The Maritime and Port Authority of Singapore (MPA) is entrusted with the mission to developSingaporeas a premier global hub port and international maritime centre (IMC), and to advance and safeguardSingapore’s strategic maritime interests. MPA takes on the roles of Port Authority, Port Regulator, Port Planner, IMC Champion, and National Maritime Representative.

The following is a guide to the licensing & permit procedures for setting-up a shipping establishment in Singapore. This is not a comprehensive guide and readers are advised to refer to the MPA’s site at www.mpa.gov.sg for latest updates.

Registering the company

Registering the company with Accounting and Corporate Regulatory Authority of Singapore is the foremost requirement. This is a statutory prerequisite to conduct any form of business activities inSingapore. Incorporating aSingaporecompany is a simple process and can be done within the same working day if all papers are in order.

Licensing of Crafts

Licenses are needed for plying vessels or craft in theSingaporeport waters, including permission for activities associated with such vessels.

Harbor Craft License

The Maritime and Port Authority (Harbour Craft) Regulations states that no vessel shall be used as a harbour craft within theport ofSingapore without a harbour craft license. Harbour Crafts ply only within the Port Limits of Singapore or places within the port limit as stipulated in the craft license certificate. Every harbour craft proceeding outside Port Limits must possess a valid port clearance certificate.

Harbour craft licenses are issued by the Maritime and Port Authority ofSingapore(MPA) to vessels used for commercial purposes within the port. There are six categories of licenses issued depending on the purpose and type of craft, such as bum boat, passenger boat tug boat etc.

How to Apply for License

1. Submit Application & Supporting documents

   An applicant is required to submit the duly completed Application Form for a Harbour/Pleasure Craft Licence (PM74), along with the originals and copies of the following supporting documents at the MPA’S One-Stop Document Centre (OSDC)

   • NRIC(s) for licensing in the name of one or more individuals
   • Instant Information Printout from the Accounting and Corporate Regulatory Authority (ACRA) for licensing in the name of a corporate body.
   • Proof of ownership – Bill of Sale, Charter Agreement, Builder’s Certificate, Hull Receipt or Invoice, etc
   • Proof of origin of vessel – Launching Permit, Import Permit, General Arrival Declaration, whichever is applicable;
   • Insurance Policy – A marine policy covering third party liabilities including wreck removal and personal/passenger injuries
   • Craft’s manning – MPA Manning license
   • Letter of approval for use of pier/landing places where applicable issued by the owner/manager of the facilities;
   • Any other documents or requirements as required by the Port Master.
2. Inspection of the craft
   Every vessel should pass a compulsory inspection of her hull, equipment and appliances for the licensing as a harbour craft. Arrange with the One-Stop Document Centre (OSDC) for the place, date and time of the inspection in person at least one week in advance. It should be noted that such inspection is to be carried out every 12 months before its license is renewed.
3. Obtaining License
   The applicant will be issued a Craft Inspection Report once the craft passes the inspection. Payment must be made towards the dues and fees, within seven days from the date of inspection. The craft license must be displayed in a conspicuous place on board at all times. The license number must be Carved-on or cut-in into the main beam of the vessel and must be legible and visible on the vessel and its portable lifesaving and firefighting appliances at all times.

Port Limit Manning License

All crew working on board a harbour craft are required to possess a valid Port Limit Manning License. There are different types of Manning Licenses.

Application for Port Limit Manning License must be made within 6 months of the passing date of examination/ COC or expiry of the manning licenses. Duly completed Port Limit Manning License application form must be submitted along with the following documents to the MPA’s One Stop Document Centre

• Certificate of Competency or Result slip from MPA’s Maritime and Port Training Section
• Identity Card/NRIC (for locals) and Passport (for foreigners)
• Certificates of relevant additional courses attended
• Work Permit /EmploymentPass(for foreigners only)
• 1 recent passport-sized photograph
• Existing license (for Renewals only) – To be surrendered to MPA. A police report is to be made and submitted if this is lost

Upon payment of fees the MPA will review the form and documents submitted and will issue the Port Limit Manning License.

Permit to Launch a New Vessel in the Port

Regulation 52 of the Maritime and Port Authority of Singapore (Port) Regulations states that Vessels more than 15 meters long require written permission from the Port Master before they can be launched in port.

A “Permit to Launch a New Vessel” must be obtained from the Port Master before the vessel can be launched, by submitting two copies of the completed, signed and stamped Permission to Launch a Newly Constructed Vessel into the Waters of the Port Form to MPA’s One-Stop Document Centre (OSDC). The submission must be madewithin 3 working days prior to the launching of vessel.

Permit to Lay-Up a Vessel in Port

A vessel, which is not under repair or not actively employed, to be laid-up in the port requires a prior written permission of the Port Master and subject to such conditions as he may impose.

The owner / agent must submit the following to MPA’s One-Stop Document Centre (OSDC):

1. 2 copies of duly completed Permission to Lay up a Vessel in the Port form
2. Original of valid Ship’s Registry, Safety Construction, Safety Equipment, Loadline and International Oil Pollution Prevention Certificates, or Certificate of Fitness (fit to be lay-up) issued by the recognized Classification Society, ISM Code (DOC & SMC) and ISPS Code (ISSC).
3. Letter from local P & I Club Representative confirming that the vessel is entered with the Club and insured for Port Risks (i.e. Oil Pollution, Wreck Removal Salvage Costs);

In the absence of P & I Club coverage, the vessel must be insured for similar risks by an Insurance Company having a representative office inSingapore. A copy of the Cover Note issued by that office is to be submitted. The insured value for oil pollution risk – $450/-per GT, Wreck removal, salvage and salvage cost – $250 /- per GT of Hull value whichever is greater.

1. 1 copy of the Crew List according to minimum manning requirement. Qualification of Officers & Crew should be as those acceptable to MPA Shipping Division orPortofRegistry.
2. In the case of Tankers, Chemical / Bulk Carriers and Oil Barges, Original of recent “Certificate of Freedom from Flammable Goods”
3. Original of Fire-fighting Certificates (issued by the competent Fire Authorities) held by the Officers & Crew

The “Temporary Permit to Lay-Up a Vessel in Port” is granted based on the expiry dates of the certificates submitted along with the form. An extension of the Permit must be obtained if the vessel is still inactive at the end of the expiry date. The extension is subject to renewal of the expired certificates.

Ship Registration Certificate

Registration is open to all types of ships except fishing vessels, hydrofoils and wooden vessels. Vessels can be registered under foreign flag or Singapore flag. Some inherent benefits of registering ships under Singapore flag are discussed later in this article. The process of registering a ship with Singapore Registry of Ships (SRS) is straightforward and easy, but before registering, a vessel must satisfy the following prerequisites:

• Generally, ships less than 17 years will be considered for registration
• OnlySingaporecitizens, permanent residents orSingaporeincorporated companies (foreign owned or locally owned) can be registered as owners ofSingaporevessels.
• In case of a foreign-owned company – a company incorporated inSingaporeand has more than 50% of its equity owned by foreigners- the vessel may be registered inSingaporeunder the following conditions
• The company must have a minimum paid-up capital of S$50,000.
• The vessel must be at least 1,600 GT and be self-propelled.
• The Registrar may in his discretion, waive the minimum paid-up capital and gross tonnage conditions on a case-by- case basis depending on certain conditions. Owners must apply to the Registrar for such waivers.
• In case of a locally owned company – a company incorporated in Singapore and has more than 50% of its equity owned by Singapore citizens or another locally owned company – the vessel may be registered in Singapore if the company satisfies the minimum paid-up capital requirement.
• For tug- and barge-owning local companies and their holding companies, the paid-up capital will be pegged to 10% of the value of the first tug or barge registered or S$50,000, whichever is the lesser, subject to a minimum of S$10,000.
• Write in to Registrar of Ships
  If the above prerequisites are met, then write in to the registrar seeking approval of vessel name and apply for an official number for the vessel and Call Sign Number/Signal Letter.
• Submit Application form and Supporting Documents
  A Vessel maybe registered provisionally or permanently. Provisional registration is valid for a maximum period of one year with no possibility of any extension. The vessel must be transferred to the permanent register before the end of this period. The transfer will be effected when all the outstanding documents for permanent registration are submitted and there is no fee for this transfer.
• In order to register the following must be submitted:
  • Duly completed Registration Application Form
  • Appointment of Agent Form – an agent may be appointed to sign the declaration in the registration application in lieu of the individual owner or Director/Secretary the company. This form is applicable in such cases only.
  • Appointment of Manager Form – The vessel manager is responsible for the operations of the vessel, for all matters related to the crew, safety and prevention of pollution. All communication relating to the vessel will be directed to the manager
  • Supporting Documents
    • Business Profile Printout from ACRA
    • Copy of certificate of Incorporation
    • Proof of ownership – Builder’s certificate in case of new vessels or in the case of existing vessel, a copy of the Bill of Sale or the transcript of its former registry to establish ownership
    • Value of the vessel – The owner must declare the value of the vessel inSingaporedollars on the company’s letterhead if this is not reflected in other documents submitted
    • A tonnage certificate issued by the MPA’s Shipping Division or any of the classification societies authorized by the MPA.
    • Copy of the vessel’s classification certificate issued by any of the authorized classification societies
    • Other statutory compliance certificates
    • Where the vessel has, at any point in time, been registered in another country or struck off the register an evidence of cancellation of former registry.
• Pay Fees and Receive registration
  Upon submitting the forms and supporting documents and payment of the fees as applicable,a Certificate of Registry and a Carving and Marking Note will be issued. The Carving and Marking Note has to be certified by a surveyor from the MPA’s Shipping Division or one of the authorized classification societies and returned to the Registry within 30 days of its issuance date.

Benefits of registering ships under Singapore flag

Administered by the Maritime and Port Authority of Singapore (MPA), Singapore Registry of Ships (SRS) is internationally recognised for its efficient services, high operational and pollution control standards, and good safety record. It ranks among the top ten largest registries in the world, with more than 3,000 registered vessels, totaling 43.7 million gross tons, and is the preferred choice of flag for many international ship owners. Some of the benefits of registering vessels under Singapore flag are

• Adoption of international standards
  Singapore is a party to all the major International Maritime Organization (IMO) conventions on ship safety and marine pollution prevention.
• Good safety record
  The SRS is on the White List of key port state control regimes, with a dedicated flag state control unit (FSCU) that actively monitors, identifies and regularly penalises any non-conforming ships in the SRS.
• Experienced and responsible administration
  The SRS is a hands-on and efficient administration, quick to respond to the needs of the shipping community with diligence and high quality of service. With over 30 years of experience, it is recognised as a non flag of convenience (FOC) registry by both the United Nations Conference on Trade and Development (UNCTAD) and the International Transport Workers’ Federation (ITF).
• Choice of classification societies
  Nine internationally recognized classification societies, in addition to MPA, are authorized to survey and issue tonnage, safety and pollution prevention certificates to Singapore ships
• Flexibility on crew nationality
  As There are no restrictions on the crew’s nationality. Foreign officers and ratings may sail in Singapore ships within the capacity they are qualified to sail in. In order to maintain quality and competence, all crew must meet the standards of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) 1978. This is a definite advantage because qualified seafarers are a rare talent pool.
• Recognition of foreign certificates of competency
  Singapore allows foreign officers and engineers who hold valid and relevant foreign certificates of competency (COC) to serve onboard Singapore ships. No prior approval is required. Owners simply need to apply for a Certificate of Endorsement (COE) for their crew who hold foreign COC.
• Tax exemption
  Profits derived from the operation of a Singapore vessel are exempt from Singapore income tax.

Applying for surveys and certification of Singapore-registered ships

Surveys and certification of Singapore-registered ships may either be carried out by the MPA Ship Safety Department or any one of the classification societies authorized by the MPA as recognized organizations (RO). For list of RO, please refer MPA’s website.

Owners or companies of Singapore-registered ships who wish to have a radio survey carried out by a radio surveyor appointed by the MPA should apply directly with any of them. MPA will review the radio survey report submitted by the radio surveyor before issuing or endorsing the Cargo Ship Safety Radio Certificate. For a list of appointed radio surveyors, please visit MPA’s website.

Manning Requirement for Singapore- Registered Ships

Owners and masters of Singaporeregistered ships have to meet certain manning requirements.

There are no restrictions on the crew’s nationality. Foreign officers and ratings may sail inSingaporeships, within the capacity they are qualified to sail in.

Singaporeships need to be manned by a minimum number of qualified officers in accordance with the scales stated under the Merchant Shipping (Training, Certification And Manning) Regulations 1998 .The key requirements include:

• At least three certificated deck officers (master, chief officer and second officer) are required for ships above 3,000 GT.
• At least three certified engineers (chief engineer, second engineer and other engineer) are required for ships above 3,000 kW.
• There is no minimum number for ratings. The ship-owner or ship-manager should propose to the Shipping Division of the MPA such number which will be subjected to approval.

AllSingaporeships need to be safely manned and hold a Safe Manning Document (SMD) issued according to the SOLAS Convention and the principle contained in the IMO Resolution A.890 (21). Application for the SMD should be made to the Shipping Division of the MPA.

As regards qualification of officers, MPA recognizes foreign Certificates of Competency (CoC).The CoC must be issued by an administration whose certificates are recognized by MPA. An officer who holds a foreign CoC needs to be issued a COE by MPA to serve on aSingaporeregistered ship. The COE is strictly issued to officers holding a CoC from countries that have signed agreements with the MPA. A COE is valid for five years from the date of issue. The COE will not be valid once the applicant’s CoC expires. Ratings do not require COE.

Port Clearance Certificate

For Departing Vessels

• An owner, agent or master must make a declaration before the vessel’s departure from Singapore and obtain a Port Clearance Certificate from the Maritime and Port Authority. For this purpose, two copies of the completed General Declaration Form must be submitted to the MPA’s One Stop Document Centre with thesupporting documents. MPA accepts certified true copies of the supporting documents endorsed by the proper issuing Authorities in the absence of the originals.
• Upon proper review of the documents submitted and manning inspection of the vessel, MPA issues Port Clearance Certificates to vessels that have met the requirements above and paid the port dues. The agent should ensure receipt of all the vessel’s documents before leaving the counter at OSDC.
• A vessel must leave the port within 48 hours or a shorter period specified by the Port Master after obtaining the port clearance. An agent must return the Port Clearance Certificate to the Port Master within 6 hours after the departure period if the vessel failed to depart during the departure period.

For Arriving Vessels

The owner, agent, master or person-in-charge of Single Hulled Tankers (SHTs) arriving inSingaporemust make a pre-arrival declaration before the arrival of the vessels intoSingaporeport. The owner, agent, master or person-in-charge of these vessels must notify the Port Master in the prescribed format to the Port Master by fax or telex

• at least 12 hours prior to the vessels’ arrival inSingapore;
• once the vessel departs if they come from a nearby port with less than 12 hours steaming time toSingapore; or
• at least 24 hours in advance if they carry hazardous and noxious substances in bulk

An owner, agent or master must declare the arrival of their vessel within 24 hours upon arrival inSingaporeand the following must be submitted to the MPA’s One Stop Document Centre along with two copies of General Declaration Form

• Original Port Clearance of last port of call,
• Certificate of Insurance in respect of Civil Liability for Oil Pollution Damage (if applicable) and
• IMO Certificate of Fitness for LNG/LPG and vessels carrying dangerous chemicals in bulk

OSDC will allot a GDV Number (General Declaration of Vessel Number) on receipt of the required documents, and stamp the GDV Number on all copies of the General Declaration. The OSDC will retain the original copy of the General Declaration for arrival of vessel and return a copy of it to the shipping agent.

Note: The shipping community may choose to carry out port clearance formalities for vessels at the offices of shipping agencies by using the Electronic Port Clearance (EPC) via Marinet. EPC users can apply and obtain port clearance for vessels when they undertake and declare that their vessels are properly crewed, and possess the valid certificates and documents. EPC users need not present the original certificates for inspection at the OSDC unless there is a change in last recorded data.

Supporting Documents for Port Clearance

• Certificate of Registry;
• Load Line Certificate;
• Passenger Ship Safety Certificate (for passenger vessel only);
• Cargo Ship Safety Construction Certificate;
• Cargo Ship Safety Equipment Certificate;
• Cargo Ship Safety Radio Certificate;
• Certificate of Insurance or other Financial Security in respect of Civil Liability for Oil Pollution Damage (CLC 92). This applies to a vessel carrying in bulk a cargo of more than 2,000 tonnes of persistent oil;
• Certificate of Fitness issued pursuant to IMO Codes on vessels carrying liquid bulk dangerous substances (including liquefied gases);
• Crew List (in duplicate);
• Passenger List, if applicable (in duplicate);
• International Oil Pollution Prevention (IOPP) Certificate with approved Shipboard Oil Pollution Emergency Plan (SOPEP) and if applicable, compliance with Regulation 13G and 13H of Annex I to MARPOL 73/78;
• International Tonnage Certificate (ITC69);
• Certificate of Insurance for passenger vessel;
• International Safety Management (ISM) Code with approved Document of Compliance (DOC) and Safety Management Certificate (SMC);
• International Ship Security Certificate;
• International Air Pollution Prevention Certificate;
• International Sewage Pollution Prevention Certificate
• Bunker Convention Certificate

Incentives for Shipping Companies in Singapore

MPA has in place a growing number of incentives and initiatives to help both new and existing players develop their business inSingapore.

Maritime Sector Incentive – Approved International Shipping Enterprise (MSI-AIS) Award - seeks to encourage international ship owners and ship operators to establish their commercial shipping operations inSingapore. Companies qualifying under the scheme will enjoy tax exemption on qualifying shipping income for either:

• a 10-year renewable period; or
• a 5-year non-renewable period, with the option of graduating to the 10-year renewable award at the end of the 5-year period

Maritime Sector Incentive – Maritime Leasing (MSI-ML) Award

Encourages entities to use Singaporeas their capital and funding base to finance their vessels or sea containers. Under this scheme Ship or container leasing companies, funds, business trusts or partnerships will get to enjoy tax concessions for up to 5 years on their qualifying leasing income. Also an approved manager of the asset-owning entity will be awarded a concessionary tax rate of 10% on its qualifying management income.

Maritime Sector Incentive – Shipping-Related Support Services (MSI-SSS) Award

Promotes the growth of ancillary shipping service providers and to encourage shipping conglomerates to set up their corporate services functions in Singapore. Qualifying company will enjoy a concessionary tax rate of 10%, for a period of 5 years, on the incremental income derived from the provision of the following qualifying approved shipping-related support services:-

• Ship broking
• Forward freight agreement (FFA) trading
• Ship management
• Ship agency
• Freight forwarding and logistics services and
• Corporate services rendered to qualifying approved related parties who are carrying on business of shipping – related activities

Withholding tax exemption

Qualifying entities which obtain qualifying loans from foreign lenders are exempted from withholding tax on interests.

In addition to the above, the Maritime Cluster Fund (MCF) facilitates the growth ofSingapore’s maritime cluster by supporting the industry’s manpower and business development efforts.

Concession for Vessels on Maiden Voyage Calls

Vessels on their maiden voyage, calling in Singapore, are eligible for a concession in port dues. 50% one time reduction in rates shall be granted for the maiden voyage call of vessels of 75 GT or more. In order to qualify the vessel should be less than 3 years of age and should be calling inSingapore for the first time.

Accounting and Corporate Regulatory Authority (ACRA) recently unveiled its maiden publication “ACRA & I – Being an Effective Director”, a handbook for “new or aspiring” directors, to better understand their responsibilities and knowledge of their legal and compliance requirements. Asiabiz welcomed the launch of the book which is part of the initiatives by ACRA to promote voluntary compliance among companies.

The handbook provides comprehensive information such as common statutory requirements under the Companies Act, such as statutory reporting, capital maintenance and fiduciary duties. The guidebook includes case studies, red flags, and sample forms, to assist directors in better assessing, reporting and managing various situations in the course of their duties. The 157 page book costs only S$15 and online downloads are available for free. This will help many of the directors to avoid expensive mistakes and propagate the practice of voluntary compliance and prevent enforcement actions by ACRA.

Rikhil says “as an agency helping clients in their Singapore company registration requirements, we have observed that most of them are not aware of their statutory obligations as a director of a company. As a full service agency, we do take care of the compliance requirements of our clients but when we take up new companies, they have records of default which could have been easily avoided with some awareness and alertness. Though agencies like Asiabiz can edify and help the clients who come under their purview there is still a large section which needs awareness. With such awareness comes adherence to regulatory requirements which will result in improved corporate governance culture. This little move will help us get there and we are sure that this will be widely commended by the industry participants.”

Commenting on the timely launch Rikhil says, “With the number of small companies growing and spike in new Singapore company formation there is a urgent need for public education and awareness and ACRA has come out with the book at the right time. In early 2010 ACRA spelt out an agenda to inculcate a culture of voluntary corporate compliance without resorting to penal actions, and this initiative is part of it. Being aware of their duties will help the directors to implement adequate internal systems and processes which would ensure continuing prompt compliance with the legal and statutory requirements. Lack of awareness results in costly mistakes that is a drain on the resources for both the defaulting company as well as ACRA, so overall this can be regarded as a measure to promote productivity.”

About the Publisher:
With clients ranging from small-medium enterprises to large Fortune 100 companies, our goal is to help new businesses with the first step of their journey to success. Our in-house propriety software as well as the Singapore company incorporation website, has proved to be a cost-effective and expeditious tool for entrepreneurs in setting up and running their businesses.

Asiabizservices Pte Ltd
Our Address: 120 Telok Ayer Street, Singapore 068589
Phone: (+65) 6303 4614
Fax: (+65) 6303 2670
Website: http://www.asiabizservices.com/

In 2009, the government implemented a resilience package amounting to S$20.5 billion to help Singaporean residents and citizens retain their job and maintain their capacity to support their respective families.

Part of the resilience package focuses on accelerating the investments for future. By this, the government equips its citizens with world-class education in their youth, broadens training opportunities in their working stage, and provides the best care services during their silver years.

To continue with its pursuit of making the city-state a global entrepreneurial city, the government imposed incentives for investments across the industries, assists in up-building innovative capabilities among its small and large businesses, stimulates bank lending with provisions for loan losses, enhances business cash flow and competitiveness, and mitigated its corporate tax rate by a point at 17% taking effect on 2010.

It renewed bilateral trading agreements and free trade agreements with different countries in Asia Pacific.

In the third quarter of 2010, the prime minister announced a GDP growth of 18%, a stark difference from the government’s forecasted 12%. By the end of the current year, the government expects an additional 100,000 employees to join the labor force.

Doing business is easiest in Singapore. Foreign investors are permitted to own 100% of the company shares, have the liberty to repatriate their earnings, and can import their capital.

AsiaBiz Services, a company dedicated in assisting foreigners in registration and incorporation of companies exclaims that in 2010, hundreds of clients from Asia and beyond approached the company to spearhead the company setup and processing of necessary working visas.

Asiabiz Services specializes in rendering professional services to foreigners including accounting and Nominee Director Services and processing of Employment Pass, Entrepreneur Pass, and Dependent Pass.

A company is clothed with legal personality. Hence, in its name, the company can sue and be sued, can possess and dispose assets, and can incur debts and losses. Its shareholders are liable as far as for any amount unpaid on their shares. Nonetheless, when the shares are paid wholly, its shareholders are not responsible for any debts of the company.

In a conversation with a business consultant of Asiabizservices, a Singaporean private limited company established to provide professional services such as incorporating a company, it is understood that the first procedure of incorporating a company is to register for approval of business name with ACRA.

As soon as the business name is approved, the incorporation information is filed online with ACRA. Unless the notification of incorporation is received through an e-mail from ACRA, the company should refrain from engaging in any business operation. Included in the said e-notification is a statement from ACRA informing its shareholders and directors that they can commence with their business activities. Asiabizservices says that effective May 2003, a company can incorporate even with a minimum of 1 director who is a natural person of legal age and capacity.

“If the company has 1 director only, that person must be ordinarily resident in Singapore,” the business consultant emphasized, referring to Singaporean citizenship, permanent residence or an individual who holds an Employment Pass and is residing in a Singapore address.

Nevertheless, a company having more than one director is not required that all directors should maintain an ordinary residence in Singapore. Similarly, in a private company, there exists at least 1 shareholder who is either a natural person or a distinct corporate entity or business firm. With regards foreign equity participation, Asiabizservices assures that such is not restricted in a Singapore company.

In addition, a company secretary ought to be appointed within 6 months after its incorporation and who shall be a natural person with Singapore as the secretary’s only principal residence.

As part of the company’s annual requirements, Asiabizservices’ business consultant reminds that an auditor appointed by the company within 3 months following its incorporation is obliged to report to its members on the accounts of the company, unless the company has been dormant or registered as a small exempt private company or EPC.

However, although small EPCs and dormant companies—which according to Asiabizservices refers to any company maintaining no accounting transactions—are exempted from statutory auditing requirements, they are expected to prepare their financial statements patterned after the Financial Reporting Standards.

Here’s a rundown of the advantages and disadvantages of Singapore company  incorporation, according to AsiaBiz Services, one of the leading corporate solutions providers in the Singapore:

Advantages of Singapore Company Incorporation commonly known in some countries as  Corporation

1. Foreign entrepreneurs can operate and setup a Singapore company.
2. Generally, it takes 3 hours to setup a company in Singapore
3. Foreign companies who setup a Singapore subsidiary company enjoy tax resident status which means that they can enjoy tax incentives and exemptions which are commonly provided to local businesses. A newly incorporated Subsidiary Company , with at least one individual shareholder that has a minimum of 10% shareholding, is entitled to the local tax exemption of zero tax for the first S$100,000 of its chargeable income.
4. The Singapore government provides several tax incentives to certain foreign companies in an effort to attract more companies to operate their company operations from Singapore.
5. The Singapore has the fastest-growing economy in the world for several consecutive years.
6. The country boasts world-class infrastructure which is one of the contributing factors to raise the business productivity.
7. Singapore is located at the heart of the Asia Pacific region which makes this ideal for international foreign companies that are planning to tap the major Asian markets including China, Taiwan, Malaysia, India, and Australia.
8. The country allows a corporation to be a 100 percent foreign-owned company (as long as it will designate at least one director who is a local resident or a holder of a Singapore Employment Pass, Entrepass, or Dependent Pass).

Disadvantages of Setting up an Incorporated Company in Singapore

1. Corporations are required to file their annual returns to the Companies Registry and Income Tax authorities.
2. Foreign businesses with a Singapore branch office are also required to file the audited accounts of their parent company.
3. Foreign companies should designate at least one director who is a Singaporean citizen or a holder of Singapore Employment Pass, Entrepass, or Dependent Pass.
4. Individuals who declared bankruptcy in the past and have criminal records cannot serve as a company director.
5. A business should designate a secretary who is a local resident within six months of its incorporation.
6. Under the corporate law, it is mandatory to conduct a paper meeting on an annual basis.
7. While Singapore has a high standard of living, its cost of living is also high.

Singapore has been voted as the ideal location for global entrepreneurs, with world-class infrastructure, well developed capital markets, highly educated work force,  stable political institutions, very low crime, safe living environment and an attractive tax regime, no wonder it is the most sought location for business and migration.

Asiabiz has help thousands of entrepreneurs successfully setup their Singapore company by assisting the incorporation of the  Singapore Company and successfully securing their work pass, be it Employment pass, Entrepass or Personalised Employment pass (PEP).

For more information on Singapore company incorporation , please visit http://www.asiabizservices.com/incorporation/
For more information on work visa please visit http://www.asiabizservices.com/singapore-immigration/

The Urban Redevelopment Authority (URA) has release data showing the surge in median rentals of non-landed residential properties to $32.41 per square metre (PSM) in May from $30.54 psm in January, while rental for units in the central region stands at an even higher price of $36.89 psm. Currently, the maximum monthly rental for non-landed residential properties in central Singapore stands at $114.58 psm.

Across Singapore, maximum rental swerves between $33.65 psm to $60.87psm. while minimum rentals varies between $10.18 psm to $14.36 psm.

Market watchers commented that this surge in residential rents is a direct result of an economy that is picking up as well as a strong property market. The rising number of property owners who increase rent in a bid to earn higher returns could be another contributing factor to the rental surge.

Mr James Nuben of Asiabiz Services said that factors such as the increase in housing demand by more foreign individuals who incorporate a Singapore company, and relocate to the country, also adds to the rise in rental figures.

Asiabiz Services specialises in Singapore company incorporation and the application of Employment Passes or EntrePasses for foreign individuals and companies.

“We get a large number of foreign businessmen looking to incorporate a company in Singapore and wanting to move here to run their operations because the quality of living is very good. Plus, more international companies are also setting up a presence in Singapore and bringing in more foreign talent, who will require accommodations,” said Mr Nuben.

“Business have started to relocate to Singapore and are bringing in a lot of foreign workers, which have increased demand for residential housing, as compared to the first half of last year, when companies were shedding staff,” confirmed Donald Han, managing director of Cushman and Wakefield.

However, Mr Colin Tan, head of research and consultancy at Chesterton Suntec International thinks otherwise – that the rental hikes are due to a sharp drop in housing supply. The number of demolitions conducted in the fourth quarter last year saw 1,441 units torn down compared to the 1,400 units available.

Mr Tan said that this is because there were more collective sales, resulting in more units disappearing. The demolitions caused a drop in the number of units – only 1,407 units, available for rent for the first quarter.

“The higher number of demolitions is probably a one-off effect. The numbers of demolished units returned to about 400 units-odd in the first quarter of this year. Rentals will increase as there are fewer units available and there is a high demand for them,” added Mr Tan.

On a brighter note, Mr Tan said he expects the rental hikes to stop climbing in the next few months.

However, Mr Han said Singapore’s economic growth will bolster rental prices, marking an increase of 5 per cent to 8 per cent by the end of the year. This increment makes it a good time for homeowners who want to lease out their properties to guard against volatile markets and inflation.

“Yields have risen slightly to 3 per cent to 3.8 per cent and are likely to go up over 4 per cent at the end of the year. With the low interest rate of 1 per cent to 1.2 per cent, this is a good time for residential yields,” said Mr Han.

The Infocomm Development Authority of Singapore (IDA) added that it has plans to invest S$1.1 billion in about 350 ICT tenders for this financial year (FY) which ends on 31 March 2011.

IDC senior market analyst Gerald Wang said this increase in spending is certainly good news for the industry.

Mr Wang said that he expects 50 per cent of the new tenders released in 2010 to multiply business opportunities for a wide range of vendors, as these small projects are less than S$500,000 each.

Mr James Nuben of Asiabiz Services says that the number of foreign individuals incorporating a Singapore company to run ICT-focused businesses such as building and releasing online micro-transaction games for social networks, or provide cloud-computing services, has also been steadily increasing.

“The growth potential for foreign investors setting up companies to expand the ICT industry is very huge and Singapore is a great place to incorporate a company because it provides a very safe environment for businesses to grow,” said Mr Nuben.

Asiabiz Services specialises in Singapore company formation and staff relocation services, including work visa applications for foreigners.

Even though the Government appears to be spending less by awarding S$1.6 billion and S$1.12 billion worth of ICT contracts in FY2008 and FY2009 respectively, the figures do not reflect the actual increment.

Instead, the figures appear to drop because they included huge one-time projects that include the Standard ICT Operating Environment (SOEasy) and the Next-Generation National Broadband Network (NGNBN). The regular ICT expenditure has actually been increasing consistently when the huge projects are not included in the spending numbers.

“After deducting the NGNBN project’s sum of S$250,000, the S$1.1 billion projected spending for this year is significantly more than last year’s S$870 million. I expect future government projects in Singapore to focus on building upon what has already been built before,” said Mr Wang.

ICT spending with a focus on cloud computing, social networking, business analytics and technology will help the Government strengthen their collaboration with citizens and reach out to citizens.

“Proposals that will allow the government agencies to reduce huge upfront capital expenditures and manage operational expenses will be the most well-received,” said Mr Wang.

Deputy Prime Minister Wong Kan Seng said the Government has recently reviewed its immigration policies and will refine the criteria for approving PR applications ‘to better manage the pace and overall numbers’.

“We will ensure that those who become one of us are of better quality, and not only contribute to Singapore economically but also integrate well into our society,” said Mr Wong, who is also the Home Affairs Minister, when responding to concerns aired by MPs during the three-day debate on the Budget Statement in Parliament.

As for the number of new citizens, he said this will depend on the quality of the applications. But if there are good applicants, the Government would take in up to 20,000 a year, he said.

Last year, a total of 59,500 PRs and 19,900 citizenships were granted, compared with 79,200 and 20,500 respectively in 2008.

While measures to reduce the number are in place, Mr Wong said he is ‘not in favour of any absolute cap on the number of PRs’. Explaining, he said: “How many we take depends on the quality of the applicants, and there may be events which trigger an unexpected surge in numbers, which we should take advantage of.”

Mr Wong also said that the Government ‘will not condone discrimination against Singaporeans’, but it ‘cannot ring-fence jobs and reserve them only for Singaporeans’. He reasoned that ‘if we want to compete globally, we have to create an environment which can attract the best people’.

“If foreigners are not here to help us compete against other countries, they will be working in other countries to compete against us. The future will see global competition becoming more and not less intense,” he warned.

Acknowledging Singaporeans’ concerns and sentiments on what he described as a ‘highly complex’ subject, he said: “Indeed, in the last few years, we have seen a dramatic increase in the number of foreigners in Singapore. It is understandable that Singaporeans may feel uncomfortable over the sheer number of foreigners in our midst. The Government has taken note of this.”

He also said the Government will take steps to moderate the inflow of foreign workforce over time, even as he conceded that the change ‘will not be easy’.

Source: Singapore Strait times
by Melissa Pang

According to a study conducted by Singapore Management University, close to one quarter of Singapore listed companies have the same set of directors sitting on three board committees of 500 companies ,442 have all 3 committees leaving 11.6 % firms who do not comply with the recommendation of Singapore Code of Corporate Governance requiring 3 board committees to focus on specific issues. The committees are the Audit Committee ( AC) Remuneration Committee ( RC) and Nominating Committee( NC).

The study shows that 442 companies have all three committees in place. However there are 105 companies or 23.8 per cent with the same set of directors for all three board committees. The majority of these firms fall on the lower bands of market cap, so that smaller companies are likely to rely on the exact same set of directors for AC, RC and NC duties.

Having the same set of directors sitting in all three recommended committees ‘appears to be against the spirit of corporate governance therefore defeating the advantages of having board committees’ ,a discovery made by authors Themin Suwardy and Leong Kwong Sin, who are associate professors at the SMU’s school of accountancy. One school of thought is that the three committees in these 105 companies are, in fact, just one committee.

The study showed that 47.5 per cent sit on all three committees and 25.3 per cent sit on two committees. With almost half of these directors sitting on all three committees, Dr Suwardy and Dr Leong questioned their ability to contribute diligently to all three committees also raised the issue of whether a conflict of interest could arise.

For instance, the author asked “How would the RC members decide on the appropriate fees for NC members, who in turn assess the performance of AC members, if they are all the same set of directors in the three committees?”.

An analogy was drawn by the authors that the same directors appear to play musical chairs by occasionally swapping chairmanships of the three committees.

The study, brings to light that 45.2 per cent of the committee members chair one committee and 44.3 per cent do not chair any committee. Slightly over 10 per cent of these committee directors chair two or three committees. And, the ‘triple chairs’ – directors who chair all three board committees – can be found in 11 companies.

On the other hand, there are only eight companies that have three different directors chairing the three committees and the least number of directors in multiple committees.

One lawyer remarked that it could cause an inherent tension between the NC and RC if they have the same set of directors, likened to a case of “you scratch my back and I scratch your back” Stamford Law director Ng Joo Khin, states it would not be a problem for committees to have repeated members on different committees as long as they recognize the different roles and functions.

The bigger problem, he believes, arises when directors sits on multiple boards questioning whether they have adequate time to discharge their roles and responsibilities. ‘There is a risk of conflict of interest when directors sit on board of companies within the same industry.

David Smith, head of Asia corporate governance research at Risk Metrics Group, pointed out sitting on board committees would result in significantly greater workload for these directors.

Asiabiz is the leading authority in company formation in Singapore. We can help you incorporate your company with ACRA in less than 3 hours. We can also assist you in obtaining the required licenses and permits. Asiabiz also provides Nominee Director services. To learn more about our Incorporation Services please go to Singapore Company Incorporation Services.

• The amount of income tax that you have to pay depends on your tax residency in Singapore.
• Top marginal resident tax rate of 20% kicks in at S$320,000 of taxable income.  Non-residents are taxed at the flat rate of 15% or the resident rates whichever results in a higher tax amount.
• Income is assessed on a preceding calendar year basis, ending 31 December. You must File Your Annual Tax Form by 15 April of the following year. You can usually expect to receive the income tax bills from May to August.
• Besides salaries and bonuses, perquisites such as housing and stock options will form part of your taxable employment income.
• Overseas income derived outside Singapore, Singapore dividends and bank interests are tax exempt in Singapore.

Paying your taxes: Sign up for the 12-month interests free GIRO Deduction Plan to pay your income tax
by installments. Otherwise, full payment has to be made within one month from the date of the income tax bill.

Are you a Tax resident or non-resident?

Different tax rates apply for tax residents and non-residents. You will be treated as a tax resident for a
particular Year of Assessment (YA) if you are a:

• Singaporean; or
• Singapore Permanent Resident (SPR) if you have established your permanent home in Singapore; or
• Foreigner who stayed/worked in Singapore for 183 days or more in previous year (excludes director of a company).

Otherwise, you will be treated as a non-resident for a particular YA for Singapore tax purposes.

Tax rates for non-resident individuals

• Employment income
  Your employment income is taxed at 15% or resident rate, whichever gives rise to a higher tax amount.
• Director’s fees, consultation fees & all other income
  The director’s fees, consultation fees and all other income that you received will be taxed at 20%.

If you are leaving Singapore or changing job

If you are about to leave Singapore or changing to another job within Singapore, your current employer
needs to notify IRAS and ensure that you settle all your taxes before you go. This process is known as tax
clearance. If you have any existing stock options or awards on hand which have yet to be exercised or vested,
you will be deemed to have derived gains from the stock or awards at the point of tax clearance.

Tax rates for resident individuals

For YA 2008 and 2009, a personal income tax rebate of 20%, up to a maximum of $2,000 is granted.

Ways to save tax

• Tax residents are eligible for tax reliefs that can be offset against the assessable income. You can get reliefs for wife support, child maintenance etc. Conditions apply.
• You may claim expenses incurred against your employment income; enjoy tax deductions for approved charitable donations. Conditions apply.
• Under the Not Ordinarily Resident (NOR) Scheme, you can enjoy either Time Apportionment of Singapore employment income or Tax Exemption of Employer’s contributions to Overseas Pension Fund, or both. Conditions apply.
• If you work for a foreign employer and need to travel overseas in the course of work, you may enjoy time apportionment of employment income under the Area Representative Scheme. Conditions apply.
• With the Avoidance of Double Taxation Treaties signed by Singapore, your income may not be taxed twice in Singapore and your home country. Conditions apply.

Need help on your Tax assessment and submission?

Asiabiz Services can assist you in your personal income tax filings. Our personal tax filing services include:

• Registration for new tax payers
• Preparation and filing of income tax return based on your income and determination of possible deductions and reliefs that are applicable to you
• Request for extension of deadline, if necessary
• Preparation of Form IR8A for employees
• Tax planning and tax advice

If you would like us to assist you with your personal income tax return, please contact us at +65-63034600 to discuss your requirement in detail or send us an email at ptax@asiabizservices.com and we will get back to you.