Banking and Accounts

Banking in Singapore

5/15/2020 8:00:00 AM
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If you are looking for synonyms for free-market or business-driven economies, Singapore is one of them.

The island is one of the three city-states of the world, alongside Monaco and the Vatican City. However, of the three, it's the only one that's not a microstate, and that has full UN membership.

This small island-city of five million inhabitants has a profound significance for the global economy and is considered to have the second-highest GDP per capita on the planet.

The key? The freest economy in the world. After Hong Kong dominated the ranking of the Index of Economic Freedom for remarkable 25 years, Singapore finally took the position in 2020.

The government fights corruption hard, and the country has an effective judiciary. The corporate tax rate is a two-bracket 8.5 % and 17 % depending on the income, with no capital gains nor dividends tax.

While the personal income tax rate goes from 0 to 22 % depending on the overall income, but, as we already pointed out, there is no capital gains tax. Likewise, the Singaporean tax system is territorial, meaning that only Singapore-sourced income is taxed. In fact, under certain conditions, the corporate foreign-sourced income remitted to Singapore may be tax-free.

Furthermore, Singapore offers tax breaks for startup companies, foreign banks, offshore funds, and global trading companies.

Thus, you have an overall strong judiciary and regulatory compliance, a free economy with one of the most pro-business governments in the world, with a terrific and straightforward tax system.

That's the key to Singapore's success.

However, how did the country get to this point?

A little history

After more than 100 years of British rule, during WW2, it was occupied by Japan, which left the island impoverished. It gained independence from the UK as a part of Malaysia in 1963.

Nevertheless, after racial turmoil, the island was literally expelled in a unanimous parliamentary vote from the federation.

Singapore was left alone amid an unemployment crisis, with an uneducated population, no natural resources nor infrastructure.

How did it become one of the world's largest financial centers? With a mix of soft authoritarianism and free market policies.

Lee Kuan Yew was Singapore's Prime Minister from 1959 to 1990, and his party, the People Action Party, has been the ruling party for all of Singapore's independent history.

When the country gained its independence, the government promoted five and ten-year tax holidays to foreign companies. The port gave the island a favorable position to export processed products and to import raw materials, which led the country to a quick industrialization, to such a point that the country became the third oil-refining destination on the planet in the 1970s.

Likewise, as the shipping and the port grew, the service industry developed. English was adopted as the schooling language to turn the island into a cosmopolitan place where citizens from all nations could do business, and the education system was significantly developed to fill the skilled workforce needs on the island.

However, some services remained nationalized, and a form of pragmatic Keynesianism was still predominant in most of Singapore. That was until 1985, where modern Singapore came to be. After a substantial recession, the country embraced free-market capitalism. This led to wages and services liberalization and privatization of public companies. Thanks to this,  in the 2000s, the country was not only an industrial hub but also a top financial destination.

And that's what interests us. Singapore has developed its financial system, banking has grown, and many investors are looking further to Singapore, especially after Switzerland imposed new taxes.

That means Singapore is playing in the big leagues. It can be said it is a top-5 financial destination. The demand for bank accounts in Singapore is growing enormously.

It's a politically and economically stable country that has earned the trust of high net worth individuals and investors across the world to keep their money safe. Furthermore, banks use cutting-edge technology for their processes, platforms, and security. Innovation has been a priority for the banking sector, leading it to a top position.

All this led the Monetary Authority of Singapore, the Singaporean central bank, to even win the 2019 award of the best central bank on the planet in the Central Banking Awards. The bank has strengthened its monetary and credit policy and has a sound innovation strategy, which has helped the country turn into a top financial destination. 

In total, Singapore has 127 commercial banks, five local, and 122 foreign. From these 122, 28 are entirely foreign, 56 partially foreign, and 38 are offshore banks.

They offer three main account categories:

  • Checking accounts for individuals

  • Corporate accounts for banks

  • Saving accounts and asset management, including priority banking and private banking

From all these options, foreigners can have access to the last two and priority banking is a top service. It is offered to high net worth individuals and investors that deposit and spend large sums of capital with assets in cash, savings, and securities such as bonds and shares.

In return for your cash flow, banks will treat you as a VIP client, which comes with lower interest rates, better exchange rates, lower fees, and better loan conditions. You will even get a personal banking manager to handle your transactions in Singapore and be at your service when required.

Singapore is a top financial destination, which means it's not easy to open a bank account in Singapore. Non-residents must be personally present when opening a bank account in Singapore and have to meet specific requirements of average balance and minimum deposit. 

Nevertheless, Singapore is one of the top financial destinations in the world, especially if you're looking to expand to the Far East.

Because of these reasons, opening a bank account in Singapore can be your first step towards operating a business in the country. And, guess what? We can also offer top corporate solutions in Singapore!

If you want to know more about our corporate services in Singapore, click here and check our article 

If you're not yet entirely convinced, let's see the benefits you may obtain from a Singaporean bank account.

Ask for more information

Why Singapore? Seven reasons why you should open a bank account in Singapore.

The safest banks on the planet

Singapore has three main banks that concentrate 80 % of the banking operations. They are positioned among the top-10 of the safest commercial banks on the planet, according to Global Finance. Other Singaporean Banks are subsidiaries and branches of well-established foreign banks, meaning they are also a safe place to deposit your money.

In conclusion, Singapore offers some of the safest banks in the world and the best monetary authority on the planet in one place.

A perfect storm

Singapore relies heavily on foreign cash flow. Thus, the banking sector has to be uber-safe and offer an overall better banking experience than in other parts of the world. It's not just about a pro-business government, but a government that needs business to survive. Therefore, the banking and overall commercial regulations are directed towards providing clear rules for participants.

A top financial destination with plenty of room for growth

Just to name a few stats: the internal credit to the private sector represents 130 % of the GDP and a meager 1.2 % morosity rate. It's the third on the list of banking sustainability, and fourth in SME financing.

The central bank and the government are committed to use cutting-edge technology and to stabilize the system further. Furthermore, its broad support for startups and SMEs, especially those related to fintech, may lead to more innovation in the market.

The freest economy in the world

After 25 years of Hong Kong's dominance, Singapore was considered the freest economy in the world by the Index of Economic Freedom. The country boasts a robust and impartial judiciary, with little-to-none corruption, a sound macroeconomic policy that guarantees fiscal health, flexible working legislation, and a favorable tax regime.

Opening a bank account in Singapore can be the first step towards doing business in one of the top financial centers of the whole world.

Fantastic online banking

Singaporean banks offer non-residents the possibility of accessing their accounts remotely and conducting all their primary operations online. They provide terrific attention for their clients, and all systems of online banking work in English, and communications with the bank can also be in English.

Multi-currency accounts

Most Singaporean banks allow you to handle a pool of around 10 to 12 currencies in your bank account. This is fantastic for you as it will enable you to diversify risk between different currencies and to receive payments in a large variety of currencies.

Ease to do business

Opening a corporate bank account in Singapore is the first step towards leading your company to operate in one of the top financial centers of the planet. And guess what? It's incredibly simple to do business in Singapore. 

The private sector is the driver of the economy, and the government knows it. That's why Singapore has been in the top-three of the Doing Business report for the last 12 years. In particular, it is terrifically simple to start a business (you can do it in a day-and-a-half), deal with construction permits, and pay taxes.

Who are we, and what can we do for you?

Opening a bank account in Singapore is a must for every business that wants to go global, and especially for companies wishing to expand their operations into the Far East.

However, it's not simple. As with most large financial centers in the world, banks are overtly-careful regarding who they open a bank account to.

In fact, banks require the physical presence of a director or representative of the company to open the bank account.

Likewise, they cannot open accounts for individuals from certain countries that have received sanctions by the Singapore government, and some banks add certain other nationalities or types of companies to that list. Still, these policies vary from bank to bank.

Furthermore, you have almost 200 banks in Singapore from which to choose.

How are you going to do it? You need an expert helping hand.

And that's where we come in.

Our experts have more than 25 years of providing top-notch financial and second passport services. We've helped high-net-worth individuals and investors around the globe to freely conduct business thanks to our services.

During all this time, we've built a priceless network of experts and partners, all around the world and especially in Singapore.

That is why we consider ourselves to be a serious and trustworthy global financial services provider.

And guess what? We work with a plethora of allied banks from where we can help you choose the one that best suits your profile. 

What will they consider regarding your profile?

  1. The country where the company is registered

  2. The residence of the beneficiaries

  3. Activities of the company

  4. Volume of transactions

  5. Banking residence

  6. Reasons to open a bank account in Singapore

As usual, we work with a pre-approval system. That means we send your profile to a series of prospective banks to see which of them may be interested in starting a financial relationship with you. This doesn't guarantee success, but it exponentially improves your chances of obtaining a positive response from the bank and also saves time cause you will have to send the documents only to those banks that have pre-approved you.

How is the process to open a bank account in Singapore? It's relatively simple.

You'll need to give us the following documents for the pre-approval:

  • Proof of residence of directors, owners, and signatories

  • Certified copy of the company statutes 

  • Certified copy of the commercial profile 

  • Signed resolution that authorizes the opening of the account

  • Certified copy of the articles of association

After the pre-approval, you must be physically present in Singapore to submit the documents and the application. From that point, the bank may take at least a month to respond to the application.

Opening a bank account in Singapore can be a bothersome process, from choosing the best bank for you to complying with the requirements. However, it is a need. Today, there are only a handful of solid, developed, and open jurisdictions where you can do business and protect your assets freely and with top technology. Singapore is one of them.

Do you want your business to go global and expand to the Far East? Opening a bank account in Singapore can be the first step. Enquire now!

Contact us now!

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