-registered GST customers is expected to exceed$100,000(US$74,140).Goods and services tax is levied on low-value goods that are imported to Singapore.Businesses should identify whether their customers are GST-registered by requesting their GST registration number for each sale that occurs.H

223、OW GST LIABILITY IS ASSESSED ON LOW VALUE GOODS TRANSACTIONS IN SINGAPOREEXPLORE MORE41AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024The withholding tax only applies to non-resident companies or individuals who have sourced an income from Singapore.The types of income subjected to withholding t

224、ax are:Withholding taxWithholding Tax on Payments to Non-Resident CompaniesNature of incomeTax rate(in%)DividendsExemptInterest15Royalties10Technical assistance and service fees17Rent on moveable property15Charter fees for aircraft or ship0-2Taxpayers do not need to pay any withholding taxes to resi

225、dent individuals and corporations.Singapores standard non-treaty withholding tax rates are zero for dividends,15 percent for interest,and 10 percent for royalties.42AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Withholding Tax Rates in Singapore Nature of income Tax rate(%)Interest,commission,f

226、ee,or other payment in connection with any loan or indebtedness 15Royalty or other lump sum payments for the use of moveable properties 10Royalty and other payment made to author,composer,or choreographer 22Payment for the use of or the right to use scientific,technical,industrial,or commercial know

227、ledge or information 10Rent or other payments for the use of moveable properties 15Technical assistance and service fees Prevailing Corporate Tax rate Management fees Prevailing Corporate Tax rate Time,voyage,and bareboat charter fees for charter of aircrafts Applicable aircraft charter rates Time,v

228、oyage,and bareboat charter fees for the charter of ships Nil Proceeds from sale of any real property by a non-resident property trader 15Distribution of taxable income made by REIT to unitholder who is a non-resident(other than an individual)10Payment to non-resident director 22Payment to non-reside

229、nt professional/foreign firms(unincorporated)15-on gross income or prevailing non-resident individual rate on net income Payment to non-resident public entertainer10-on gross incomeCommission/payment to non-resident international market agent3Source:Inland Revenue Authority of Singapore The withhold

230、ing tax rate for royalties or other payments made to an author,composer,choreographer,or non-resident director increased to 24 percent from January 1,2023.Filing withholding taxesTaxpayers subject to a withholding tax must file and pay the tax to the IRAS by the 15th of the second month following wh

231、en the payment was made.The payment timeframe is based on the earliest date of the contract,invoice,payment,or when the recipient was credited.Taxpayers that miss the filing and payment deadline will be subject to an additional five percent penalty in the form of a late payment penalty notice.Furthe

232、r penalties apply if the payer still has not paid within 30 days of the notices issuance.Individual taxpayers must use the online platform SingPass to e-file withholding taxes.Individuals filing on behalf of an entity,such as a company or trust,must first be authorized on the CorpPass platform.43AN

233、INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Transfer pricingThe Singapore government has developed a comprehensive system for transfer pricing to prevent the abuse of intracompany transactions by companies in the city-state.Being a regional hub for multinational companies,the countrys transfer p

234、ricing regulations ensures that relevant parties do not underpay taxes and aims to prevent the distortion of taxable income.The arms length principleThe IRAS endorses the arms length principle as its standard guide to transfer pricing.Under this principle,profits should be taxed where the real econo

235、mic activities have occurred and where profits are generated.The principle requires that transfer pricing between related parties are equivalent to prices that unrelated parties would have charged under the same circumstances.This involves identifying situations where transactions between unrelated

236、parties that are comparable to the transactions being undertaken between related parties.This is known as comparability analysis.There is a three-step approach to applying the arms length principle:Conduct the comparability analysis;Identify the most appropriate transfer pricing method;and Determine

237、 the arms length analysis.Conduct the comparability analysisUnder this principle,businesses should examine the comparability of transactions following four aspects:Contractual terms of the transaction;The characteristics if the types of goods,services,or intangible properties;Commercial and economic

238、 circumstances;and Functional analysis.Dezan Shira&Associates tax professionals team of tax accountants,lawyers,and ex-tax officials can help on a wide spectrum of tax service areas across all major industries.RELATED SERVICESEXPLORE MORECapital gains taxThere is no capital gains tax in Singapore.Ge

239、nerally,the gains derived from the sale of a property/investment in Singapore are not subjected to tax as it is a capital gain.However,the gains may be taxable if one is the business of trading shares.44AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Identifying the most appropriate transfer pric

240、ing methodThe possible transactional methods are:Controllable uncontrolled price(CUP)method;Resale price method;and Cost plus method.The possible transactional profit methods are:Residual analysis approach;and Contribution analysis approach.What documents need to be prepared?Businesses should prepar

241、e information as prescribed in the Income Tax Act,which include:An overview of the business group that is relevant to the business operations in Singapore;and The taxpayers transaction details with its related parties,including transfer pricing.Taxpayers are not required to submit their transfer pri

242、cing documentation when they file their tax returns but are required to submit their documents within 30 days upon request by the IRAS.45AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Property taxIn 2024,the government increased the marginal tax rates for non-owner-occupied residential propertie

243、s and for owner-occupied residential properties.The rates are illustrated below:Property Tax for Owner-Occupied Residential Properties in SingaporeAnnual valueEffective January 1,2023(%)Effective January 1,2024(%)First S$8,000(US$5,947)00Next S$22,000(US$16,356)44Next S$10,000(US$7,434)56Next S$15,0

244、00(US$11,152)710Next S$15,000(US$11,152)1014Next S$15,000(US$11,152)1420Next S$15,000(US$11,152)1826Above S$100,000(US$74,344)2332Property Tax for Non-Owner-Occupied Residential Properties in SingaporeAnnual valueEffective January 1,2023(%)Effective January 1,2024(%)First S$30,000(US$22,300)1112Next

245、 S$15,000(US$11,152)1620Next S$15,000(US$11,152)2128Above S$60,000(US$44,606)273646AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Carbon taxSingapores carbon tax will be progressively increased from the current rate of S$25(US$18.40)per ton to between S$50(US$37.19)and S$80(US$59.50)by 2030.Carb

246、on Tax Rates in SingaporeYearRate(per ton)2023S$5(US$3.71)2024-2025S$25(US$18.40)2026-2027S$45(US$33.13)By 2030S$50(US$36.81)and S$80(US$58.90)by 2030Taxation of foreign sourced income in SingaporeSingapore began taxing foreign-sourced disposable gains from January 1,2024,with Parliament approving t

247、he amendments to the countrys Income Tax Act.Under the amendments,dubbed Section 10L,capital gains from the sale of foreign assets will be subject to tax if they are received in Singapore and if the relevant entity does not have economic substance in Singapore.How the entity is judged to have econom

248、ic substance in the city-state will be assessed on a case-by-case basis.Singapores Ministry of Finance has stated that Section 10L is aligned with the EUs Code of Conduct Group Guidance(COGC).EU member states created the COGC to promote a fair tax system.Key features of Section 10LWhat is a relevant

249、 entity?Section 10L applies to entities that are part of consolidated multinational entities(MNE)groups where at least one member of the group has a place of business outside of Singapore.As such,domestic groups are excluded.47AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Type of entityConditio

250、ns to qualify as an excluded entityA pure equity holding entity1.The entity must submit regular accounts or statements;2.The operations of the entity are conducted in Singapore;and3.Have adequate human resources in Singapore.Other entities1.The entity manages and performs operations in Singapore;and

251、2.The entity has adequate economic substance in Singapore,taking into account the number of employees of the entity in Singapore,their qualifications,the amount of business expenditure incurred in Singapore,and whether key business decisions are made by persons in Singapore.Further,entities that are

252、 excluded from the scope of Section 10L are those that fall within one of the following categories:Financial institutions;Entities that are exempt from income tax under specific incentives;and Excluded entities.What are the excluded entities?A party is considered an excluded entity based on its depe

253、ndency on being a pure equity-holding entity.Such entities primarily serve the purpose of holding shares in other entities and do not generate income from any source other than dividends received from these shares.Foreign assetsSection 10L also determines whether an asset situated outside of Singapo

254、re can be considered a foreign asset.In particular:Shares in a company or securities issued by a company are situated where the company is incorporated;Immovable property and intangible movable property are situated where the property is physically located;Secured or unsecured debt is situated where

255、 the creditor is resident;and Intangible movable property is located where the rights of ownership for the property can be most effectively upheld.48AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Singapores double taxation agreement networkSingapore has one of the worlds most extensive double ta

256、xation agreement(DTA)networks,attracting international businesses from a multitude of conventional and nuanced industries.DTAs eliminate instances of double taxation from cross-border activities,such as trade,knowledge sharing,as well as investments between two countries.Singapore has signed around

257、100 DTAs with various countries and the full list can be found on the website of the IRAS,the main tax authority in the country.Foreign investors should seek the help of registered tax advisors to better understand how they can benefit from Singapores vast DTA network.These DTAs also include treatie

258、s with ASEANs 10 member states.Income types covered under a DTACurrently,there are several types of DTAs signed by Singapore:comprehensive,limited,and exchange of information arrangements(EOIAs).Comprehensive DTAs provide relief from double tax for all income types between the two signatories.Limite

259、d DTAs,however,only provides relief from income generated from air transport and shipping,and EOIAs are provisions for the exchange of tax information.The tax reliefs under each DTA treaty differs for each country.They normally cover several income types:Tax on royalties;Tax on dividends;Tax on capi

260、tal gains;Tax on interests;Shipping and air transport;Directors fees;Independent and dependent personal services;Researchers;Students;and Income from immovable property.Claiming relief under the DTATo obtain the benefits of the DTA,the company must first submit its Certificate of Residence(COR)to th

261、e IRAS as evidence it is a tax resident in Singapore.Only Singaporean tax residents and the tax residents of the treaty partner are recognized.To qualify as a Singaporean tax resident,an individual must be employed in the country for 183 days or more during the year.For companies,they must be regist

262、ered in Singapore.Tax residents of the treaty partner must 49AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024also submit a COR certified by the tax authority of the treaty partner to the IRAS in order to obtain relief under the DTA.Singaporean tax residents can still avoid double taxation even if

263、 Singapore does not have a DTA with a particular country through the Universal Tax Credit(UTC)scheme.This applies to all foreign taxes paid by a Singaporean tax resident on the following income categories:Royalties derived from outside of Singapore;Foreign income from professional services or consul

264、tancy;Foreign-sourced dividends;and Foreign branch profits.The IRAS will grant the tax exemption if the following conditions are met:At least 15 percent in corporate taxes(headline tax)are paid on the income sourced from the foreign jurisdiction;The company has been subjected to tax in the foreign j

265、urisdiction,this can be different from the headline tax;and The IRAS is satisfied that granting the tax exemption will benefit the tax resident in Singapore.Determining the treatment of profitsDefining a permanent establishment(PE)is an important feature within all DTA treaties in order to determine

266、 the treatment of business profits.The PE refers to the fixed place of business through which the taxpayer carries out their business operations.The taxation of profits falls under the country where the PE is set up unless the company opens a PE in another country.In the absence of a DTA treaty,any

267、profits would mean the PE would bear a double tax burden for the business.This means foreign investors who have a subsidiary company registered in Singapore can take advantage of the countrys DTAs as well as FTAs through ASEAN and Asia.A business is deemed to have a PE if they carry out business act

268、ivities lasting over 183 days in the following places:Offices;Factories;Warehouses;Farm or plantation;Construction or installation site Mines,wells,or quarries;and Workshops.50AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024CASE STUDYRouting investments through SingaporeTo illustrate the benefits

269、 of a DTA,lets take the case study of a Chilean investor in Indonesia remitting their profits through Singapore.If the investors were to execute a direct remittance to Chile,they would be subject to Indonesias CIT rate of 22 percent in addition to a 20 percent withholding tax(WHT)rate applied to div

270、idends,interest,and royalties,due to Indonesia and Chile not having a DTA.Thus,the realized profit is only 62.4 percent of gross total income.When routing the same investment through Singapore,investors would be subject to the same CIT rate but benefit from Singapores DTA with Indonesia,which reduce

271、s withholdings on all fronts.Singapores DTA with Indonesia means that dividends from Indonesia are taxed at 10 percent,resulting in a 70.2 percent retention rate of realized profit.This is also the same when the profits are remitted to Chile since there is no tax on dividends under the Singapore-Chi

272、le DTA.The realized profit is therefore higher compared to the direct remittance to Chile.Post tax profits of:(100-22%CIT)=78%Realized profit=62.4%of gross total incomeRemit profits to Singapore,where the dividend withholding tax is 10%under the DTARealized profit=70.2%of gross total incomeDividend

273、withholding tax of 20%Direct Remittance to ChileRemit profits to Chile,where the dividend withholding tax of 0%Singapore realized profit=70.2%of gross incomeIndonesiaSingaporeChileChileRoute 1Route 251AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Free Trade AgreementsWhat are the types of FTAs?

274、Digital economy agreements352AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Singapores extensive free trade agreements(FTAs)and transparent administrative system have played a crucial role in its transformation into a first-world economy.The country has 15 bilateral and 12 regional FTAs,includin

275、g significant agreements within the ASEAN-China,ASEAN-India,and ASEAN-Hong Kong trade blocs.These agreements offer Singapore-based businesses access to preferential markets,reduced or eliminated import tariffs,and strengthened intellectual property protections.While other regional players maintain s

276、trong FTA networks,none are as comprehensive as Singapores.As a result,Singapore remains the prime location for businesses aiming to expand into Southeast Asia and neighboring regions.Foreign investors are advised to consult registered advisors to understand the benefits available under Singapores F

277、TAs.53AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024What are the types of FTAs?There are two types of FTAs:bilateral(agreements between Singapore and a single trading partner)and regional(signed between Singapore and a group of trading partners).Singapores Bilateral Free Trade AgreementsChina-S

278、ingapore Free Trade Agreement(CSFTA)Peru-Singapore Free Trade Agreement(PeSFTA)European Union-Singapore Free Trade Agreement(EUSFTA)Singapore-Australia Free Trade Agreement(SAFTA)India-Singapore Comprehensive Economic Cooperation Agreement(CECA)Singapore-Costa Rica Free Trade Agreement(SCRFTA)Japan-

279、Singapore Economic Partnership Agreement(JSEPA)Singapore-Jordan Free Trade Agreement(SJFTA)Korea-Singapore Free Trade Agreement(KSFTA)Sri Lanka-Singapore Free Trade Agreement(SLSFTA)New Zealand-Singapore Comprehensive Economic Partnership(ANZSCEP)Turkey-Singapore Free Trade Agreement(TRSFTA)Panama-S

280、ingapore Free Trade Agreement(PSFTA)United Kingdom-Singapore Free Trade Agreement(UKSFTA)United States-Singapore Free Trade Agreement(USSFTA)MERCOSUR-Singapore Free Trade Agreement(MCSFTA)Singapores Regional Free Trade AgreementsASEAN-Australia-New Zealand Free Trade Area(AANZFTA)ASEAN-China Free Tr

281、ade Area(ACFTA)ASEAN-Hong Kong,China Free Trade Area(AHKFTA)ASEAN-Korea Free Trade Area(AKFTA)ASEAN-Japan Comprehensive Economic Partnership(AJCEP)ASEAN-Korea Free Trade Area(AKFTA)ASEAN Free Trade Area(AFTA)Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP)EFTA-Singapore F

282、ree Trade Agreement(ESFTA)GCC-Singapore Free Trade Agreement(GSFTA)Regional Comprehensive Economic Partnership(RCEP)Trans-Pacific Strategic Economic Partnership(TPSEP)RELATED READINGSingapore Signs FTA With MERCOSUR BlocASEAN Briefing ArticleJune,2023Singapore signed a free trade agreement with the

283、MERCOSUR trade bloc which consists of Brazil,Paraguay,Argentina,and Uruguay(Venezuelas membership was suspended in 2016)under the MERCOSUR-Singapore Free Trade Agreement(MCSFTA).This is Singapores first FTA with these individual countries as well as with the Mercosur bloc.AVAILABLE HERE54AN INTRODUC

284、TION TO DOING BUSINESS IN SINGAPORE 2024Determine the relevant FTAs for your target market Determine the Harmonised System(HS)code of your productCheck if your product benefits from lower tariffs Choose qualifying FTA(based on ROO)with highest tariff savingsSend PCO to customer for presentation to i

285、mporting authoritiesReduction in tariffs by importing authoritiesCheck the FTAs Rules of Origin(ROO)to see how quality as Singapore-originatingVisit Enterprise Singapores website for a list of Sinagpores FTAsUse the Tariff Finder Tool to search for the HS code of your product(using relevant keywords

286、-e.g.avocado)in the destination country.Key in the destination country and the correct HS code and compare the tariff rate for your Singapore-originationg product to the generic rate applicable to most countries(i.e MFN rate).Refer to the ROO section for your product to determine the business proces

287、ses necessary to benefit from lower tariffs.Some examples are:Change in HS code during manufacture Minimum%for local value-added contentIf Preferential Certficate of Origin(PCO)is required by your chosen FTAFollow self-certification prcedures as per FTA requirementsIf self-certification is required

288、by your chosen FTASubmit the relevant documents to Sinagpore CustomsGo to Singapore Customs Certificate of Origin website to check document requirementshttps:/www.customs.gov.sg/businesses/certificates-of-origin/overview123456a6b78Source:mti.gov.sgHow to Apply for Tariff Concessions for Exporting Go

289、ods from SingaporeOnce a Singaporean company has identified their target market,they can start applying for tariff concessions through the Enterprise Singapore website.55AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Digital economy agreementsThrough a digital only trade agreement,Singapore aims

290、 to develop international frameworks to support businesses engaging in cross-border digital trade and e-commerce.Digital economy agreements(DEA)will encourage greater cooperation in nascent areas,such as artificial intelligence(AI),and facilitate interoperability between digital systems,providing or

291、ganizations the capacity to trial new technologies across different countries.DEAs are part of the Singapore governments strategy to strengthen underlying infrastructure to build up its footprint as a global tech and e-commerce hub,as well as adding to the countrys extensive free trade agreement net

292、work.Singapores Digital Economy Partnership Agreement(DEPA)with New Zealand and Chile came into effect in January 2021.DEPA was first signed in June 2020 and is the worlds first digital only trade agreement that establishes digital trade rules and digital economy collaborations,representing a new fo

293、rm of economic engagement at a time when many business activities have gone online.On February 25,2022,Singapore and the United Kingdom signed the UK-Singapore Digital Economy Agreement(UKSDEA),making the agreement the first digitally focused trade deal ever signed by a European nation.In addition t

294、o the DEPA and UKSDEA,Singapore has signed the following DEAs:The Singapore-Australia Digital Economy Agreement(SADEA);The Korea-Singapore Digital Partnership Agreement(KSDPA).How can businesses benefit from digital economic agreements?DEAs will establish new approaches to digital trade issues,such

295、as data innovation and ease of cross border data flow to promote AI.The digital economy agreement will ultimately help businesses lower the costs of operations and improve access to each others markets.Paperless tradeA key feature of DEAs is that it will encourage paperless trade,thus reducing time

296、for cargo clearance and any document transits.Technology can be used to ensure document authenticity and provenance,which improves the efficiency of the trade.A Singapore exporter,for instance,can simply apply for an e-certificate of origin and SPS certificate for their shipment.These trade document

297、s will then be sent digitally to the customs of the destination country.56AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Research conducted by Maersk and IBM found that paper trade documents can add as much as 20 percent of the costs of moving goods,in addition to a 10-day waiting time for the d

298、ocuments to be processed.Fintech and e-paymentsDEAs will encourage greater acceptance of e-payment solutions due to greater interoperability between payment systems.This will also enable secure cross-border payments and support more non-financial institutions,such as fintech firms,to offer such serv

299、ices.Moreover,to complement this digital trade agreement,Singapore approved the countrys first digital banking licenses in early December 2020(see Chapter 1),enabling non-bank entities to offer the same services as traditional banks except they operate without a physical setup.Electronic invoicingDE

300、As allow e-invoices in Singapore to be recognized in Chile,UK,and New Zealand in addition to increased accuracy,efficiency,and reliability of commercial transactions.Singaporean small-and medium-sized enterprises(SMEs)can also participate in the countrys e-invoicing network by adopting the Pan-Europ

301、ean Public Procurement On-Line(PEPPOL)e-invoicing solutions.Through PEPPOL,e-invoices are generated,transmitted,and processed digitally,without requiring manual inputs.Digital identitiesDEAs will enable countries to develop safe and secure digital identities.This can significantly streamline busines

302、s processes from opening bank accounts to company registration.Partners can facilitate initiatives that promote compatibility of different digital identity regimes.In doing so,procedures such as Know-Your-Client(KYC)checks by banks can be done more efficiently and in any DEA partner country,since th

303、e bank only requires the companys digital identity.This due diligence process currently can take over three months to complete.Data innovation and artificial intelligenceParties to a DEA will allow data to flow freely across borders which,in turn,facilitates a conducive environment for businesses to

304、 develop new products and services from data-driven innovations.This includes the adoption of an ethical AI governance framework so that DEA partner countries harness AI in a responsible manner.57AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Furthermore,this digital agreement means businesses c

305、an pilot and commercialize their data-driven products and services with overseas counterparts from the DEPA,therefore accelerating cross border innovation.Personal data protectionDEA will ensure greater personal data protection,particularly as data will be transferred across borders.Businesses in Si

306、ngapore can currently apply for APEC Cross Border Privacy Rules(CBPR)certification.If they secure this certification,it will demonstrate the companys robust data protection policies consistent with the APEC Privacy Framework.Further,CBPR certified businesses can exchange data with similarly certifie

307、d companies from across Singapores DEA network,as well as with other jurisdictions that have adopted the APEC CBPR System.58AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Human Resources and PayrollEmployment ActEmployment contractsEmployment permitsIncreased salary requirements from 20254Minimu

308、m wageSocial insuranceTermination of employment59AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 20244Human resource management in Singapore has evolved alongside the dynamic and competitive market environment,particularly from the mid-1990s to the present.National-level human resource policies and s

309、trategies have been developed with the aim of maximizing human capital to support significant economic transformation.The Singaporean government has long advocated for a centralized approach to human resource management,and foreign investment continues to play a significant role.Singapore remains re

310、liant on a large foreign workforce.In this context,it is important to consider the following human resource policies.Build your team in Asia with our Executive Search and recruitment services.RELATED SERVICESEXPLORE MORE60AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Employment ActThe Employmen

311、t Act(EA)is the main labor law in Singapore.The Act regulates employment terms and conditions for all employees under a work contract with an employer.The EA affects all businesses and all employees local and foreign under contract with an employer in Singapore.The EA covers the following:Minimum da

312、ys for giving notice of termination of contract;Actions employers are entitled to upon misconduct of employees;Salary periods,time of payment;Maternity protection and benefits,and childcare leave for parents;and Public Holiday,leave and sick leave entitlements.Important amendments to the Employment

313、ActOn April 1,2019,the Singapore government enacted major amendments to the EA.The changes affect core human resource(HR)and payroll compliances,termination procedures and leave allowances for employers,as well as employees rights in the workplace.The amendments were designed to improve employment c

314、onditions by expanding the qualifying requirements around salary and job grades,resulting in every private sector employee now entitled to the rights and protections under the EA.This was done to closely reflect the changing needs of the countrys employment landscape,with professionals,managers,exec

315、utives,and technicians(PMETs),predicted to make up some two-thirds of the countrys work force by 2030 compared to just half currently.Those excluded under the EA are public servants,seafarers,and domestic workers(they were not included from before)as they are covered by other regulations.Core provis

316、ions extended to more employeesCore provisions refer to employee entitlements given to workmen(manual labor workers or blue-collar workers),non-workmen(non-managers and executives,white-collar workers),and managers and executives(M&Es)earning more than S$4,500(US$3,318.6)per month.After the amendmen

317、t,the S$4,500 threshold was removed,allowing an additional 430,000 M&Es to benefit from employment protection under the EA.The core provisions include:Timely payment of salaries;Paid annual and sick leave;Paid public holidays;Protection from wrongful dismissal;and Maintenance of employment records.6

318、1AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Salary threshold for non-workmen increasedBefore April 1,2019,non-workmen earning up to S$2,500(US$1,843)were protected by Part IV provisions of the EA(which provides for rest days,hours of work,and other conditions of service),with the overtime ra

319、te capped at S$2,250(US$1,659).With the new law in place,non-workmen earning up to S$2,600(US$1,917)are now protected by the Part IV provisions and the overtime rate will be capped at S$2,600.Managers and executives are not covered under the Part IV provisions.New approach to salary deductionsPrior

320、to recent amendments,employers were restricted to specific types of salary deductions,such as those for absence from work or damage to company property and goods.Now,employers can make additional deductions,such as for company insurance plans,provided the employee agrees to the deduction in writing

321、and can withdraw their consent at any time without facing penalties.This arrangement allows for mutually agreed upon deductions while protecting employees salaries.Medical Certificates(MCs)and hospitalization leaveMCs issued by doctors and dentists registered under the Medical Registration Act,1997

322、and the Dental Registration Act,1999 is now recognized,whereas previously only MCs issued by the government and company-appointed doctors were acknowledged.This provides employees with the convenience to visit doctors closer to home.However,this policy does not impact the reimbursement of medical co

323、nsultation fees.Employers are only required to reimburse fees from government doctors or company-approved doctors.Working on public holidaysCompensation for working on public holidays has now been extended to all employees.Previously,when workmen and non-workmen were required to work on public holid

324、ays,employers either provided compensation with an extra days pay or a full-day off-in-lieu.Amended rules allow employers to grant time off for the number of hours worked on a public holiday,rather than the full day.Part IV employees will continue to receive an extra days pay or a full day off.62AN

325、INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Wrongful dismissalThe Employment Claims Tribunal(ECT)manages wrongful dismissal claims,which were previously adjudicated by the Ministry of Manpower(MoM).It adjudicates salary-related claims which were resolved by the Tripartite Alliance for Dispute Ma

326、nagement(TADM)the TADM provided mediation services to resolve disputes before they were brought forth to the ECT.Employees who felt they were forced to resign and can substantiate their claims can submit a dismissal claim.This is described in the Employment Act as:Dismissal due to discrimination bas

327、ed on the employees age,gender,disability,nationality,race or religion;Dismissal to deprive an employee of benefits/entitlements such as maternity benefits and bonus entitlements;and Dismissal to punish an employee for exercising a right such as whistleblowing.Additionally,for M&Es to submit a wrong

328、ful dismissal claim,they need to have served a minimum period of six months at their respective companies.For non-M&Es,there is no minimum service period required.Either party can,however,terminate an employment contract by providing written notice or by paying a salary in lieu of the other party.Im

329、pact for employersThe Employment Act reform brings significant changes to the dispute resolution framework,compensation for working on a public holiday,and salary deductions for employees.The core provisions include having a minimum of seven to 14 days of annual leave,paid public holidays,sick leave

330、,and statutory protection against wrongful dismissal.Employers will need to be more cautious when terminating employees,particularly for higher paid M&Es.The practice of inviting employees to resign,often for the benefit of the employee to keep an untarnished employment record,now posts risks for th

331、e employer as they could result in a claim of constructive dismissal.This could also affect large-scale redundancies and restructuring strategies.Furthermore,under the new EA,employees have the statutory right to buy out their notice period and thus end their employment.This could mean employers may

332、 face the prospect of employees joining competitors as well as having less control over business planning and transitioning.Being aware of the scope of these changes will be especially important for HR departments,who may need to make internal policy changes to comply with the new rules and regulati

333、ons.This could be particularly problematic for companies in fast-moving industries where such mobility provided by the EA could pose business risks and thus will have to develop strategies to address this issue.63AN INTRODUCTION TO DOING BUSINESS IN SINGAPORE 2024Employment contractsThe essential clauses of a contract of service in Singapore include:Commencement of employment,full name of employer