Frequently Asked Questions
Have a burning question? Take a look at our frequently asked questions to find an answer to your question.
When you decide to engage our services, we will discuss and finalise the appropriate company structure your enterprise needs. There are generally five main corporate structures you can register for:
- Sole proprietorship
- Limited Partnership (LP)
- Limited Liability Partnership (LLP)
- Private Company Limited by Shares (Pte Ltd)
While Pte Ltd remains the most popular business structure to adopt in Singapore, given its flexibility and limited liability nature, not all businesses fit this mould. As experts in company incorporation, we are able to provide accurate and incisive advice. Some key considerations we will need to discuss include the amount of capital investment, long-term business plan and the number of business owners you have.
There are three incorporation options for foreign companies, with varying regulatory requirements such as tax and compliance codes:
4. Subsidiary company
5. Representative office
6. Branch office
Depending on the nature of your business, foreign-local ownership status, and corporate requirements, the Ares Strategy can advise on the most appropriate business entity.
After the registration and incorporation of your company, you need to appoint a company secretary within six months. Corporate secretaries protect your business by ensuring all relevant statutory obligations are met, enabling good corporate governance and providing comprehensive administrative support. These include:
- Preparing and filing relevant forms with ACRA, IRAS and other relevant agencies;
- Filing annual confirmation statements;
- Tracking regulatory changes that may affect your company’s standing;
- Maintaining and updating board and shareholder meeting documents;
- Maintaining and updating statutory registers
Accounting and bookkeeping are essential functions of all, if not most, companies. According to the Inland Revenue Authority of Singapore (IRAS), companies that fail to file their financial statements and taxes on time are subject to financial penalties and legal consequences. Organising and keeping accurate records of your financial transactions will thus help you meet your statutory obligations. Accounting and bookkeeping provide you with further insight into your company’s financial performance, allowing you to make informed business decisions.
Not all companies need to file audited accounts. Your company does not need to file audited accounts if (i) your sales turnover is not more than S$5 million, (ii) you have no more than 20 shareholders, and (iii) there was no corporate shareholder at any time during the financial year.
A dormant company is also exempted from filing audited accounts if (i) it fulfils the substantial assets test and (ii) has been dormant since its formation or since the end of the previous financial year. The rationale behind this exemption is to lower regulatory costs for dormant companies with lower public impact.
In both cases, your company can simply file an unaudited report (otherwise known as a directors’ report).
Outsourcing accounting to Ares Strategy allows you to concentrate on your core business by freeing up valuable time and resources. Years of experience in the industry have conditioned us to set high standards for our work. We compile your financial statements systematically and efficiently so that they can be submitted punctually and error-free. In addition, we are well-versed in the statutory regulations governing financial reporting and can help ensure that your financial statements are compliant with them.
Beyond making accounting more manageable for you, Ares Strategy aims to implement effective processes and systems that transform your company for the better. We use the latest business software and technologies to improve your work productivity and data security. These tools enable us to prepare financial statements of consistently high quality and convey useful insights about your company. Such insights are vital in helping you make informed decisions relating to expansion and investment for instance.
Goods and Service Tax (GST) is a broad-based value added tax on the import of goods as well as most domestic goods and services. Currently, the GST rate in Singapore stands at 7%. It is compulsory to register for GST if your company’s taxable turnover is:
- Under the retrospective view, more than $1 million at the end of the calendar year, or
- Under the prospective view, expected to be more than $1 million in the next 12 months
You will also need to register for GST under the reverse charge regime if:
- Your business obtains services from foreign suppliers and your business is not eligible for full input tax credit even if it is GST-registered (reverse charge regime) or
- You are a foreign supplier or a local/ overseas electronic marketplace operator that supplies digital services to non-GST registered individuals and businesses in Singapore (overseas vendor registration regime).
To file your corporate income tax return, you need to file 2 separate submissions. These are (i) Estimated Chargeable Income (ECI) and (ii) Form C or Form C-S.
The ECI needs to be filed by companies within 3 months from the end of their financial year. Form C or Form C-S needs to be filed by 30 November of the Year of Assessment (YA). For YA 2021, the deadline is 30 November 2021.
According to the Inland Revenue Authority of Singapore (IRAS) tax deductible expenses are those ‘wholly and exclusively incurred in the production of income’. Expenses are deductible if they fulfill all of the following criteria:
- Are incurred solely to generate income.
- Are not a contingent liability, i.e. independent of the occurrence of a future event. In other words, expenses must be incurred. Expenses are ‘incurred’ when the legal obligation to pay them arises, regardless of the date of actual payment of the money.
- Are revenue, and not capital, in nature.
- Are deductible under the Income Tax Act.
HR & Admin
Ares Strategy helps clarify the eligibility criteria for Employment Pass (EP) applications. Here is a breakdown of the major considerations which Ares Strategy can elaborate in detail during a consultation:
1. Qualifying Salary Benchmark: This benchmark has been raised over the years to adjust for inflation and to control the inflow of skilled foreign labour into the local job market. These benchmarks also vary depending on the seniority, age and experience of the applicant.
2. Valid Job Offer: Employment Passes can only be approved for foreigners with a valid job offer in Singapore. This means that a local employer must have provided a letter of appointment or letter of offer to this applicant.
3. Skilled Professional Background: Applicants must have a recognised diploma or degree qualification in the related field, as well as relevant work experience to justify the job offer and salary.
In Singapore, payroll management is subjected to the regulations under the Employment Act. These regulations address working hours, remuneration package and Central Provident Fund (CPF) contributions among other considerations. Monthly CPF contributions are to be made by both employers and employees, but rates vary depending on the employee’s age and duration of permanent residency in Singapore. Employers are also expected to pay a Skills Development Levy (SDL) monthly.
Tapping into the expertise of Ares Strategy’s HR administrators presents a win-win situation for both you and your employees. We keep your HR processes organised and efficient to save your company precious time and resources. We implement your company’s HR policies and report on their effectiveness while proposing areas for improvement.
Selling a business requires deep knowledge of the small business landscape. Without a comprehensive understanding of the steps involved, business owners may end up selling for less than the fair market value. Our business brokers are well-versed in all facets of small business brokerage, including analysis, financial assessment, marketing, selling and closing transactions.
There are several steps involved in selling your business successfully and Ares Strategy can assist you in each of them. The first step is valuation which determines how much your business is worth. Business brokers then help prepare a marketing strategy that will attract potential buyers and set about sourcing them from an extensive network. The business broker also conducts due diligence on the buyer to determine if they are a good fit for your business and negotiate on your behalf to secure a favourable outcome.
There are many legal scenarios in which a forensic accountant’s expertise can be useful. Each forensic investigation is unique. A forensic accountant’s expertise is needed when investigating fraud, money laundering and other forms of financial misconduct that requires a close examination of timelines and detailed analysis of transactions. A forensic accountant’s skills may also be needed when quantifying economic damages in contract disputes, product liability claims or trademark infringements.
SMEs can apply for a Working Capital Loan through the Enterprise Financing Scheme.
In order to qualify for the SME Working Capital Loan, your company must:l Loan, your company needs to have:
- At least 2 years of incorporation in Singapore
- A minimum 30% Singaporean/PR shareholding
- A group annual sales figure of no more than $100 million, or a group employment size of no more than 200 people
All participating financial institutions use the same eligibility criteria.
Interest rates range from 1% to 5%, with a maximum repayment period of five years. The rate of interest is set by participating financial firms (such as OCBC, DBS, UOB, and more) based on the risk and credit assessment of your company. Since the government shares more risk, the interest costs are low despite the loan being collateral-free.
Unsure about the financing options available to your company? Ares Strategy’s loan advisors will be happy to assist you with your company’s loan application.
SME Working Capital Loans can be used to cover short-term operational costs, such as payroll, rentals, bills, and daily expenses. Additionally, the loan can be used for expansion purposes.
Since the SME Working Capital Loan is a short-term loan, it cannot be used for the purchase of long-term assets.