01Modes of expansion into Singapore

Incorporating companies, establishing branch offices or representative offices are typical modes of expansion into Singapore.

The establishment of overseas branches or representative offices is subject to restrictions based on the performance of the parent company in korea. relevant obligations with local Singaporean auditing and compliance, eligibility for tax benefits granted to tax residents, and the scope of activities that can be conducted locally are subjected to the mode of expansion chosen.

Therefore, decision on the mode of entry into Singapore requires: a comprehensive and careful review of the parent company’s current situation, business scope planned in Singapore with licenses if needed, potential plans for listing in Singapore, and eligibility for tax incentives.

02Family office and fund companies

Singapore is actively attracting family offices and fund industries by introducing the variable capital company (VCC) framework, specialized for these sectors and offer attractive tax incentives to funds and fund managers.

ATOZ is capable of assisting with the incorporation of family offices and fund companies, filing of tax and applying tax incentives for funds, as well as supporting Monetary Authority of Singapore (MAS) reports and providing fund administration services.

03Company incorporation

ATOZ is able to assist the incorporation of companies in other jurisdictions beyond Singapore, such as the Cayman Islands, the British Virgin Islands (BVI), and Seychelles.

01Provision of Corporate Secretary

The role of a Corporate Secretary, although non-existent and thus unfamiliar in Korea, is an invaluable and essential component for any company in Singapore. It is not possible to incorporate and maintain a company in Singapore without a Corporate Secretary. In compliance with the Companies Act, the role is primarily responsible for advising directors on the suitable flow of formal decision-making process and arranging for meetings in resolution to these decisions. They also prepare and maintain records relating to these decisions and meetings, ensuring the company complies with all relevant statutory and regulatory requirements.

According to Singapore’s Companies Act, only a resident of Singapore can be appointed as a Corporate Secretary, and to carry out the necessary duties, is required to be equipped with the necessary knowledge and experiences in company law. Should the company have an in-house legal department, they might be able to act as the in-house Corporate Secretary, but most utilizes the services of specialized third-party companies such as ATOZ.

02Provision of a Local Nominee Director

In Singapore, it is a statutory requirement that at least one director of a company has to a resident of Singapore. This requirement for a local resident director is necessary from the incorporation to the winding up / striking off of a company and for foreign companies or foreign investors whose aim is to incorporate a company in Singapore, this can pose as a challenge. To address this issue, ATOZ provides the service of a Local Nominee Director on a temporary basis.

The Local Nominee Director service offered by ATOZ is intended purely to fulfill the statutory requirements necessary for the incorporation and continuity of a company. To minimize potential risks and negative consequences associated with the appointment of a Local Nominee Director, ATOZ ensures that the nominee director is not involved with the company’s decision-making processes and may decline requests for personal information, or signatures required by the company for operational purposes. It should be noted that if the Singapore-based company does not have a management team present locally, the company may be excluded from certain tax benefits provided by the Singapore government or face disadvantages in financial transactions. Therefore, it is advisable to utilize the Local Nominee Director service for minimum necessary duration.

※ Requirements to be a Local Nominee Director in Singapore
- A citizen or permanent resident of Singapore, or a holder of ONE Pass.
- Be issued an EP or PEP under the company’s name (Following the issuance of EP or PEP from the company, there will be no need for the Local Nominee Director service)
- Be an individual who has obtained an EP or PEP through another company in Singapore but has received prior approval from Singapore’s Ministry of Manpower (MOM) to act as a director for the required company

03Provision of a Registered Address

We provide a local office address for registration to respective Singapore authorities. This service includes the routine management of mail - such as collecting, scanning, and email forwarding of any government or financial documentation delivered to the address but the service does not cover phone and fax communications.

01Bookkeeping

The starting point of accounting and tax services is the drawing up of accurate financial statements. Without proper financial statements, tax reporting and accounting audits cannot be conducted effectively, resulting in a lack of critical financial information for strategic decision-making, thereby potentially hampering the company's growth.

For non-publicly listed companies, preparing annual financial statements once a year based on the fiscal year-end is typically sufficient to meet the reporting obligations of the Singapore authorities. However, the need for monthly or quarterly financial statements may arise due to requirements for Goods and Services Tax (GST) filings, requests from the parent company for consolidated financial statements, or internal management purposes.

022. Consolidated financial statements and reporting packages

If a Singapore company has subsidiaries over which it holds control, it is generally required to prepare consolidated financial statements that includes these subsidiaries. Conversely, if the Singapore company is a subsidiary of a parent company based in Korea, the parent company will request the Singapore subsidiary to prepare a reporting package in preparation for the Korean parent company’s consolidated financial statements and notes.

The preparation of consolidated financial statements and reporting packages requires a high level of accounting knowledge and practical experience in either accounting firms or corporate entities. Therefore, obtaining high-quality services can be particularly challenging for firms that primarily perform simple bookkeeping tasks or lack experienced accounting personnel.

03Preparation of unaudited financial reports

If a company is not subject to statutory audit in Singapore, it must prepare an Unaudited Report internally, which is similar in format to an audited financial statements but has not been audited by independent auditors, and signed by the company’s directors before the Annual General Meeting.

If a Singapore company is subject to statutory audit, it must prepare an audited financial statements through a Singapore audit firm instead of an Unaudited Report. The information about which companies must be audited, or which can be exempted from audit can be found in the audit services section in the accounting audit menu.

04Preparation of xbrl financial statements

For companies incorporated in Singapore with corporate shareholders or those that are insolvent, the company must prepare financial statements in XBRL (eXtensible Business Reporting Language) format for submission to Accounting and Corporate Regulatory Authority (ACRA).

01Corporate tax

In Singapore, corporate tax rate of 17% is levied on income derived from Singapore and foreign sourced income that is remitted to Singapore. The tax assessment year typically follows the financial year, with the deadline for estimated tax filings within three months after the end of the financial year and the deadline for final tax filings is at the end of November the following year. Even if a company is not incorporated in Singapore, corporate tax may be imposed if there is a permanent establishment within the country. Additionally, a Singapore branch solely responsible for supporting the headquarters must also recognize revenue exceeding its expenses and is subject to corporate tax filings and payments.

Due to various tax incentives such as corporate tax exemptions for newly established companies, sector-specific tax exemptions and non-taxation of dividend income, and capital gains, the effective tax rate in Singapore is significantly lower than the corporate tax rate of 17%. However, these benefits are typically granted to genuine Singaporean companies. If the company lacks local management, employees, an office in Singapore and its major managerial decisions are made outside of Singapore, it becomes challenging to be recognized as a genuine Singaporean company.

02GST (Goods and Services Tax)

Most goods and services supplied within Singapore, as well as on goods imported into Singapore, are subjected to Goods and Services Tax (GST) at a rate of 9%. However, exports of goods, international services, residential property sales and leases, financial services and offshore transactions (such as goods produced and supplied overseas) are not subject to GST.

Companies (including foreign companies) whose taxable supplies, including both standard-rated and zero-rated supplies subject to GST, exceeds one million Singapore dollars annually, must register as GST taxpayers and are required to report and pay GST on a quarterly basis. Companies whose taxable supplies fall below this threshold may choose not to register for GST.

03Individual income tax

Singapore residents are required to file their individual income tax returns earned within Singapore by April 18th of the following year. The highest individual income tax rate is 24% and the available deductions and limits vary depending on individual circumstances (such as citizenship/permanent residency status, presence of dependents and presence of employment income).

Tax residency in Singapore is generally determined by the number of days stayed or worked in Singapore. Citizens, permanent residents, and holders of qualifying employment passes are considered Singapore residents regardless of the number of days stayed or worked.

04Withholding tax

When a Singapore company pays a foreign company or non-resident for services rendered in Singapore, royalties, or interest, a withholding tax obligation generally arises. The deadline for withholding tax reporting and payment is the 15th day of the second month following the issuance of the invoice or the actual date of payment, whichever is earlier. Withholding tax rates range from 10% to 24% depending on the nature of the income.

If the foreign company or non-resident is from a country that has a tax treaty with Singapore, reduced treaty rates may apply. To avail of these rates, a Certificate of Residence (COR) from the payee’s country of residence is required.

05Stamp duty for shares in Singapore companies

When acquiring shares of a Singapore company, a stamp duty of 0.2% of the purchased price or the net asset value per share, whichever is higher, must be paid. This stamp duty on share transactions is only applicable to the transfer of shares and not on the issuance of new shares.

According to the Singapore companies act, companies that meet the following criteria must appoint a Singapore-based auditing firm to conduct a statutory audit of their financial statements.

Statutory audit requirements in Singapore

- Public Company : Under the Singapore

- Private Company : Companies Act, a private company is subject to statutory audit requirements if it meets at least two of the following three criteria, based on the consolidated financial statements of the group to which the Singapore company belongs, at the end of the last two consecutive financial years
① Total assets exceeding SGD 10 million.
② Revenue exceeding SGD 10 million.
③ A total number of employees exceeding 50.

Audit considerations

- If a Korean parent company invests to incorporate a small-scale company or a special purpose company (SPC) in Singapore, the Singapore subsidiary, no matter how small in scale, must undergo an audit if the group, including the foreign company, meets the quantitative requirements for a Singapore audit based on the consolidated financial statements of the Korean company.

- Companies established in Singapore as branches, rather than corporations, must undergo an audit regardless of quantitative requirements.

- Even if a Singaporean audit is required, if the Singapore company is a dormant company with no transactions, it may be exempt from audit. however, to qualify as a dormant company, it is not sufficient to simply have no revenue; there must also be no expenses such as salaries, operating costs, etc. (some costs, such as legal secretary fees, are exceptions)

- Even if an audit exemption is approved by the accounting and corporate regulatory authority (ACRA) of Singapore, there are instances where an audit may still be required under laws other than the companies act. therefore, deciding not to conduct an audit based solely on acra’s exemption approval carries a risk.

Introduction to ATOZ CAPA ASSURANCE PAC

ATOZ, apart from being a consulting company providing accounting and tax services, owns an auditing firm comprised of over 30 auditing professionals, including 8 Singaporean accountants with more than 15 years of audit experience at major accounting firms in Singapore. Clients of ATOZ can conveniently receive independent audit services through this auditing firm. Throughout the entire audit process, including scheduling, issue discussions, and documentations, Korean accounting experts from ATOZ Consulting, such as CPAs, will assist, thereby alleviating the communication burden with local auditors.

01Fair value assessment for financial reporting

Under the Singapore financial reporting standards (SFRS), fair value assessments are required for various aspects such as the valuation of investments in subsidiaries, investment property valuation, impairment of tangible and intangible assets, and the allocation of purchase price (PPA) during business acquisitions. This necessitates conducting fair value assessments when preparing the company’s financial statements if relevant items are present.

Particularly for Singapore companies subject to statutory audit, it is crucial that auditors verify whether assets or liabilities subjected to fair value assessment have been evaluated using appropriate methodologies and assumptions. Auditors also review whether the evaluators possess the necessary experience and expertise. Consequently, it is common practice to engage a professional accounting firm, equipped with valuation specialists like ATOZ, for such valuation tasks.

02Valuation for calculating tax liability

Unlike fair value assessments for financial reporting, valuations for specific tax payment purposes are sometimes necessary. A prime example is the valuation of unlisted shares according to the South Korean Inheritance and Gift Tax Law, where the valuation proceeds according to a calculation method prescribed by the tax law rather than the theoretical approaches applied in fair value evaluations. Professionals from ATOZ, who are experts in Korean tax law, are available to assist with these valuations under the Inheritance and Gift Tax Law.

In the context of South Korean tax law, situations necessitating such valuations include when a South Korean resident declares overseas emigration and pays exit tax, when a South Korean resident buys or receives shares of a Singaporean corporation, or when a South Korean company restructures under a Singaporean parent company through a process known as a flip. Valuation of unlisted shares are typically required under the Inheritance and Gift Tax Law.

03Singapore flip support services

To attract foreign investors and facilitate entry into overseas markets, many startups opt for a Singapore to enter an industrial ecosystem that is more advanced than Korea, or to bypass Korean regulations. The Singapore flip involves a series of support tasks such as registration, reporting and tax payments in both Korea and Singapore. ATOZ provides a comprehensive one-stop support for all tasks that arise in both countries during the flip process.

01Transfer pricing documentation (TPD)

According to the transfer pricing (TP) guidelines in Singapore, companies with annual revenue exceeding SGD 10 million and engaging in transactions with foreign related parties above a certain threshold are required to prepare TPD(Transfer Pricing Documentation) annually.

The TPD must include details about the group the company belongs to, the status of related parties, transaction details with related parties, and a description of the group’s transfer pricing policy. To comply with the standardization TPD preparation method set by the OECD, a quantitative comparison with other entities of similar industry, size and function is required, making it challenging to undertake internally. ATOZ has a dedicated transfer pricing service team, consisting of professional accountants from the TP teams of major accounting firms, offering high-quality services at reasonable prices.

02Transfer pricing policy advisory and tax audit support

ATOZ provides advisory services to establish a reasonable transfer pricing policy to minimize tax risks by determining the arm’s length price range for transactions (goods, services, etc.) with foreign related parties of Singaporean companies. Additionally, during transfer pricing tax audits by the Singapore tax authorities, ATOZ’s experienced professionals can help minimize tax leakage during such audits.

※ Transfer pricing tax audits
The Singapore tax authorities scrutinize whether companies have timely prepared their Transfer Pricing Documentation (TPD), assessing the appropriateness of the transfer pricing policies included within. Based on the findings, fines or taxes may be imposed if discrepancies or non-compliance are discovered.

03Global minimum tax (BEPS 2.0 Pillar 2) advisory

The BEPS 2.0 framework, announced by the OECD consists of “Pillar 1: Allocation of Tax Rights” and “Pillar 2: Global Minimum Tax”. The implementation of “Pillar 2: Global Minimum Tax” has been prioritized and is being adopted by various countries. South Korea has confirmed the adoption of the global minimum tax starting from 2024, while Singapore is scheduled to adopt it in 2025. Multinational corporations operating across various countries and managing global businesses need to comprehensively reassess their structures and policies for tax optimization from an overall corporate perspective in light of the introduction of the global minimum tax.

04General international tax advisory

We provide comprehensive advisory services on a wide range of cross-border transactions between Korea and Singapore, addressing concerns related to acquiring Singapore permanent residency or citizenship and overseas relocation such as Korea’s overseas relocation tax, capital gains tax, inheritance tax, and gift tax. We also offer guidance on determining residency status under the Korean tax law, the applicability of withholding tax and tax treaty provisions in foreign countries.

Additionally, we assist Korean residents in the process of incorporating and managing foreign corporations including services such as preparing and submitting the necessary documents to Korean regulatory bodies and the National Tax Service (such as reports for direct overseas investment and foreign local corporations), along with related advisory services.

05Income tax reporting for expatriates in singapore

Expatriates dispatched from Korean headquarters to subsidiaries or affiliated companies in Singapore are typically considered a Korean resident under Korean tax law. Thus, the expatriate must first file and pay individual income tax on their Singapore-sourced income in Singapore. Then, when filing their comprehensive income tax return in Korea, they should include this Singapore-sourced income and claim a foreign tax credit for the taxes paid in Singapore.

01Employment Visa application

Singapore employment visas are categorized based on the applicant's experience, educational background, and salary level. Restrictions may apply based on the employing company's local employment ratio, including how many Singapore citizens or permanent residents are employed, which can influence the type of visa for which an applicant may qualify.

02Payroll services

Our services offer calculating salary payments reflecting mandatory deductions, such as the Central Provident Fund (CPF), akin to Korea’s National Pension Service, and contributions to self-help groups. The service also includes issuing payslips, paying CPF and Skills Development Levy (SDL), and reporting employee income to Singapore tax authorities (IRAS). By outsourcing payroll functions, companies can also benefit from enhanced confidentiality and security of internal salary information.

01Account opening assistance

Opening a bank account in Singapore for companies with foreign shareholders or foreign corporate shareholders is not as straightforward or quick as it is for local entities and local residents. Basic documents such as the company's constitution, board resolution for opening the account, identification and proof of address for shareholders and directors are required, and has to be prepared along with concrete evidence that the company is not a shell or paper company and will conduct substantive business in Singapore.

Therefore, it is important to recognize that account opening with Singaporean banks may be challenging immediately after incorporating a company in Singapore. Consulting with professionals who are well-versed in the current local context to choose the best approach for the company's situation is advisable.

02License application

Depending on the business sector your Singapore company operates in, obtaining licenses from the relevant authorities may be necessary. This includes licenses from the Monetary Authority of Singapore (MAS) for financial services, import/export licenses for specific products, and business licenses for the F&B sector, among others.

03Trademark registration application

Evaluating the potential for conflict with existing trademarks in Singapore before proceeding with trademark registration can increase the chances of success. Our firm is a specialized institution for trademark registration in Singapore, selected by the Korea Agro-Fisheries & Food Trade Corporation (aT).

04Notarization services

We offer notarization services for various official and private documents in Singapore and Korea. Notarization in Singapore can be more complicated and time-consuming compared to Korea, which could be cumbersome if handled personally.
By entrusting us with the notarization process, you can receive your notarized documents in Singapore quickly and conveniently.