Why Do Startups Prefer Virtual Offices

Why Do Startups Prefer Virtual Offices

For many, the allure of being your own boss and the freedom that comes with it is more than appealing. However, thousands of enterprises open up every month, but only a few survive the treacherous waters of doing business. One of the main shortcomings that startups have to put up with is lack of a physical business address. In developed countries like Singapore, it is compulsory for any legal entity to register a business address, in order to comply with regulatory requirements.

While it is important to have a registered business address, this is often not a viable option for startups. New entrepreneurs might not have the necessary funding to invest in a business address. Using a home address, as a business address becomes one of the acceptable alternatives. However, this is not always the best choice, especially when trying to portray a professional image to prospective clients. Remember, image is everything in business, and having a professional image can make all the difference between building a reputation and attracting new customers. Additionally, having a registered business address can go a long way in instilling a sense of legitimacy.

Corporate clients may be put off when a residential address comes up during a business profile search. For this reason, it is always a good idea to have a registered business address, and this is where the notion of virtual offices comes in. In essence, a virtual office is a service that facilitates the normal running of business functions from any location. For a small fee, an entrepreneur is able to access the services of a virtual office. These services include a professional address, a virtual assistant and mailing service, among others. To protect the professional image of a startup, a virtual office service provider can direct mails to the entrepreneur’s home address, without revealing the actual address of the business owner.

Benefits of a Virtual Office

  • Address Requirement

A valid business address may be necessary for various reasons. Firstly, when registering a business in Singapore, it is mandatory for a company to provide a valid office register address. Additionally, most online auction sites require sellers to indicate a valid address for purposes of verification and for exchange or return purposes. Virtual office addresses fulfill this requirement and that is why they have become tremendously popular with most startups. For a foreign company with their business register in Singapore, a virtual office provides a local address, which may make the company to be in good standing with local customers. For a Singapore company with no physical office, having a virtual office will make the business better image and better manage their important business documents.

  • Cost Effectiveness

Subscribing to a virtual office service is much cheaper than renting a physical office space. Importantly, startups that use virtual offices only pay for what they need. Entrepreneurs do not have to invest in office furniture or other office equipment. Additionally, they do not have to worry about paying rent and utility bills. Services such as mailing, meeting space can be added to a package when the need arises. The ability to pay for a service only when the need arises, makes hiring a virtual office cost effective.

  • Legitimacy

Issues with legitimacy may arise, if a company does not have a physical office space or a registered business address. Nevertheless, by using a virtual office, issues with legitimacy will no longer be a problem. A virtual office provides services similar to a conventional office, including a prestigious address. Interestingly, customers seem to have more faith in a business that has a prestigious address. Having a prestigious address tackles not only the issue of legitimacy, but also handles the question of customer trust.

  • Continuity

As a company grows, the demand for more office space is not an option. However, moving from one office to the other after every few months is not a good idea. It disposes the growth of a business and affects customer retention. Having a virtual office is a viable option in realizing business continuity. Rather than move to a different office, a virtual office accommodates extra services that a business might need.

The benefits of utilizing a virtual office are many. Startups have since blossomed into large companies, by simply using virtual offices. It is true that physical offices are still important for any business setup. Nevertheless, in view of all the benefits that virtual offices bring, it will continue to be a popular choice for many businesses.

For more information on our company registration and virtual office services, please contact us or book your appointment online.

Different Ways for Foreigner Register Company in Singapore

Different Ways for Foreigner Register Company in Singapore

In 2016, Singapore ranked second in the ease of doing business index. Its sound financial system, tied with an advanced infrastructure, communications network and a stable political environment, makes Singapore an appealing destination for most multinational companies. Singapore’s Economic Development Board has done a wonderful job in offering incentives to multinational companies. Foreign companies seeking to set up their headquarters in Singapore are entitled to concessionary tax rates which range from 0 % to 15 % for up to five years.

The country also offers an extensive network of trade agreements, covering over 20 free trade areas in 27 economies and 71 double taxation agreements. In view of all these incentives, it is not surprising to find a considerable number of foreign firms forming the core of Singapore’s mainstream industries. The Accounting and Corporate Regulatory Authority (ACRA) is mandated with the task of registering all businesses, including foreign companies. Foreigner must engage the services of a registered filing agent (e.g. accounting firm or corporate secretarial firm, law firm) to perform their company registration.

Multinational companies may register company in Singapore using three distinct structures. These include:

• Subsidiary Company
• Branch Office
• Representative Office

Subsidiary Company

A subsidiary company is a private legal entity that is set up locally as a private limited company register with majority shareholding foreign-owned. In Singapore, registration of a subsidiary takes 1 to 2 days. The government treats a subsidiary company as a local entity, and thus, the parent company is exempted from paying taxes.

Nevertheless, a foreign subsidiary company is required to appoint a locally resident director (“nominee director”) and the company must comply with the Companies Act, which requires local companies to adhere to various regulations such as appointing company secretary in 6 months and holding an Annual General Meeting in 18 months.

Since a subsidiary is considered a separate entity from the parent company, it can adopt a different name from that of the main company, upon approval by the Registrar of Companies. Additionally, it is important for a company to maintain a registered office in Singapore and keep all its legal documents in that office.

Branch Office

Another way that multinational companies can establish themselves in Singapore is by opening a branch office. A branch office is a legal entity that is treated as an extension of the parent company rather than a local resident company. In view of this, the parent company is responsible for all obligations and liabilities incurred by the local branch. Unlike subsidiary companies, which often receive tax exemptions, branch offices are not eligible for these exemptions. This is because they are not considered local companies.

Approval times for registration of branch offices takes less than 2 days. However, the name of the branch cannot be different from that of the parent company unless otherwise stated by the Registrar of Companies. For a branch office to operate in Singapore, the company must appoint two agents who are residents in the country. Additionally, the office may only participate in activities similar to those of the parent company. Local corporate tax applies for operations within the country.

This option is particularly popular among banks and financial institutions who want to extend their operations in other countries. In Singapore, financial organizations and insurance companies have to approach the Monetary Authority of Singapore, to register their branch offices.

Representative Office

In some instances, a company may see the need to carry out a feasibility study before setting up business in Singapore. In this case, a representative office is the best structure for such an undertaking. A representative office is a temporary setup that does not have a legal status. Singapore is open to all types of business, and multinational companies are invited to carry out market research before settling in the country.

In contrast to the aforementioned structures, a representative office is not allowed to participate in any commercial activities. The office can only carry out research on the possibility of setting up in the country. In view of this, a representative office is not obliged to pay any taxes or any fees. However, the office has to undergo registration and can employ a maximum of five employees. Unlike the aforementioned structures, which have indefinite validity, a representative office is subject to renewal annually and may exist for up to 3 years, after which it has to cease operations, or choose to upgrade to a branch offices or a subsidiary.

A foreign company should consider and explore its options carefully when setting business in Singapore. Making the right decisions and choices will be critical in making sure the company’s presence in the Asia Pacific region is an enduring one.

For more information on our company incorporation services and company secretarial services, please contact us or book your appointment online.

Leave Company Incorporation And Corporate Secretarial Services To The Experts

Leave Company Incorporation And Corporate Secretarial Services To The Experts

There is no better place to do business than Singapore. The economic structures put in place by the Singaporean government make for a good atmosphere for business growth and harnessing opportunities. In addition to that, the internet has made it easier to access information; something that has seen more people entering into the business world to seize opportunities. It is so good to see that more youth are catching up on entrepreneurship. Records from the Accounting & Corporate Regulatory Authority (ACRA) show that more than 6,000 business entities were set up in the first half of 2016 alone.

While the government in Singapore does a lot to foster the growth of SMEs and ensuring that aspiring business owners are able to set up legal corporate entities by themselves; it is important to engage proper planning. It is also important to get professional company registration services in Singapore. This is because the legal obligations of setting up legal entities are complex especially when it comes to Private Limited Companies.

ACRA has made it easy for anyone wishing to set up a Private Limited company to do so on BizFile. BizFile is a one-stop business portal for both the public and business owners. Anyone can set up their business within an hour on BizFile as long as they have all the necessary company, personal details and that the name of the company does not contravene rules set by the government. Registering a company name will only cost S$15 and incorporating a company will cost S$300. The initial set up process has been made simple, seamless and hassle-free thanks to technology. While it is so easy to get going in business, it is equally easy to get caught in the web of legal obligations that come with legal corporate entities later.

There are statutory obligations set by ACRA that companies should meet, and the Singapore Companies Act necessitates companies to appoint a local Company Secretary within 6 months of incorporation. The act also requires that a company holds its first Annual General Meeting within 18 months of its incorporation. These requirements are quite straightforward, at least on paper; the challenge usually comes when fulfilling them. During the day to day running of the business, such obligations as required by the government are easily overlooked. Clearly, the last thing on your mind when you are chasing after a sale is holding an annual general meeting. Being that as it may, if obligations are not fulfilled, the business will be penalized, something that will work against the revenue.

An annual general meeting has nothing to do with assembling together to muse over the events of the previous financial year. It has to do with serious business and is monitored by the government. Therefore, there is a need for the meeting’s agenda, structure for the meeting and someone to take the meeting through. There are other important issues that business owners should worry about. Some of those issues include the establishing and maintaining statutory registers and filing changes within the company with ACRA. There are more technical tasks like transference and issuing of shares, appointments, and resignation of officers and changes in the Memorandum of Articles of Association. These tasks would be better handled if they were left to company incorporation experts.

There is much more security for your business if these obligations are taken care of by an outsourced company that is dedicated to handling matters that deal with legal and technical obligations of a business. By doing this, you get to relinquish the legal burden from the business owners. This way, business owners will not miss statutory deadlines. They will have ample time and peace of mind to enable them to focus on business and growing the company. The business will in this way grow comprehensively in profitability and sustainability of the company.

There are proficient company secretarial service providers that will professionally help you handle the legal matters of the business. All you need is enough information to enable you to make informed choices on just which one is the best for you in light of the requirement of your business.

For more information on our company incorporation services, please contact us or book your appointment online.

Singapore GST Claim Procedure For Eligible Companies

Singapore GST Claim Procedure For Eligible Companies

Goods & Service Tax is a levy similar to what other countries referred to as Value Added Tax. It is charged on domestic use of goods and services and was instituted in Singapore back in 1 April 1994. The GST is tailored to enable the government to collect the much-needed revenue without making income tax expensive for the general public.

Relatively, Singapore has one to the lowest GST rates in the world at 7%. Businesses in Singapore that file in turnovers of over 1 million are mandated to collect GST on all the sales of the products and services; thus acting as collection agents on behalf of the government of Singapore. These companies are usually given a period of one month after filling their quarterly tax obligations to submit the GST collections to the Inland Revenue Authority of Singapore.

Like consumers, businesses are obligated to pay taxes on the goods and services that they purchase where the vendors of those goods and services are GST-registered businesses. However, unlike customers, businesses are able to claim the taxes paid in the purchase of such taxable supplies. On the production and consumption chain, the domestic consumers come last. This means that they have to absorb all the GST on their purchases. Businesses, on the other hand, have the opportunity to produce taxable goods and services for other business and customer eventually. For instance; an ice cream maker that pays GST to her supplier of milk, flour and eggs is in a position to claim the taxes paid to it because the ice cream it produces still attracts GST. So, given that a business has satisfied certain criteria put in place by the IRAS, businesses can claim GST incurred by their purchases. This is called input tax.

Companies are in a position to claim input tax that has been incurred in its purchases which contribute to the production of taxable supplies to consumers. For instance, an importer of iron ore can claim input tax incurred in the importation of ore since the product will be in turn sold to steel manufacturers who will be required to pay GST on those purchases.

The IRAS makes provision for input tax claims on non-residential property purchases. Any company that engages in the acquisition of commercial and industrial property is able to claim input tax because the property will eventually participate in the production of goods and services that will attract tax. For instance, when a food manufacturer pays a property developer GST for the acquisition of a strata-titled food factory, it follows that the factory will be used for the manufacture of processed foods that will then be subject to GST. The initial input tax can be claimed by the manufacturer as the manufacturer collects GST from the supermarket. IRAS allows the claim of GST incurred in property conveyance alongside other professional services.

Realtors encourage business owners and investors to incorporate their businesses as companies and have them GST-registered when they acquire industrial and commercial properties. The IRAS has put in place guidelines to ensure that the tax claim system is not taken advantage of. Some of the guidelines include restricting individuals from claiming GST for the mere reason of cutting costs.

Every company registered with the Accounting & Corporate Regulatory authority (ACRA) has a definite prescribed accounting period that usually ends on 31 March, 30 June, 30 September and 31 December. At the end of every period, the company is required to submit their GST to the IRAS. The company is required to submit both the input and output taxes. During the collection of taxes by commercial vendor, a tax invoice is provided instead of a receipt that is usually used in the event the vendor is non-GST registered. When the tax collection is done by the Singapore Customs, the tax is accounted for in the import permit.

In every case, the companies claiming input tax must ensure that they make clear the basis of their claim on the input tax. The companies are also required to ensure that they have original tax invoices or import permits when they are going to make a claim.

It goes without saying that the claimants can only claim input taxes incurred during the associated accounting period. It is therefore important for companies to get the services of a professional accounting firm. A professional accounting firm will ensure that tax invoices are matched correctly so that you do not miss their GST refunds.

With a proper tax procedure in place and all companies playing their part in the marketplace, both the economy and companies will continue to grow.

For more information on our accounting & tax services, please contact us or book your appointment online.

IRAS Tax Incentives for Companies Based in Singapore

IRAS Tax Incentives for Companies Based in Singapore

Singapore has always encouraged its citizens to become entrepreneurs, and at the same time been active in attracting foreign business to the island state through foreign direct investments (FDI). Business owners are provided incentives via various initiatives started by a number national agencies in their respective fields, to take the plunge. Of interest is the Inland Revenue Authority of Singapore or the IRAS, which has played a vital role in making it more enticing for corporations considering the option of expanding to Singapore as well as people starting a new business.

Low Corporate Tax Rates

The country is among those with the lowest corporate tax rates globally at a record 17 percent. Many organisations can now place more focus on improving the business and making more profits to expand and grow. In comparison with other nations, Singapore is among those that offer the better rates. These other countries include the US, whose rate stands at 40 percent. In the UK, for instance, the rate is around 20 percent. Australia seems to be on a different level, standing at 30 percent.

The corporate tax rate in Singapore has been going down for the past ten years. In 2005, it fell from 20% to around 18% three years later. It further reduced to 17% in 2010. The reduced tax rate has managed to attract multiple MNCs to pitch camp in Singapore. The low tax rate has also led many entrepreneurs to start businesses in the country.

Lucrative Policies and Grants

Apart from the reduced tax brackets, the IRAS has set up a series of tax incentives to ensure that Singapore attracts more businesses.

Some of the guidelines include the Tax Exemption Scheme For New Start-Up Companies. New start-ups are exempted on the initial S$100,000 normal chargeable revenue. The firms also only pay half on their next S$200,000 on their normal chargeable revenue. All this is valid for the initial three years of running the business. The agency appreciates that all new businesses undergo this critical phase before gaining stability. It is for this reason that the companies are given a helping hand on their taxes to ease the burden. This scheme applies to all organisations that do not engage in investment operations and are not working to develop any form of property to be sold.

Another plan set up to improve business conditions in Singapore is the corporate tax rebate, which helps business owners defray increasing operation costs. The rebate was initially placed at 30 percent, but in order to address challenges arising from the market conditions. The government improved the policy in the year 2016. For the Years of Assessments (YA) 2016 and 2017, all corporations get a 50 percent rebate on all corporate tax. The rebate is capped at S$20,000 per YA. In assisting firms by cutting down the corporate tax load, they are better placed to improve their liquidity.

Aside from tax incentives, the Singapore tax agency has other policies to help companies in various ways. For instance, the IRAS shares 40 percent of the pay increases allocated to Singapore citizens who earn up to S$4,000. Although it is not a long-term measure, the Wage Credit Scheme (WCS) has helped many firms to deal with increasing cost of labour.
Another grant issued to businesses is the Productivity and Innovation Credit (PIC) scheme. It defrays businesses operation costs as the state offsets 40 percent of the qualifying expenses for companies.

Another tax incentive of interest is the Mergers & Acquisitions (M&A) scheme catered to the larger corporations, easing the way for them to expand through acquisitions and mergers. The state has increased the ceiling to qualify for this policy from S$20 million to S$40 million. It promises a 25 percent levy reduction on some transactions as well as relief on stamp duty.

The grants and incentives issued by the Singapore government are meant to support business growth in Singapore. It aims to liven up the local business scene as well as attract foreign investments. In such a business-friendly environment, it is now on the entrepreneurs and corporations to make the obvious choice.

For more information on company incorporation services and accounting & tax services, please contact us or book your appointment online.

Singapore – The Regional Headquarters of Major MNCs

Singapore – The Regional Headquarters of Major MNCs

For many years, Singapore has been the preferred home for many global businesses. This is due to its developed infrastructure, business friendly policies, political stability, strategic location, skilled workforce and the favorable intellectual property rights laws. Global businesses have found it easy to establish their regional headquarters in this business friendly country. In fact, over 7,000 multinational companies have established their operations in this country.

The sound infrastructure makes doing business in Singapore easy and favorable. The existence of good road networks has attracted many manufacturing businesses such as a large Dutch multinational firm – which blends chemicals and fuels for petrochemical clients. It is due to the highly developed transport infrastructure, business friendly environment and the presence of other global petrochemical players that the firm has decided to establish its Asia Pacific headquarters in Singapore.

Secondly, it is a center for financial services that provides easy access to affordable funding services for business owners. It is home to 124 commercial banks, 365 fund managers and 531 license holders for capital markets. Among them is the well-known Swiss investment bank with its headquarters located here, and the United Kingdom based asset management firm which helps clients in managing their investment portfolios. It is due to the existence of these banking services that entrepreneurs find it easy to expand their businesses.
Regardless of who is investing in the country, the Economic Development Board (EDB) of Singapore offers incentives for multinational companies to establish their Asia Pacific headquarters in the country. A concessionary tax rate of 15% is enjoyed by the regional based companies from the income that arises from the business activities carried out in this state, while the international headquarters enjoy 0 to 10% attractive tax rates.

Also, those regional headquarters using the international intellectual property holding location in Singapore can get a Writing-down Allowance for the IP acquisition cost. An American market intelligence consultancy which specializes in IT has its headquarters in Singapore. This is due to the fact that Singapore plays a great role in intellectual property protection – according to World Economic Forums Global Competitiveness Report, Singapore is the fourth best place in the world and best in Asia in matter of intellectual property protection.

Additionally, the country offers a large network of free trade agreements. Investors in Singapore are able to gain great returns from over 20 Free Trade Agreements (FTA) with 27 economies and avoids double tax with 71 double tax agreements. An American firm that processes and distributes animal feed, grains and palm oil made Singapore its regional hub in the Asia Pacific because it is the perfect place to grow its business. Since then, it has been operating poultry-processing plants in Thailand, and processing imported soybeans into animal feed for the China market without limitations on industrial and financial trades.

Moreover, companies or headquarters based in Singapore receive a foreign income exemption. They are able to bring in dividends from the subsidiaries located in other countries directly without taxation. Exemptions apply to those companies who do not meet the required qualifications. This is possible because Singapore uses a tax system that is territorial based. In actual fact, tax is only levied on foreign-sourced income if it is repatriated back to Singapore.

The republic’s strategic location and extensive air connectivity is another benefit for establishing a business in Singapore. It is located in Southeast Asia, and is surrounded by emerging markets. The republic facilitates trade with its effective and efficient logistics infrastructure. The Singapore’s international airport – Changi, serves over 100 airlines flying to about 80 countries in 320 cities. This facilitates business activities with other countries and makes it more efficient with its daily flights; both in and out of the country.

In conclusion, doing business in Singapore is easy, and reaps great benefits. This is evident from the large number of firms who have made it their regional home.

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Hire A Qualified Accountant For Your Bookkeeping Needs

Hire A Qualified Accountant For Your Bookkeeping Needs

In 2013, the Singapore Government implemented two important initiatives that would see to it that Singapore is not only positioned as a global accountancy hub, but the corporate governance in its business landscape is also improved by a great margin. The first of these initiatives was the Singapore Qualification Programme which ensured that the standards for the qualifying exams for the accountancy profession were raised to a level that attracts only the best minds to join the field. Secondly, it established the Singapore Accountancy Commission whose chief objective is to inject professionalism into the field. However, over time, it has been observed that these government efforts can only succeed if individual business owners employ these professionals to oversee their accountancy processes with the high standards of accountability and accuracy that the field demands. But what are the benefits?

Optimal Financial Analysis and Management

In most cases, what normally leads to the collapse of a company is poor management when it comes to its finances. Cash flow is a very critical aspect of a business and when it is not properly managed, cases like customers being late on payments become a common occurrence and it could even lead to the business itself hurting its vital relationships with its committed suppliers. Without proper financial accountability, business owners are also tempted to make irregular withdrawals from the company’s accounts thus denying it adequate operational funds. However, this shouldn’t be the case when a business has a qualified accountant within its ranks. With proper analysis they can be able to detect loopholes in the company’s financial records and implement measures to counter them appropriately.

Tax Obligations and Assessments

A highly trained accountant is very crucial for the tracking of all the financial information of a company and documentation of this information in an easy to retrieve format. In the end, it is this information that they will use to prepare the company’s annual taxes at the right time and with great accuracy, something that will go a long way in preventing a business from running into problems with the Inland Revenue Authority of Singapore. This proper preparation of accounting records will also be important for the business to benefit from sound tax advice after a thorough assessment is done.

Presentation of Proper Reports to Investors

Investors in Singapore today are very keen on the financial records of the businesses that they invest their money in. Therefore, it has also become crucial for the business owners to hire the best accountants to work for them. Doing so is usually a positive signal to the investors that the business is keen on maintaining proper books that will provide them with vital information on the health of the business should they need it. And by extension show them that the business owners have a strong corporate governance system to ensure the continuity and sustainability of the business, a factor that will eventually convince them to invest more funds in the business to support its growth strategies.

Helps The Business Planning Process

Every good business needs to do a review of its performance on a monthly or quarterly basis and a good record of accounts as prepared by a knowledgeable accountant are usually important to this key business planning process. The properly managed records can help the business to access timely and accurate business advice from consultants after an analysis ensuring that the viability of its future projects is properly guided. Should they also intend to enter into partnerships as part of their growth strategies, these records will help them to prepare both detailed and winning proposals.

Deployment Of Technical Financial Systems

As technology takes center stage in most processes, the business world is quickly evolving in the way it records and digests this information for different operations. The high standards set for the accountancy training programmes in Singapore have seen to it that the accountants released into the field are well versed with the current trends that are unique to accounting practices. Therefore, by hiring these professionals or by outsourcing, you will not only benefit by having someone who is well versed with the latest technical aspects of accounting but also one who is familiar with the right technology to use to make accounting systems efficient. In the end, this will benefit your business by having accurate accounting reports that are also easy to digest and analyze.

Clearly, the benefits of having a qualified accountant who has been tested by the accountancy qualification programme and guided by the high standards set by the Singapore Accountancy Commission are many to a business that is keen on efficiency in its operations. In the end, it will not only lead to the business improving its corporate governance practices, accountability or accuracy in financial reporting but also impacts the Singapore economy positively as it experiences inevitable growth.

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Why Should You Consider Incorporating A Company In Singapore?

Why Should You Consider Incorporating A Company In Singapore?

There are plenty of positive reasons why you should consider incorporating a company in Singapore. A flexible tax system, a unique infrastructure, and minimal bureaucracy, all make this beautiful and prestigious nation a pleasant place to establish a business. Sir Raffles Stamford’s founding of Singapore coupled with the subsequent transfer of power to the East India Company in the nineteenth century made Singapore the center of entrepot trade. The deep, natural harbor and strategic location allowed business to thrive between the west and the east. Currently, in this era of technological advancements that have turned the entire globe into a smaller place, Singapore’s importance to the business world is only projected to remain stable.

While the country is still a vital point of transhipment in global sea lanes, aided vastly by its high-end container terminals and the emerging Tuas Megaport, Singapore currently boasts of lots of achievements which make it the preferred location among global entrepreneurs. Singapore’s highly-advanced transport network makes it easy and ideal for freight movement. This is a huge advantage to the importers of goods, and also has spin-off effects among the other downstream players, leading to benefits for various companies in processing, distribution, reprocessing, retail, resale as well as service providers that serve these companies. It is crucial to note that an efficient transport network creates an ample value chain which enables businesses to expand as a whole.

The government of Singapore’s emphasis on quality education is well-known around the globe. Having realized earlier enough that the nation lacked adequate natural resources, the country’s leaders made a wise decision to make education a priority, while expanding the manufacturing industry sector. Currently, the industries that produce goods of little value have paved the way for high-tech industries, while a knowledge-based economy has replaced trades that are labor-intensive. Moreover, the highly-skilled workforce continues to add immense value to the Singapore’s economy. Highly-educated professionals have transformed Singapore into a center of world-class pharmaceutical and biotechnological research. This is evident in the many Research and Development facilities that are available in the country. High-quality institutions across various domains have been built, a testament to the relevance that the government has placed on the high-value industries. Most professionals have contributed their experience and expertise towards transforming Singapore into a global center for finance, not far behind New York and London. Singapore’s position in the world financial market is upheld by the robust monetary and the government’s fiscal policies.

It is not by chance that most global companies opt to make Singapore their Pacific/Asia headquarters. Even though the country has a relatively small population, its proximity to the ASEAN coupled with its pro-business environment makes it an enticing base from which to springboard into the area. Setting up a company in Singapore is easy and straightforward, and often does not take more than a few days. Additionally, smaller firms can take advantage of the numerous grants provided by the government, and give themselves a perfect start. The tax incentives plus the low corporate tax rates make the deal even more appealing, and this makes Singapore welcoming to foreign investors. It is crucial to note that the Economic Development Board has been helpful in particular, aiding foreign firms to settle and grow in Singapore.

The large developing economies of Indochina and the other nations in the region offer a wealth of potential for businesses which are seeking for low-cost material and labor, as well as the untapped market for their services and products. The geographic location of Singapore at the crossroads of Asia makes it the ultimate base from which companies can direct their regional operations. The stable Singapore dollar, the excellent connectivity with regional capitals together with Singapore’s healthy relations with the neighboring nations, function holistically to enhance the confidence of companies in conducting business in the country. A banking system which is transparent is a great attraction for business owners, who feel secure and assured that their money is safe.

Typically, a political system that is stable often results in a stable economy, which consequently attracts companies. The last thing which businesses want to see is an ever changing government policies which might potentially affect both foreign and direct investment, which may fend off foreign companies, as well as local firms which can find it hard to work and grow with the foreign companies. A stable government additionally offers its citizens and businesses located within its jurisdiction with physical security. In fact, this is very critical now than ever, bearing in mind that there is serious security related problems in other parts of the globe. A safe place to conduct business is undoubtedly a boon for firms aiming to bring their investment overseas.

In the last few years, Singapore has made tremendous efforts so as to become the best and attractive place to conduct business in. A healthy business environment results in an efficient and a conducive ecosystem which adds incredible value to businesses, enabling them to develop, establish and prosper in the end.

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Accounting and Tax Filing Outsourcing: is it Worth the Effort?

Accounting and Tax Filing Outsourcing: is it Worth the Effort?

As a savvy business owner, you will easily agree that the role played by professional accounting for your businesses bottom-line as well as for legal compliance cannot be overemphasized. Forget the glitz and razzmatazz of slick marketing launches, power dinners and choreographed press briefings. The real story of a company’s performance is told by those neat rows and columns of numbers.

As the adage goes, numbers don’t lie and with just a glance at your business accounts it should be possible to ascertain the financial health of your company. The accounting market has undergone something of a revolution in the past couple of decades and today there is a motley collection of companies touting accounting solutions such as everyday bookkeeping and filing of tax returns. But taking into account the crucial role played by accounting for your business to operate profitably, you should take time before leaving the task to an outsourcing third party.

Vendors of outsourcing services invariably tout their services based on the premise that by outsourcing your accounting operations with them you will be freeing up crucial time and resources to focus on the core functions of your business. But, as is usually the case with such issues, there is more than meets the eye at first glance.

Admittedly outsourcing accounting services will free up resources geared towards back-end operations and may spur more sales and production. The big question however is whether the benefits which accrue from the switch outweigh the cost of paying the outsourcing services provider. In certain cases, businesses have realized too late that the cost and effort involved in implementing the outsourcing service are too huge to be justify any profitability resulting from the new arrangement. This is invariably the case when the business is new in the field and their sales volume has not risen high enough to justify incurring outsourcing expenditure.

As a business owner you should also keep in mind that outsourcing accounting services does not equate to completely hands-off involvement in financial record keeping. You and your employees will still have to be involved in recording and collating revenue and expenses figures from different departments of your company and availing them to the outsourcing services provider. You should consider whether the effort and time spent in doing this sort of preliminary record keeping, added to the cost of the overall service has a positive impact on your company’s bottom-line.

Your decision to enter into the arrangement should only come after you have ascertained that either the required records are readily available or involve negligible inconvenience/costs and that the fee charged by the vendor is reasonable.

One of the most obvious benefits of engaging proficient outsourcing accountancy services provider is that they will be able to produce, in timely fashion, detailed figures of account to offer insightful views of a company’s performance for use by the company’s management. Such information is crucial for those charged with executive powers to ascertain the profitability of the business as a whole and to decide on what direction to take in the future.

As a Singapore business owner, you need to consider the skill level of the staff working in your company before deciding on the best solution for your accounting needs. There is always great demand for proficient accountants in Singapore. To attract the best accounting talent joining the market, Singaporean firms compete fiercely with each other to attract the best brains to their paid ranks.

In a bid to raise the standards and guarantee professionalism, the Singapore government revamped regulations governing the sector in 2013. One of the most significant developments in this regard was the establishment of the Singapore Accountancy Commission (SAC), a body charged with the responsibility of establishing and enforcing standards in the profession. Moreover, all new accountants have to undergo the highly respected Singapore Qualification Programme (Singapore QP).

As an up and coming Singaporean company, you may not have the wherewithal to recruit and remunerate such top shelf talent. But through the medium of an outsourcing accounting services provider, you can ensure that your books are meticulously kept in order. This assumes additional importance when it comes to filing tax returns at the end of the year. Outsourcing your accounting services guarantees you will never miss the strict deadlines.

The importance of professionally done accounts goes far beyond compliance with tax laws however. It could be the essential difference between your company landing a lucrative contract or perhaps even attracting moneyed investors and going burst. This is because the Accounting and Corporate Regulatory Authority (ACRA), Singapore’s governing body for business accounting charged with the sole oversight role in accounting and governance matters, has put in place a rating system used to rank companies for compliance with its standards.

ACRA’s rating system follows a simple colour-coded scheme. The code denoting the company’s negative or positive rating is displayed right against the company’s name in ACRA’s Bizfile database and this information can be accessed on the public search portal. For a publicly listed company to earn a positive rating, it needs to hold its AGM every year and within 15 months of the previous meeting. A newly incorporated company is required to have held its first AGM within 18 months of incorporation for it to earn a positive rating. Just as well, ACRA requires that the accounts tabled at the AGMs must not be older than six months for a private company and not older than four months for a private company if the rating awarded is to be positive. A positive rating is also dependent on the company filing its annual returns within 30 days of the AGM.

From the foregoing it is easily apparent that having a reputable accounting firm handle your business accounts is essential for achieving and maintaining a positive public profile in Singapore. In turn, this bodes well for a company seeking to appeal to potential business partners, investors and even buyers as impeachable corporate governance and financial self-discipline are essential considerations in all these scenarios.

As we have established, the benefits you stand to enjoy after engaging a proficient accounting firm to handle your business accounts on outsourcing terms are legion. That said though, you need to carry out a comprehensive analysis of the potential benefits and costs of that change before reaching any agreement with the outsourcing vendor. If the associated costs can be justified, it may be the most significant corporate decision you will make for your business. It is certain to help your brand shore up its credibility in the marketplace and spur on exponential growth.

For more information on our accounting services, contact us now!

Payroll Outsourcing Helps Companies Increase Their Efficiency

Payroll Outsourcing Helps Companies Increase Their Efficiency

Payroll is an overlooked but essential function of all companies in Singapore. Away from the glamour of high-value transactions and the walls of fame honouring high-achieving sales representatives, appropriate and timely compensation to deserving employees keeps them motivated and morale high. This, in turn, enforces their loyalty to their employers and makes them work harder, adding to their personal growth and bringing the companies to greater heights.

Despite its important role, payroll service, and by extension, the human resource department, are a cost centre in any company. Payroll is more than simply preparing pay slips for the employees, encompassing functions like preparing reimbursements, calculating increments for promotions, processing statutory deductions, calculating employee benefits, determining final payments for terminations and resignations, and so on. Working on each of these functions incurs costs in terms of time and resources, and Human Resource heads will have to justify such costs to the Management.

Many companies favour the outsourcing of payroll functions to third-party providers, most of which are accounting and corporate secretarial firms. Run by qualified accountants and human resource professionals, such outsourced payroll services help companies save valuable time and money. By relinquishing themselves of these back-end services, companies free up their precious resources and manpower and are able to redeploy these limited resources on profit-generating sales and business development activities.

In addition to time savings and the resulting efficiency, companies can also look forward to better-quality work as the work is now handled by specialists. Such service providers, being specialists trained in the areas of payroll and related services, will be able to spot potential errors and omissions and highlight areas of improvements to the commissioning clients. Being highly-trained professionals offering outsourced payroll as a business, these companies have the responsibility to keep themselves abreast of the latest regulations governing the treatment of pay matters and issuance of pay slips.

The Ministry of Manpower mandates that all employers must issue itemised pay slips to all their employees covered by the Employment Act. These pay slips can be in hard or soft copy and must be issued at least once a month, within three days of payment to the employees. Such pay slips must also be kept for the latest two years of employment, in case of any disputes the employees have with their employers. MOM also dictates the list of items that have to be included in the pay slips. All the items below have to be clearly displayed, unless the items are not applicable to the employees.

The pay slips must cover the names of the employer and the employee, the date of pays lip issuance, the basic salary for each salary period and the start and end dates of the salary period. Allowances given to the employees, such as fixed allowance and ad-hoc allowance, have to be included. Bonuses, pay given for working on public holidays and other additional pay given for each salary period, must also be included. Apart from such salary information, deductions such as mandatory CPF contributions and ad-hoc deductions have to be displayed. Employees who are not professionals, managers and executives and are entitled to overtime pay, will also see overtime hours worked, overtime pay and the start and end dates of overtime payment periods worked, displayed on their pay slips. Finally, the net salary paid for the month for the employee will be stated.

A professional outsource payroll service provider will not only ensure that the itemised pay slips fully comply with the Ministry of Manpower’s requirements but also help their clients with special calculations arising from such transitions as the onboarding and resignation of employees, as well as promotions and year-end bonuses. They free their clients of such payment worries and allow them to fully focus on their businesses.

To learn more about outsourcing your payroll functions, contact us now!