Singapore has one of the top-ranking countries in World Bank’s rankings as the best place to do business, which should come as no surprise, as one of Singapore’s main ambitions is to become the key financial services hub in the Asia Pacific region.
Singapore Corporate Banking
What Banks Can I Choose From in Singapore?
Currently, there are 200 commercial banks in Singapore, 4% of which are local banks while the remaining 96% are foreign banks . Ideally, if you are situated overseas, or the headquarters of your company is situated overseas, it would make sense to approach the bank that your company is already working closely with. However, certain foreign banks may only offer limited bank facilities and services in Singapore, so it may be a good idea to consider a local bank as well.
Naturally, to grant your local employees easy access to bank facilities such as commercial corporate cards, debit cards or internet banking services, local banks would be the ideal choice, as they have ATMs and branches all over the island. Moreover, the credit facilities of local banks are widely accepted at various merchants.
There are five local banks in Singapore, namely:
- Oversea-Chinese Banking Corporation Limited (otherwise known as OCBC)
- Bank of Singapore (part of OCBC)
- DBS Bank Limited (merged with POSB, known as DBS)
- Far Eastern Bank Limited
- United Overseas Bank (otherwise known as UOB)
Of the five, DBS, OCBC and UOB have the strongest local presence and provide corporate banking facilities. Local banks may also be able to react more quickly to your needs, as they have larger offices and more employees in Singapore.
However, if you are situated overseas where there is a significant time difference from Singapore, you may need to check if your chosen bank offers round-the-clock service, so that you can contact the bank at your convenience.
It should be noted that not all foreign banks in Singapore are full service banks, i.e. there may be restrictions in terms of the financial services that they can offer as permitted by the Banking Act. Foreign banks are also restricted in terms of the number of branches and ATMs that they can have in Singapore.
In the event that you have no preference regarding which bank your company wishes to open a corporate bank account with, do consult a professional corporate service firm, who should have contacts with local bank officers and can easily assist you in the process of completing all the necessary paperwork and arrange for a bank officer to personally assist you with the opening of a corporate bank account.
Is it Easy to Open a Corporate Bank Account?
While it is extremely easy to incorporate and get your business up and running in Singapore (the World Bank study found that it takes an entrepreneur just two and a half days to open a business in Singapore), the enhanced measures recommended by the Financial Action Task Force (“FATF”) with regards to improving the transparency of ownership of legal persons and arrangements has resulted in banks and financial institutions tightening their controls and increasing the amount of paperwork required before bank accounts can be opened.
Given that a corporate bank account is registered in a company’s name and not that of its ultimate beneficial owner (“UBO”), banks now require the company to reveal its UBO and will perform due diligence on the UBO as well. As Singapore is a member of FATF, financial institutions in Singapore are obliged to pay special attention to persons and companies from the named jurisdictions as published by FATF in its quarterly public statements. In its latest public statement dated 24 October 2014, FATF identified the following high-risk and non-cooperative jurisdictions:
- Democratic People’s Republic of Korea (DPRK)
Hence, if the UBO or the holding company of the company incorporated in Singapore is situated in these jurisdictions, there may be additional procedures and documentation required by the banks when an application is made to open a corporate bank account in Singapore.
What are the Singapore Bank Account Opening Requirements
For most banks, the basic documentation required to open a bank account would comprise the following:
- Application Form
- Directors’ Resolution in Writing to approve the Opening of the Bank Account and its Certified Extract
- Certified True Copy of the Certificate Confirming Incorporation of Company (“Certificate”)
- Certified True Copy of the Official Company Register (known also as the Business Profile) to evidence the current directors and its shareholders
- Certified True Copy of the Company’s Memorandum and Articles of Association
- NRIC / Passport Copies of the proposed bank signatories
- Minimum Deposit
All of the above mentioned items, with the exception of the Application Form and minimum deposit, can usually be prepared by your company’s corporate secretarial agent.
With regards to the Certificate, Business Profile and Memorandum and Articles of Association, banks will typically accept the Company Secretary’s certification, as the Company Secretary is widely recognised as the official keeper of the Company’s statutory records.
Do note that most banks may need to sight the original signatures of the proposed bank signatories. If the proposed bank signatories reside overseas, banks will usually accept it if the proposed signatory goes to their overseas branch to get their signature sighted and certified, particularly if the company or its related companies have an existing relationship with the bank.
What Fees are required in Setting up a Bank Account?
Typically, a bank would charge a bank opening fee, which is usually subject to the nature of the company’s principal activities and anticipated volume of transactions within a prescribed period. Generally, local banks have a very low set up fee or may not even charge at all for the opening of an account.
Additional fees may apply for extra services, such as internet banking or multi-currency pooling. An initial deposit and minimum deposit is also required, which is important information for the company as banks reserve the right to charge their customers a recurring fee for not meeting this requirement; and may even close the account. Comparatively, local banks require a lower initial deposit than foreign banks.
As banks do change their fees and types of services from time to time, it is strongly recommended that you approach several banks to establish what their current policies are. Local banks are usually more active and aggressive in terms of promoting their services and have more facilities available to their customers, such as internet banking facilities and tailored iPhone and Android apps. Moreover, for local banks, bank transfers between Singapore bank accounts, whether in the same bank or with other local banks, is usually executed without any bank charges and within one to three business days. Hence, if you anticipate that there will be frequent bank transfers with local merchants; do consider opening a corporate bank account with a local bank.
Certainly, one of the most attractive features of setting up a corporate bank account in Singapore is our stunningly low corporate tax rate of 17 per cent, which is significantly lower than the corporate tax rates of Europe and the United States . Hence, many multinational corporations do enjoy the benefits of low corporate tax rates when they choose to base their regional operations in Singapore.
How long does it take to open a Bank Account in Singapore?
Understandably, the length of time to process and open a bank account depends on a variety of factors, the most important being whether all requisite documents have been submitted alongside with your application. It is always wise to consult a professional corporate service firm, who would have experience in opening bank accounts for a large number of clients.
Moreover, letting your appointed company secretary know ahead of time that your company wishes to open a bank account allows sufficient time for your company secretary to assist you in preparing the necessary documents, such as the Directors’ Resolutions in Writing to approve the account opening and the Certified Extract. Usually, if all requisite documentation is furnished to the bank and the bank has no further queries or requests for additional information, a corporate bank account can be opened within the week.
Given that professional corporate service firms frequently open bank accounts for their clients, they usually also have established networks with a variety of banks. Particularly in the event where opening a bank account may be urgent, having a bank contact that you can liaise with may help expedite the process. Of course, do take into account that if the UBO of the company or its related companies are in the jurisdictions highlighted by the FATF; or if the proposed bank signatories are situated overseas, there may be additional time required by the bank to review and approve the bank account application.
Related Reading » Singapore Company Incorporation Guide
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