Legal and compliance in 2021
Disclaimer: This page provides a general overview of the laws that govern all Singapore companies and businesses.
Singapore company laws
- The Singapore online public register records details of a Singapore company directors and shareholders, including names, addresses and passport numbers. Some Clients ask us to act as the the professional passive nominee shareholder or director;
- Every year following Singapore company formation, a company must lodge an annual return confirming relevant details for the public register, including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings;
- Singapore has an efficient, transparent legal system. All parties, regardless of nationality, are offered the right to due process under the law. Singapore is party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Arbitration in other countries that follow the convention is enforceable in Singapore;
- The Constitution bars all resident firms from discriminating against employees on the grounds of religion, race, descent and place of birth. All resident companies are barred from releasing private information about an individual without consent;
- The Competition Act mandates all resident firms to gain approval from the government regarding mergers and acquisitions;
- Deregistering a Singapore company takes a minimum of six months. Healy Consultants’ Singapore company deregistration fee is US$1,450. During this 6-month period it is mandatory to maintain a resident company secretary and legal registered office. Following legal company de-registration, our Client is i) no longer allowed to conduct business through that entity ii) no longer obliged to submit annual tax returns and iii) no longer obliged to prepare annual financial statements;
- The Memorandum of Association is a contract between shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method. The same is filed with ACRA following Singapore company formation;
- After Singapore business formation, the company must maintain a local registered address and appoint a local resident company secretary within six months of incorporation;
- In accordance to the Singapore Companies Act, international companies are allowed to re-domicile to Singapore, including tax haven companies. Contact us to assist with re-domiciliation.
- Within 1 week, Healy Consultants Group can transfer in your local company and manage your full company administration, compliance and accounting. Refer to this webpage for detailed information as to how to transfer your Singapore entity to Healy Consultants Group
Singapore employment regulations considerations
- In accordance with Singapore’s Employment Act of 1955, employment contracts must always state: i) the employee and employer’s full name ii) job title and employees’ main duties iii) start date of employment, and duration iv) working hours and rest day(s) v) basic salary and overtime rate of pay vi) numbers of public holidays, annual leave, sick leave, maternity leave and childcare leave vii) probation viii) CPF contributions (if any) and ix) notice period for contract termination;
- There is no minimum wage in Singapore. However, salaries for skilled employees tend to be high. The median gross salary income (including CPF contributions) reached S$4,056 in 2016, according to the Statistics Bureau of Singapore;
- In accordance with Singapore regulations, employers must also register all Singapore nationals and permanent resident employees with the Central Provident Fund (CPF) no later than one week from the start of their contracts ;
- For each citizen or permanent resident employee, the employer monthly CPF contribution is 17% of the employee’s gross salary. The employer must each month also deduct the employee’s gross salary contributions of 20% and remit the corresponding amount to the CPF. These rates vary slightly for new permanent residents and employees over 55 years old;
- The standard working day is i) 9 hours and ii) 44 hours per week. Overtime work must be compensated by an extra payment of at least 50% of the standard rate of pay. All starting employees are entitled to at least i) 14 days of paid sick leave ii) 11 days of paid national holidays and iii) 7 days of paid annual leave per year. See this page for further details on employee paid leave practices in Singapore. Most local employers offer 14 days of paid annual leave per year;
- When terminating a contract for reasons other than disciplinary, both employer and employee must provide a notice period (or equivalent payment) of at least one week for employees who have been with the company less than a year, two weeks for employees with less than five years’ tenure, and one month thereafter;
- Singapore salaries are taxed progressively at 0% to 20%. For non-residents, salary income is taxed at a flat 15%, while directorship fees are subject to a 22% flat rate.