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Singapore has consistently been ranked by numerous international economic and financial organisations as the best country, or among the top countries to do business.

These rankings take into consideration factors such as business friendliness, efficiency and openness of the economy, bureaucracy, corruption, IP protection, infrastructure and investment potential. 

Globally, Singapore is known as a sea and air transportation and cargo hub. It has a vibrant business climate that attracts investors and start-ups across myriad sectors.  

Within Asia, this thriving cosmopolitan city-state is a leading financial hub. It boasts a fast-growing economy, socio-political stability and well-developed infrastructure. Singapore has also been lauded for being a safe place with world-class transportation, healthcare and education systems.

Here are some of the reasons why you should incorporate your company in Singapore.

Robust economy

Singapore is a free market economy with a healthy financial position. Its economy grew by 14.7% year-on-year in Q2 2021, according to the latest statistics released by the Ministry of Trade and Industry (MTI). It achieved a per capita GDP of $82,503 in 2020¹ and has managed to maintain a low overall unemployment rate of 2.7% as of Q2 2021², as well as a low inflation rate.

These conditions contribute to a robust economy that provides a conducive environment for doing business.

Favourable tax system

To enhance Singapore’s attractiveness as a business hub and to boost Singapore’s services export, tax exemption may be granted to certain foreign-sourced income if qualifying conditions are met³.

Start-ups and new companies enjoy substantial tax exemptions. For the first three Years of Assessment (YAs), start-ups are given 75% exemption on the first S$100,000 of normal chargeable income. A further 50% exemption is given on the next S$100,000 of normal chargeable income⁴.  

The corporate tax rate is capped at 17%, one of the world’s lowest.

The sale of a business will not incur any capital gains tax. Neither will the distribution of dividends to shareholders.

Singapore has established Avoidance of Double Taxation Agreements (DTAs), limited treaties and Exchange of Information (EOI) Agreements⁵ with over 100 countries. Business owners are relieved of double taxation of income that is earned in a jurisdiction in which they are not a resident.

Effective since YA 2009, a Unilateral Tax Credit (UTC)⁶ will be granted on all foreign-sourced income received in Singapore by Singapore tax residents from jurisdictions that do not have DTAs with Singapore.

Companies may claim Foreign Tax Credit (FTC)⁷ for tax paid in a foreign jurisdiction against the Singapore tax payable on the same income. With all these schemes in place, double taxation is highly unlikely.

Complete foreign ownership

Singapore allows foreigners 100% share ownership of a company incorporated in Singapore without the need for any local partners or shareholders. This puts you in full control of your company.

No restrictions on the movement of foreign currency

Singapore does not impose restrictions on the amount of capital investment that foreign investors can bring into Singapore from their home countries. There are also no restrictions on the repatriation of profits.

The ease of moving funds in and out of Singapore is one of the factors that makes Singapore an attractive and easy place for foreign investors to set up businesses.

Less red tape

You can incorporate a company in Singapore within hours, thanks to an efficient and bureaucracy-free system. The regulatory framework is robust and transparent, but the requirements and procedures are straightforward. Annual compliance obligations are also not unduly complicated.

With MyCo, the process is even more hassle-free and can be done without leaving your desk.

Incentives and support for start-ups

The Singapore government offers start-ups, both local and foreign-owned, a slew of tax incentives, subsidies, grants, loans and other schemes⁸ to help them along during their infancy.

These include infrastructural support for start-ups, support for talent sourcing, start-up capital support for first-time entrepreneurs and co-investment opportunities.

Many of these are administered through government-led organisations. One example is SEEDS Capital⁹, an investment arm of Enterprise Singapore, which supports the growth of promising Singapore-based start-ups.

Some of these are in the form of loans, such as the Enterprise Financing Scheme (EFS)¹⁰ that makes financing more accessible to start-ups throughout various stages of growth.

Local and global pool of talent

With limited natural resources, Singapore has always placed a great emphasis on its human resources through education, training, upskilling, retraining and lifelong learning. These ensure that the local workforce is well-equipped to contribute meaningfully to their respective industries. Apart from possessing a high proficiency in English, Singaporeans are also known for being highly-motivated, efficient and productive.

Singapore also attracts a large number of foreign talents who choose to work in Singapore. This is a boost to the calibre and diversity of its human resources.  

Connectivity to the region and beyond

Located at the southern tip of the Malay Peninsula, Singapore is home to the world’s busiest transhipment sea port, as well as one of Asia’s largest cargo airports.

With 200 shipping lines offering connections to 600 ports in some 123 countries, Singapore is ranked by the World Bank as Asia’s top logistics hub since 2007¹¹. Its port handles one-seventh of the world’s container transhipment- the most for any hub in the world. Its airport handles 85 million passengers and three million tonnes of cargo annually.

Singapore also boasts Asia’s most extensive network of Free Trade Areas (FTA)¹¹ that covers 60% of the world’s GDP.

These factors make Singapore the ideal place to base a business with a global reach.

World-class infrastructure

Singapore’s developed network of road and public transport systems, built, digital and R&D infrastructures improve connectivity and productivity and provide a conducive business environment.  

Political stability and reputable governance

Singapore is known for its reputable government that upholds the rule of law with impartiality. Corrupt practices are not tolerated and all business transactions are carried out following a set of clear and above-board regulatory guidelines.

Such an environment makes doing business a more transparent process. It also sends the right signals to your business partners and associates.

Incorporate your company with MyCo today. We have your business needs covered.

^{1 SingStat.Gov.sg – https://www.singstat.gov.sg/modules/infographics/economyf $82,503 in 2020
2 Stats.mom.gov.sg – https://stats.mom.gov.sg/Pages/Unemployment-Summary-Table.aspx
3 IRAS.gov.sg – https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Companies-Receiving-Foreign-Income/Tax-Exemption-of-Foreign-Sourced-Income/
4 IRAS.gov.sg -https://www.iras.gov.sg/irashome/Businesses/Companies/Learning-the-basics-of-Corporate-Income-Tax/Common-Tax-Reliefs-That-Help-Reduce-The-Tax-Bills/
5 IRAS.gov.sg – https://www.iras.gov.sg/irashome/Quick-Links/International-Tax/List-of-DTAs–limited-treaties-and-EOI-arrangements/
6 IRAS.gov.sg -https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Claiming-Reliefs/Foreign-Tax-Credit/
7 IRAS.gov.sg -https://www.iras.gov.sg/irashome/Businesses/Companies/Working-out-Corporate-Income-Taxes/Claiming-Reliefs/Foreign-Tax-Credit/
8 Startups.gov.sg – https://www.startupsg.gov.sg/programmes/
9 Enterprisesg.gov.sg – https://www.enterprisesg.gov.sg/financial-assistance/investments/investments/seeds-capital/overview
10 Enterprisesg.gov.sg – https://www.enterprisesg.gov.sg/financial-assistance/loans-and-insurance/loans-and-insurance/enterprise-financing-scheme/overview
11 EDB.gov.sg – https://www.edb.gov.sg/en/our-industries/logistics-and-supply-chain-management.html}

Whether your company uses traditional or online accounting services, accounting is a crucial aspect that pencils the results and success of the company. These numbers, while not always exciting, helps to steer your company in the right direction with data and analytics.

With the rise of online accounting firms in the market, let’s deep-dive on the differences of online accounting services for small business and traditional accounting methods.

Traditional Accounting Methods

Time is money – when it comes to traditional account methods, many man hours are wasted on keying data into accounting software via a computer. Employees have to get documents authorised and vetted manually, often relying on physical copies before transferring these data into a centralised software system. This process is time-consuming and requires high effort, while also increasing the potential of human errors, leading to discrepancies in numbers.

As accounting software with full features are often very expensive, coupled with its annual maintenance cost and the cost of hiring in-house accountants, makes these old school methods a costly accounting solution. In addition, there is a possibility of data breaches if the device security is weak. Beyond security, data loss is very much another possibility with laptop or machine downtime and server malfunctions. This will affect business productivity, while being a cost-inefficient way to do the numbers.

Accountants engaged to audit your company’s records means there is a need for onsite auditing in your office. As auditing is a long and tedious process, time and effort will be needed to share transaction details and adhering to requests for physical paper documents. These are additional costs to the company.

Online Accounting Services

On the flip side, cloud accounting takes care of all your IT needs easily as data is stored and secured in well-managed data centres and maintained by professionals. One of the key concerns of online accounting services could be a lack of features to perform your company’s diverse accounting tasks. Not to worry, online accounting firms have software that are feature-rich, from invoicing, direct payments, to budgeting. These are tools that every major MNC frequently adopt and now made available to your business.

The online accounting platform also provides greater internal control where you can set access rights to selected employees. As all information and data are stored in the cloud, you can access these data from anywhere at any time, even on your mobile devices, as long as you have an active Internet connection. Your access to real-time data can help to accelerate strategic business decisions, ultimately streamlining processes.

The accounting service is now seamless, as your accountant can now perform their duties without the need to travel or schedule site visits. You can address their questions and queries at any time, allocating your valuable time for higher priority tasks. As all accounting services are done online, you can go paperless and do your part in tackling paper wastage.

The best part of online accounting services for small businesses is its scalability factor – you can pick and choose from a diverse list of industry-leading features for a customised solution that meets your business needs. 

New Technologies for a Digitalised World

As we move towards digitalisation, it has become more apparent that online account services like Myco are the way forward for small businesses. Not only there will be cost efficiency, but the time also saved from traditional accounting methods can be optimised for better resource allocation to drive business productivity.

Make the switch from traditional accounting methods to online accounting services for small businesses today! Find out more about our online accounting services here.

We understand that incorporating a company in Singapore can be confusing and difficult. Too many paperwork, incomplete documents, complicated pricing structure and hidden costs are common struggles when it comes to incorporation of a company.

To simplify things, we’ve come up with the 3-click approach – the easiest way for online company incorporation! Here’s how to incorporate online with Myco.

The 1^st Click

Enter your chosen company name here. If one is available, simply clickon the type of registration you are proceeding with, whether as a local or a foreigner.

The “Half-way-there” Click

You’re almost there. Verify and authenticate your identity with SingPass, where the platform will retrieve all relevant documents securely – all without the need for manually entering them! Once you have logged into SingPass, click “AGREE”.

The “I-got-my-company-incorporation-online” Click

The last click for your online company formation! Save yourself the trouble of logging into your internet banking and pay securely with Stripe, one of the most reliable and secure payment gateways in Singapore, once all your necessary data is gathered. At the payment page, simply click “Proceed” and you’re all set! Documents will be generated within the hour and automatically sent to relevant for their e-signatures. 

Once all stakeholders have signed, your incorporated company will be setup and go live within the day. Now that’s what we call online company incorporation made easy. Find out more about our incorporation service here.

Online accounting firms are gaining popularity, accelerated by the pandemic and the increasing adoption of digital documents and e-signatures across key stakeholders. These online accounting services for small business is one of the many first steps in digital transformation and breaking away from the use of physical paper.

Here’s why small business accounting services, such as Myco, are so popular today.

1. Focusing on what matters to you – your business

Take advantage of online accounting services to save your valuable time dealing with accounts and administrative work. With a ready-made solution that takes care of your mundane tasks, you can put your mind in developing and growing your business.

2. Be anywhere at anytime

Gone are the days where you need to visit multiple offices and scheduling dates to get your accounting work done. As long as you’ve got a network connection, you can perform your business transactions anytime, anywhere. From tax queries, checking payment periods to calling for general meetings, convenience’s at your fingertips with the support of online accounting firms.

3. Real-time data at the palm of your hands

Stay up to date with all your company and accounting matters, supported by a cloud that captures, stores and secures all your business data. Your accounts are automatically synced and updated periodically, giving you real-time insights on your company’s performance and sales figures. Never miss a payment with easy access to all accounts receivables and accounts payables. 

4. Save money with no compromise on security

Partnering with industry heavyweights such as Oracle, Docusign, and Xero, online accounting firms like Myco, leverages on state-of-the-art technologies and security systems. Being a cloud-based platform, you can achieve cost efficiency with minimal investment on servers and security systems. Your business needs and interests are well taken care of by reliable and trusted global partners.

5. Go green

Sustainability’s one of the trending topics for businesses today. Make a difference in our world by opting for greener methods of accounting. Reduce the use of paper and your business’ carbon footprint from traveling and transporting additional logistics with alternative methods of e-signatures and online account services for small businesses.

Learn more about our online accounting service for your business here.

A private limited company is a business that is a legal entity that is separate and distinct from its directors and shareholders. Companies can be private which limits the number of members to 50 or public where it can have more than 50 members.

A private limited company is one that is locally incorporated where it has a minimum of 1 shareholder in the company and a maximum of 50. It can sue and be sued in its own name, and the directors and shareholders are not personally liable for debts or losses of the company. Its members also have limited liability to the company, meaning that there are no obligations to the company except for shares being paid up.

Advantages of setting up your business as a private limited company

1. Having a distinct legal identity

Being a private limited company, the business is given a separate legal identity from its owners and shareholders. This means that the company is able to purchase assets in the country, enter contracts, go into debt, sue or be sued in their own name. Since it has its own identity, the company can remain a perpetual business until the shareholders decide to dissolve it. Moreover, the distinctiveness of a private limited company prohibits the use of similar identities by other businesses.

Adding on, a company’s distinct legal identity implies that owners’ and shareholders’ liability in the company are limited based on their share capital. Since owners’ and shareholders’ personal assets are separate and protected from the business entity, they are given some form of security when doing business in the company. This can translate into having the ability to take more calculated risks that may not have been taken if the ownership was fully on any of the owners/shareholders. Also, the limited liability in the company serves as an attractive characteristic to encourage potential investors to be part of the company without being held personally liable.

2. Raising additional capital

As the company grows and expands, it will require additional capital to support its business operations. As a private limited company, it would find it easier to raise additional capital to support its expansion by simply issuing new shares to current shareholders or attracting new investors. This is much more feasible for a private limited to do as compared to a sole proprietor or partnership business which has to rely on their owner’s personal assets and funds.

3. Tax exemption benefits

A private limited company is able to take advantage of the tax exemption benefits given to companies. Newly established private limited companies incorporated in Singapore are eligible for full tax exemption in their first three years of assessment, and yearly partial tax exemption from then on. This makes after tax profits more competitive as compared to business run as sole proprietors or partnerships, which charges personal income tax on the business income which could range from 2 to 22%.

Moreover, income from companies are taxed only once at the corporate level and will not be taxed when the profits are transferred to shareholders. Hence the dividends received by shareholders of a private limited company will not be tax chargeable again, resulting in a sense tax free income to be received by shareholders.

4. Ease of transfer of ownership

In the case of the need for a transfer of ownership of the company from one shareholder to another due to various reasons such as a shareholder exiting the business or any dispute, ownership transfer can be easily done without comprising operations. The ownership of a private limited company may be transferred either wholly or partially by selling off shares or through issuing new shares to new investors. The process is not as complicated as it seems and can be done without disrupting current business operations. This ease of transferability of shares are beneficial to investors and hence can be a point that makes a company attractive to new investors.

Disadvantages to starting a private limited company

There are undoubtedly certain drawbacks of setting up a private limited company as well, mostly due to the governing and regulation of the company itself since it is made up of numerous members. A private limited company has to follow rules and regulations by the Singapore Companies Act, and any violation or misconduct in these area can lead to severe penalties on the company. There is also a larger amount of administrative work that a company has to deal with as compared to sole proprietors or partnership businesses. These administrative duties are extensive and include the submission of Annual Reports and Directors’ Reports. Operating costs of private limited companies are generally higher with these administrative requirements, hence overall is more expensive to set up.

Goods and Services Tax (GST) is a broad-based consumption tax levied on the import of goods, as well as almost all the supplies of goods and service in Singapore. Companies can be registered for GST either under compulsory registration or voluntary registration. The liability for compulsory registration of GST depends on the value of one’s taxable turnover, which refers to the value of goods and services supplied that are regarded as taxable under GST purposes.

By Law, IRAS states that if your taxable turnover is more than $1 million in the past year or forecasted to be in the next 12 months, then it is compulsory to register for GST. Businesses below this threshold are not liable to register for GST but may choose to on their own accord.

When one is considering voluntarily registering for GST, it has to consider certain factors. Firstly, if you are able to qualify for registration. Secondly, if you are able to meet the requirements for voluntary registration. Lastly, whether the benefits to you will even outweigh the costs of registering for GST.

Factors to Consider

Assuming that the entity is able to meet the required qualification and conditions for voluntary registration, it is crucial to weight the benefits and costs of voluntary registration. Mentioned below are some of the factors to consider.

1. Responsibility of Being GST Registered

When GST registered, you have an extended list of responsibilities that has to be fulfilled from the government. These responsibilities may increase the administrative costs and hence have to be taken into account.

2. Supplier Profile

When GST registered, you will be able to claim the GST paid from your GST registered suppliers. Moreover, the GST from imported goods can also be claimed. This may increase your gross profits even after returning GST to IRAS.

3. Customer Profile

Being GST registered, you are able to charge customers GST. If these customers are GST registered as well, the selling price can be higher to include the GST chargeable as the customers will also be able to claim the GST. This higher selling price could make you more profitable.

4. The Type of Sales

Being GST registered, you are able to claim GST incurred on your purchases. When these purchases of goods and services that are zero-rated supplies are exported to overseas customers, the GST you charge will be at 0%. This could give you a higher gross profit on your zero-rated supplies as you claim the GST on your purchases but maintain your selling price.

Benefits of Registering for GST

There is an ability to claim back input tax, which is the GST paid on a business’ purchases. If your business is one that makes large amounts of purchases, you pay a large amount of tax to your vendors in the form of GST. As a GST registered business, this input tax can be claimed back from IRAS, enabling you to collect more money which may offset some of your costs. Moreover, as a business starting up, there will be many big-ticket capital purchases that will inevitably be made. Being GST registered, this can help as the amount of GST paid from such large purchases would be substantial.

From the other point of view, if the business was not GST registered, it can be said that it technically pays 7% more on its purchased goods since it is unable to claim back this amount form IRAS.

However, it is also important to know if your business can financially handle being GST registered. With registration comes a larger amount of administrative and record keeping work that the business has to perform, which will add up to a decent about of costs as well. Hence the business has to identify if it is worth registering for GST if the claiming of tax on your purchases can cover the increase of such additional costs.

Withholding tax in Singapore is used to collect taxes from non-resident companies and individuals who earn income sourced in Singapore. It refers to the tax withheld and paid to IRAS when a Singapore Payer makes a specified payment to a non-resident Payee for services or work done in Singapore. Singapore withholding tax is necessary for non-resident individuals or companies that have an income derived from a Singapore source or have services and work done in Singapore.

The payments that require one to withhold tax are:

1. Payments for services, interest, royalty, rights of use etc.
2. Payments to non-resident directors, professionals, public entertainers and international market agents
3. Foreigners/PR withdrawing from Supplementary Retirement Scheme (SRS) Account
4. Distribution of Real Estate Investment Trust (REITs)

A company is either a tax resident or a non-resident of Singapore. In the Singapore context, the tax residency status of a company depends on the place in which the business is controlled and managed. This control and management refers to decision making on strategic matters, such as business policies and strategies. Hence, companies where control and management is not exercised in Singapore is considered a non-resident. The place of incorporation of a company is not necessarily indicative if a company is a tax resident of non-resident.

Individuals also can be a tax resident or non-resident. Non-resident individuals include foreign professionals, non-resident public entertainers and foreign board directors.

How is withholding tax imposed?

It is important for businesses to understand withholding tax because as a Singapore payer, it is the responsibility of the business to withhold the correct amount to pay to IRAS since withholding tax is deducted directly from the payer. The tax amount that has to be withheld is a percentage of the gross payment collected from the non-resident. The percentage amount differs based on the type of payment.

Payment of Withholding Tax to IRAS

Withholding tax payments are required to be submitted by the 15^th of the second month from the date of payment to the non-resident. For example, if a payment was made on 1^st April, the withholding tax payment has to be filed by 1^st June. If payment is made by GIRO, it would be due on the 25^th of the month the tax is due. It is important to ensure that payments are made on time as penalties will be imposed if the withholding tax is not paid to IRAS before the due date.

Transfer pricing is the price that related parties transact goods, service and intangibles between them. Related parties could be of two sorts: Either one of them directly or indirect controls the other such as in the case of branches or head offices, or both are under a common control party such as in the case of 2 subsidiary entities having a common parent company.

A brief illustration of the use of transfer pricing would be in the scenario involving two related parties, Entity A and Entity B. Entity A manufactures Good A which is used by Entity B in the production of a finished product B. The price that Entity A sells Good A to Entity B is known as the aforementioned transfer price, which to Entity B is also its cost of goods that it can either choose to purchase from Entity A at transfer price or from the open market at the market price.

Transfer price is used for accounting purposes when these related parties of the same business are evaluated separately for profit and loss. The transfer price is usually set to a price that is close to the prevailing market rate, as too large a difference would lead to one of the parties being at a disadvantage and hence better off buying from the market itself. However in Singapore, the price set also has to follow certain guidelines set by the Inland Revenue Authority of Singapore (IRAS) which ensures that the prices set by related parties are fair. IRAS controls these related parties transactions in Singapore as well as those transactions operating outside of Singapore.

IRAS endorses the Arm’s Length Principle as the standard guide, which is an internationally accepted standard of transfer pricing. This is to ensure that profits are taxed where the actual economic activities generating these profits are performed.

Arm’s Length Principle

The Arm’s Length Principle is one that ensures proper transfer prices are established between related parties, such that transfer prices for goods and services are equivalent to prices that unrelated parties would charge in same circumstances. This involves the need to compare the transaction between related parties to similar situations undertaken by unrelated parties.

For example, with reference to the previous case, Entity A manufactures Good A which is used by Entity B in the production of a finished product B. According to the Arm’s Length rule, the price of Good A sold to Entity B should be the same as what the company would pay in the open market. If the same or similar Good A costs $100 in the market, then Entity A should also set their transfer price of Good A to $100. Thus, the manufacturer of Good A has to compare the value of Good A to determine its transfer price.

Transfer prices are closely monitored for accuracy within the company’s financial reporting so that profits of the company are made appropriately within the Arm’s Length rule and the taxes associated are paid correctly. If financial statements are found to be inaccurately documented or made to illegally reduce the reported profits in Singapore, IRAS will impose an increase in the taxable profits. This would lead to the company facing additional taxation, interest and penalties.

Three Step Approach to Apply the Arm’s Length Principle

To avoid breaching the Arm’s Length Principle and to correctly match transfer prices to that of the open market, IRAS recommends that taxpayers follow a three step “comparability analysis” to apply to transactions between related parties.

Step 1: Conduct Comparability Analysis

This beginning step ensures that transactions are compared and examined based on the following 4 aspects and that the company makes adjustments for the differences to come up with an appropriate transfer price.

• Terms of the transaction
• Characteristics of the goods, services or intangibles
• Functional analysis
• Commercial and economic circumstances

IRAS also requires that consideration of other relevant aspects should be taken into account for an accurate assessment, such as:

• The evaluation of transactions on a separate or aggregate basis
• Using data of multiple years
• Considering losses
• Selecting internal and external comparables (such as commercial databases, comparables with publicly available information, non-local comparables etc.)

Step 2: Identify the most appropriate transfer pricing method

1. Traditional transaction methods (Comparing prices):
   • Comparable uncontrolled price method (CUP)
   • Resale price method (RPM)
   • Cost plus method (CPM)
2. Transactional profits method (Comparing profits):
   • Transactional profit split method (TPSM) – Residual analysis or Contribution analysis
   • Transactional net margin method (TNMM)

Step 3: Determine the arm’s length results

Transfer Pricing Documentation

Taxpayers who have a gross revenue of their business activities exceeding $10 million or those who require transfer pricing documentation to be prepared for the previous basis period have to ensure that they have kept and prepared all necessary documents relating to their related parties’ transactions. The documents prepared have to contain information as required in the Income Tax Rules 2018, including a relevant Singapore operations overview of the businesses of the group that the taxpayer is a member of. It also has to include the taxpayer’s business transactions with its related parties. There are exemptions from the document requirements such as related party domestic transactions with the same tax rate and transactions with value not exceeding specified amounts. The full list of requirements and documentation exemptions can be referred to in the Income Tax (Transfer Pricing Documentation) Rules 2018.

These documents have to be prepared by the filing due date of the tax return, but need not be submitted unless requested by IRAS, for which then the business has 30 days to submit the transfer pricing documents. However, even as transfer pricing documents do not always need to be presented, it should be retained for a period of at least 5 years from the end of the basis period.

Being an owner of a company, there will come a time when there is a need to decide how to remunerate yourself so that you can reap the benefits of your profits. There are a few ways to do so, but each having its own pros and cons. You can either draw out your own salary, pay out dividends or do a combination of both. Even though it may seem that either method would give you directly what your company earns, that is not always the case as each method serves to have some sort of compensation or tax scheme that may influence your decision.

Drawing a salary

One way of remuneration of a director in a company is through drawing a salary and paying yourself. When drawing a salary, you are liable to paying personal income tax, which is dependent on your income bracket.

According to the Accounting and Corporate Regulatory Authority (ACRA), it is compulsory for every company to appoint a company secretary within 6 months from its incorporation date, who must be a person locally resident in Singapore. This position in the company cannot be vacant for more than 6 months at any time.

A company secretary is an appointed compliance officer of the company, one who is the primary in charge of administrative and reporting duties that the company is required to fulfil by law. Any ACRA-related compliance work or filing deadlines are managed by the company secretary. The company secretary also has to ensure that compulsory meetings by law are held timely and appropriately. The agenda and meeting minutes for the Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) are prepared and kept by the company secretary. Overall, the role of a company secretary is to ensure that every legal requirement set out by authorities such as ACRA are completely met on time. 

The importance of a suitable and trustworthy company secretary cannot be undermined because they are given control over the legal compliance of the business. This is extremely necessary as failure to appropriately and punctually do so can lead to costly consequences for the company.

Listed below are some of the specific responsibilities and duties of a company secretary.

1. Maintenance and upkeeping of Statutory Registers

The company secretary has to maintain and update the statutory registers. This includes the register of shareholders, charges and members. The distribution of the company’s Annual Reports and accounts are also maintained by the company secretary.

2. Preparation of notice and agenda of meetings

The organisation and preparation of meetings such as AGMs must be done by the company secretary. They are also responsible that the company members and shareholders are notified timely if they need to attend these meetings.

3. Updating and filing with ACRA

The company secretary has to file the necessary forms and returns within specific timelines. This includes the Annual Returns, share allotments or share transfers, updating of the appointment and resignation of directors etc.

4. Custody of company seal

The company secretary ensures the safekeeping and proper use of the company seal on documents when required.

5. Insurance of the company

Ensuring that there is sufficient insurance covering for the company, directors, staff and office.