Getting a corporate bank account - how difficult?

[steveflyer]

Hi

Has it become very difficult for non-residents with foreign companies to open corporate accounts at the big 3 Singapore banks? I've heard so much conflicting information.

I know I need to fly to Singapore to do this - that's not the problem.

There's plenty of services online that say they'll charge me a fee and then help my foreign business open a bank at DBS or UOB in Singapore, but of course they would say that.

And then I've talked to people who say it's extremely difficult for any foreign companies to open bank accounts in SG unless they have many ties to Singapore and at least mid-6 figures to deposit.

And there are others who say even many Singapore businesses are struggling to open accounts at the big 3 banks now.

Very hard to figure out my chances, without going to Singapore, paying a service, and being willing to lose a bunch of money in the process.

Can anyone shed any light on things?

[Myasis Dragon]

Ever since several Singapore banks were either shut down or fined very large amounts of money for facilitating money laundering in the Malaysian 1MDB scandal, Singapore has further cracked down on their "know your customer" banking rules and banks are loathe to open accounts for people they don't know, and this specifically applies to foreign companies trying to open bank accounts. It's just too easy to launder money, and it's just to hard to confirm the foreign company's sources of income or where its withdrawals are going. Maybe if your company has a confirmed international track record and has been around for years, you might have a chance. Otherwise, my view is that you're not worth the risk to the banks.

[PNGMK]

Transferwise (wise.com) will do it if you have a Singapore Pte Ltd. Free and easy and works just like a corporate account. Also no limits on how much you hold.

[sundaymorningstaple]

But cannot use the WISE card (if issued in Singapore) to withdraw cash from ATM in Singapore - rest in rest of the world can though.

[steveflyer]

Maybe if your company has a confirmed international track record and has been around for years, you might have a chance. Otherwise, my view is that you're not worth the risk to the banks.

Thanks, this is what I have been told a few times now.

[steveflyer]

Transferwise (wise.com) will do it if you have a Singapore Pte Ltd. Free and easy and works just like a corporate account. Also no limits on how much you hold.

I definitely wouldn't put more than 4 figures into any fintech account. I previously had Revolut lock my funds for months out of the blue, and I've seen way too many people report similar things with all fintech banks. Way too risky to be putting large sums of money in them. I'm looking at Singapore's big banks precisely because they're among the safest in the world, but I consider fintech the opposite.

[PNGMK]

Steve - I understand the concern. Wise is quite different to Revolut in that it is both Singapore MAS registered as well as UK FCA. I've had friends transfer SGD$3MM with wise from the UK to Australia. Wise actually use bank accounts to hold funds in unlike Revolut or PayPal.

I would not HOLD money in wise but if you need to be able to receive payments and make payments from a company account I find it quite a good option. I routinely invoice in SGD and USD via Wise and have zero issues.

The other option is to buy a shelf company that has a bank account opened. I have opened up corp accounts with OCBC recently and it has not been too difficult but yes, I've had to be here in person to do it. I know a good CPA if you want to DM me who can set it all up and confirm it will happen before you come out.

[steveflyer]

Steve - I understand the concern. Wise is quite different to Revolut in that it is both Singapore MAS registered as well as UK FCA. I've had friends transfer SGD$3MM with wise from the UK to Australia. Wise actually use bank accounts to hold funds in unlike Revolut or PayPal.

I would not HOLD money in wise but if you need to be able to receive payments and make payments from a company account I find it quite a good option. I routinely invoice in SGD and USD via Wise and have zero issues.

Thanks for the reply that's good to know, definitely sounds better for sending transactions. The main reason I'm looking at Singapore for a bank account is, currently I'm a Brit but have a company in Taiwan, but I don't want all my money in local currency in Taiwanese banks right now due to the current political situation and tensions rising. So I'm just trying to work out my options with putting money elsewhere.

The other option is to buy a shelf company that has a bank account opened. I have opened up corp accounts with OCBC recently and it has not been too difficult but yes, I've had to be here in person to do it. I know a good CPA if you want to DM me who can set it all up and confirm it will happen before you come out.

Fantastic I hadn't thought about buying a shelf company that already has a bank account - that could actually be great. I'll send you a DM.

[Myasis Dragon]

Steve - I understand the concern. Wise is quite different to Revolut in that it is both Singapore MAS registered as well as UK FCA. I've had friends transfer SGD$3MM with wise from the UK to Australia. Wise actually use bank accounts to hold funds in unlike Revolut or PayPal.

I would not HOLD money in wise but if you need to be able to receive payments and make payments from a company account I find it quite a good option. I routinely invoice in SGD and USD via Wise and have zero issues.

Thanks for the reply that's good to know, definitely sounds better for sending transactions. The main reason I'm looking at Singapore for a bank account is, currently I'm a Brit but have a company in Taiwan, but I don't want all my money in local currency in Taiwanese banks right now due to the current political situation and tensions rising. So I'm just trying to work out my options with putting money elsewhere.

The other option is to buy a shelf company that has a bank account opened. I have opened up corp accounts with OCBC recently and it has not been too difficult but yes, I've had to be here in person to do it. I know a good CPA if you want to DM me who can set it all up and confirm it will happen before you come out.

Fantastic I hadn't thought about buying a shelf company that already has a bank account - that could actually be great. I'll send you a DM.

I don't think that you'll find a shelf company to be such a hot deal in Singapore. It may or may not come with a bank account (most likely not). If and when you purchase a shelf company, you'll still need to update directors with the ACRA, then file directors resolutions with the bank that said bank account is associated with to add yourself and remove the rented directors. The banks here aren't stupid... they know if Rivkin or some other outfit has created the company, and you'll probably be subject to the same conditions when you sign on as director as for a new company.

Really, if you read the blather from the Singapore companies offering shelf companies, the big "feature" is that you can buy a company that has been in existence for 2 or 3 years, and this allegedly makes it easier to get bank loans (don't believe it - I ran a company for 8 years, with substantial bank balances, and I couldn't even get any of these folks to factor my receivables).

Prices for a shelf company range from about $2500 (same as setting up a new company) to $20,000 and more for companies that have been in existence for a while and allegedly have more "gravitas". I just don't see it in Singapore. You can basically incorporate in about a day, use boiler plate articles of incorporation, standard minutes, and Bizfile registration and be good to go.

Contrast this with Thailand, where I setup a company. It's a major pain in the ass, with endless paperwork, stupid rules, and to often, the need to grease palms. Since you have to have Thai directors on board anyway, an existing shelf company makes sense in Thailand but not in Singapore.

Finally, you haven't mentioned if you'll be resident or not. Sounds like not. This makes you a non resident director. Any earnings that you get from your Singapore registered company will be taxed at a 22.5 percent rate before the funds are sent to you. Your agency with a rented director is probably going to insist that you have a normally resident director since they don't want the liability for actions of your company.

[steveflyer]

Steve - I understand the concern. Wise is quite different to Revolut in that it is both Singapore MAS registered as well as UK FCA. I've had friends transfer SGD$3MM with wise from the UK to Australia. Wise actually use bank accounts to hold funds in unlike Revolut or PayPal.

I would not HOLD money in wise but if you need to be able to receive payments and make payments from a company account I find it quite a good option. I routinely invoice in SGD and USD via Wise and have zero issues.

Thanks for the reply that's good to know, definitely sounds better for sending transactions. The main reason I'm looking at Singapore for a bank account is, currently I'm a Brit but have a company in Taiwan, but I don't want all my money in local currency in Taiwanese banks right now due to the current political situation and tensions rising. So I'm just trying to work out my options with putting money elsewhere.

The other option is to buy a shelf company that has a bank account opened. I have opened up corp accounts with OCBC recently and it has not been too difficult but yes, I've had to be here in person to do it. I know a good CPA if you want to DM me who can set it all up and confirm it will happen before you come out.

Fantastic I hadn't thought about buying a shelf company that already has a bank account - that could actually be great. I'll send you a DM.

I don't think that you'll find a shelf company to be such a hot deal in Singapore. It may or may not come with a bank account (most likely not). If and when you purchase a shelf company, you'll still need to update directors with the ACRA, then file directors resolutions with the bank that said bank account is associated with to add yourself and remove the rented directors. The banks here aren't stupid... they know if Rivkin or some other outfit has created the company, and you'll probably be subject to the same conditions when you sign on as director as for a new company.

Really, if you read the blather from the Singapore companies offering shelf companies, the big "feature" is that you can buy a company that has been in existence for 2 or 3 years, and this allegedly makes it easier to get bank loans (don't believe it - I ran a company for 8 years, with substantial bank balances, and I couldn't even get any of these folks to factor my receivables).

Prices for a shelf company range from about $2500 (same as setting up a new company) to $20,000 and more for companies that have been in existence for a while and allegedly have more "gravitas". I just don't see it in Singapore. You can basically incorporate in about a day, use boiler plate articles of incorporation, standard minutes, and Bizfile registration and be good to go.

Contrast this with Thailand, where I setup a company. It's a major pain in the ass, with endless paperwork, stupid rules, and to often, the need to grease palms. Since you have to have Thai directors on board anyway, an existing shelf company makes sense in Thailand but not in Singapore.

Finally, you haven't mentioned if you'll be resident or not. Sounds like not. This makes you a non resident director. Any earnings that you get from your Singapore registered company will be taxed at a 22.5 percent rate before the funds are sent to you. Your agency with a rented director is probably going to insist that you have a normally resident director since they don't want the liability for actions of your company.

Thanks for the reply, yes upon looking into it further, others have also said the same as you with regard to needing to update directors with the bank and being denied.

No I wouldn't be a resident, but I thought Singapore companies were territorially taxed and not taxed on foreign sourced income?

[Myasis Dragon]

Thanks for the reply, yes upon looking into it further, others have also said the same as you with regard to needing to update directors with the bank and being denied.

No I wouldn't be a resident, but I thought Singapore companies were territorially taxed and not taxed on foreign sourced income?

Ahhh... yet another who has seen the IRAS "foreign sourced income" webpage. It's not what you think it means.

If you have a registered company in Singapore and it sells kumquats in Malaysia for a profit, that is taxable income in Singapore.

If you have a registered company in Singapore and it rents out IT technicians in India, that is taxable income in Singapore.

In other words, it doesn't matter where your company earned its income, what matters is that the company is registered in Singapore and therefore its profits are taxable in Singapore.

Example: My company had a large contract in Australia for the distribution of netbooks for a school district. We made a lot of money, paid by the Australian school district, and it was taxable in Singapore.

Foreign sourced income means income that you earned while out of Singapore long enough to be taxable in whatever country you are working in.

Example: You work for 190 days in Malaysia. Your income is taxable in Malaysia. Therefore, it is foreign sourced income and not subject to taxes in Singapore.

In any event, none of this is applicable to you as a non-resident director or senior manager. If you are compensated by your Singapore company, your Singapore company is required to remit income taxes to IRAS before sending you funds. Example: You are to be paid $1000 for services. Your company must remit $220 to IRAS before sending you the remaining $780.

The logic behind this is simple. If you are living in a foreign country, IRAS has no way of collecting taxes that you owe. Secondarily, Singapore really doesn't care for companies with foreign directors because of the opportunities for criminal activities.

Edited to add: You may say, "Well, I am living in a foreign country as director, why doesn't this foreign sourced income rule apply to me?" And the answer is that the Singapore gahmen has specifically chosen to make non-resident directors and senior managers resident for tax purposes.

https://www.iras.gov.sg/taxes/withholdi ... t-director

And as I mentioned previously, if you use one of the company formation companies in Singapore, they are going to insist that you are resident or at the very least, that you supply a "normally resident" director so that they can disengage. They do not want to be your resident director because of the liabilities associated with the role.