Banking and Taxation:
Financial Services and Taxes in Singapore
Introduction With its strategic location and well-developed infrastructure, Singapore is a center for trade and financial services for the region with currently 117 commercial banks in Singapore . There are no restrictions for individuals and corporations to import capital, move funds or repatriate profits. Financial services are a key source of growth since the 1970s and the government constantly provides incentives for its development.
Banks in Singapore included three types of commercial banks: full license, restricted, and offshore banks. Only 27 of all banks in Singapore offer a retail banking service and you need to choose wisely before opening an account with a bank in Singapore.
We suggest you contact our anchor partner for financial services, which is Citiank International Personal Bank Singapore. Citibank offers Global Executive Banking - a complete banking service by multi-lingual Relationship Managers designed with the financial needs of expatriates and global executives in mind. For further information visit here.
On Arrival There are no exchange restrictions in Singapore and you may bring in or take out any amount in any currency. The Singapore Dollar is divided into 100 cents with denominations ranging from S$1 to S$1000 and coins from 1 cent to 1 dollar. All major credit cards are accepted in Singapore. Currency may be exchanged in the baggage hall at the airport and in the arrivals lounge.
ATM's are available at a number of locations on the landside but may be difficult to find. Ask at the information desk for the nearest one available.
ATM's also accept debit cards but check with your bank before you leave home that your card is valid overseas. ATM's are often the cheapest ways of "purchasing" foreign currency. There are numerous licensed moneychangers around the city and these tend to offer a slightly better exchange rate than the banks.
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Making Payments The main method of payment in Singapore is by using cash or debit cards (know as NETS or network cards).
Credit cards have become much more popular over the last couple of years and are widely accepted Cash cards are stored value cards where you pay in advance by topping them up with ten, twenty or fifty dollars. Although these are less popular than the debit cards they are essential as they are the only way of paying ERP charges (road tolls) and to make payments in the library and most government offices.
Cheques are less popular, particularly as they are charged for. Most corporations prefer to receive payment electronically or by GIRO. Checks are typically used to pay small traders such as the air conditioning contractor and for courses.
Opening a Bank Account 
Get a reference from your company or home country banker to speed up the process! Call your contact person before the appointment and ask what documents you have to bring.
Although Singapore is a major financial hub not all banks are licensed to offer a retail service. Before you open up a bank account in Singapore you need to be aware of the status of a bank and whether it can offer the services you require. There are currently 117 commercial banks but only 27 offer a retail banking service. Even within this sector there are sub-divisions and different levels of service.
 With attractive financial rewards and ample opportunities for advancement, working in Singapore offers a promising and exciting career in a vibrant and cosmopolitan environment. We can help you settle down with ease with Global Executive Banking – A complete banking service designed with the financial needs of expatriates and global executives. |
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The following local banks offer a full banking service including current and deposit accounts, ATM's, credit and debit cards, loans, mortgages etc.
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These banks have the most extensive branch network. DBS owns POSB and therefore customers may use either bank's ATM's. OCBC and UOB operate a shared ATM system and therefore clients of both banks may use either bank's ATM machines.
Foreign Full Banks 
Photo:enterAsiaArt
The banks in the website table below are permitted to have up to 10 branches and a further 5 off-premise ATM sites. They may provide current and savings accounts, credit and debit cards, mortgages, offer Supplementary Retirement Scheme and CPF Investment Scheme accounts, and accept fixed deposits under the CPF Investment Scheme and Minimum Sum Scheme.
Not all of the banks actually offer these services and there is a significant variation in the type and number of facilities provided.For instance, BNP Paribas do not offer a consumer banking service in Singapore.
Although some of these banks offer debit cards most are not members of NETS. They are limited in the number of ATM sites they may offer. HSBC, Maybank and Standard Chartered operate a shared ATM system covering 55 locations and clients of one bank may use any of the ATM's of the three participants. Inquire about the most recent changes in their license when opening an account.
For the large number of Citibank ATM locations see their website here
or visit their branches listed below.
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Foreign Full Banks Restricted Although these banks are also designated as "Full Banks" there are considerable restrictions on what services they can offer. All are limited to one location and do not offer a full consumer banking service in Singapore.
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Wholesale Banks Wholesale banks (previously known as restricted banks) may engage in the same range of banking business as full licence banks, except that they may not:
Operate savings accounts Accept fixed deposits of less than S$250,000/- per deposit Are not permitted to operate sub-branches What You Need To Ask Your Banker | Info: | ||
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Passwords/Codes You need to prepare a number of passwords/codes for different cards and Pins, telephone and Internet banking etc. Think about a few easy to remember codes, which you need to write down and keep in a safe place. Send a registered letter with all codes to your trustee at home for emergency cases. Alternatively send a diskette or VCD with a codeword.
Financial Services The Monetary Authority of Singapore sounds the alert on firms offering financial services without having a proper license. The web site below features advise on how to spot an investment scam and an "investor alert list" of financial services firms that do not have the proper license but operate from Singapore through virtual offices.
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Joint Accounts It is highly advisable to open joint accounts or grant authority to your partner. Expatriates in Singapore often work regionally and are away from home for a number of weeks. This authority allows the partner to operate and even close the account in case of an emergency.
Online Money Transfer/Remittance Centers Transferring money overseas has always been a headache for expatriates and involved substantial cost. With Internet Banking fairly established amongst expatriates, some banks in Singapore started offering Internet fund transfers which cost about S$ 10-15 per transfer compared to S$ 20-100 for normal telegraphic transfers. Charges vary significantly from one bank to another. The minimum balance required to avoid charges can be quite high.
Citibank launched Citibank Global Transfer (CGT), to allow customers to send funds of up to S$20,000 on a real time basis to other Citibank accounts in many countries across the world. Costs are a very reasonable SGD 10. View here for more details.
Alternatively non-bank-remittance agents may offer lower rates and are an alternative for those not having a Citibank account. Check if the exchange rate is calculated at the point of remittance or calculated on the day of receipt. The first option reduces exchange rate risks. Completion of the remittance can take anything from 15 minutes to 5 working days. POSB sends money right to the doorstep of the recipient which will him/her save the trip to the bank.
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Overdrafts With some banks, it is the practice to only grant 'overdraft facilities' if you have deposited the same amount of money in the bank. If you used any money from this 'overdraft' the bank still deducts interest rates! Banks sometimes operate overdraft facilities as a separate account with its own cheque book and charges. e.g. DBS Cashline
Credit Card Application American Express, Diners, Master Card and Visa are common in Singapore. You need an employment pass valid for at least 12 months and an annual salary of at least S$ 30,000 (VISA) and $ 48,000 for a Gold Card to be confirmed by a letter of your employer or a copy of your last Singapore tax assessment. Inquire about the time for the procedure. Some banks offer online card applications.
A large number of affinity cards are now available ranging from a "ladies only" card to ones that will earn frequent flyer miles. Check each banks web site for details of the range of cards they offer.
Singapore card issuers will shortly start to share credit records so that they can assess how many other cards an applicant has before issuing a new card or deciding on a credit limit.
Note: Banks in Singapore at present do not need to disclose processing fees and how they calculate exchange rates on overseas purchases when you use your credit card. This is particularly interesting when you buy online.
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NETS/ATM/Cash Cards
Debit cards
NETS cards (named after the processing company) are issued by the Singaporean banks and Standard Chartered Bank and are linked to your current or saving account for automatic debiting. NETS cards double as ATM cards and you are able to withdraw cash up to between S$ 2,000 and S$ 3,000 at over 1700 ATMS machines on the island. The NETS cards are the most commonly used cards in Singapore. The card has a five-year validity period and needs to be replaced prior to expiry. Check your expiry date:
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Stored value cards
Cash Cards are prepaid debit cards issued by NETS and can be purchased from7-Eleven Stores, service stations and local banks.
Cash Cards are the most commonly accepted cash less payment method in Singapore for low value retail purchases, traffic tolls for the Electronic Road Pricing System (ERP) shops, parking fees, and government offices.
They can be topped up using a NETS card or via the Internet. BP service stations and 7 Eleven outlets will top them up for cash.
Photo:enterAsiaArt
The ez-link Card used for travel on buses and the MRT is also a stored value card and can be topped up using your NETS card. Some retailers are beginning to accept ez-link cards for transactions.
Some banks issue combined NETS and Cash Card.
e-NETS options
NETS offers a suite of electronic payment services for Internet and mobile transactions for you to choose:
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Mobile Payment Schemes The latest system to pay for your shopping and services like buying a movie ticket or settling your parking fees uses your mobile phone to double as a sort of electronic wallet. So far four operators have started operation in Singapore. Each of them partners different retailers and this complicates the procedure as for the time being you have to sign up with all of them to be able to pay per mobile phone all over Singapore. Signing up procedures differ from operator to operator but users will either get a personal identification number or a password to make transactions secure.
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Peer-to-Peer (P2P) e-Payment System Peer-to-Peer payment systems operating over the internet are being introduced. Payments are made online and all the payee and recipient need is a name, an email address and an e-banking account or a credit card. Check on you bank's web site whether they feature a P2P option. The payee needs to key in the name and the email address of the recipient. The recipient and payee will be notified via email of the transaction, which will be processed within one day.
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Post Office Saving Bank (POSB) Although the POSB has been taken over by DBS Bank it will continue to maintain a separate branch network using the POSB brand. With its many branches POSB is a cost saving alternative with the additional advantage of tax-free interest on deposits up to S$ 100,000. However, as the minimum balance required to avoid charges is lower than other banks it is popular and there are often long queues at their counters.
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Finance Companies For higher interest rates on deposits and hire purchase financing refer to one of the eleven finance companies in Singapore.
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Bill Consolidator View all your bills in one location. Settle on line using a variety of payment methods.
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Writing a Cheque For safety reasons, cheques should always be crossed by drawing two diagonal parallel lines on the upper left corner of the cheque. For extra safety you can write or stamp, "account payee only" between those two lines. Then the cheque can only be paid into the account of the payee stated. Cross out the words "or bearer" to ensure, that only the payee stated can deposit the cheque. Sometimes you are asked not cross the cheque enabling the bearer to cash it at any bank.
Always write the amount in words followed by the word "only" to ensure that no other words can be added. The numbers must be identical with the words. Corrections must have a full signature against them. Initials are not accepted.
The date is written as day/month/year.
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Income Tax Taxes need to be paid on any income that is accrued in or derived from Singapore.
First you need to check if you are:
a Singapore tax residents who has worked in Singapore more than 183 days of the tax assessment year a NOR taxpayer who works in Singapore but spends more than 90 days a year outside Singapore on business a taxable non resident who has worked in Singapore less than 183 days and needs to pay a flat rate of 15% Non Resident Tax Payer
Tax rate for employment income for non-resident individuals is 15% or resident rates, whichever gives rise to higher tax. If an employment period or combined periods do not exceed 60 days in the calendar year of assessment no taxes have to be paid locally. You need to pay taxes in Singapore as soon as you work more than sixty days. There is a flat rate of 15 percent for employment periods between 60 and 183 days in one or more periods within one calendar year.
Resident Tax Payer
Be aware of the 183 days rule, stating the time you need to be physically present preceding the year of tax assessment in Singapore to qualify as a Resident Tax Payer for income tax in Singapore. Income tax is paid for income derived from and accrued in Singapore but not for income derived from outside Singapore and received in Singapore.
Please note that Benefits in Kind (BIK) like housing, leave passage and car benefits are taxable at nominal rates. BIK like school fees, utilities and residential phone bills are taxable on the actual amount paid by the employer.
You may deduct Personal Relief such as for your non working wife, delivery expenses for a fourth child, your children and children studying abroad, contributions to Retirement Schemes and Life Insurance and others. Please consult your tax adviser.
| Tax Info 2007 - Resident Rates | |
| Chargeable Income in SGD on the first | Tax Rate % |
| 0- 20,000 | 0 |
| 20,001 - 39,000 | 3.5 |
| 30,001 - 40,000 | 5.5 |
| 40,001 - 80,000 | 8.5 |
| 80.001 - 160,000 | 14 |
| 160,001 - 320,000 | 17 |
| more than 320,000 | 20 |
We strongly recommend that experts should handle the many exemptions and provisions offered to the various nationalities such as bilateral double taxation agreements. For more information about Singapore's Tax Treaties visit the web site of the Inland Revenue Authority of Singapore section on "Taxation of Foreigners". View info on tax tax allowances
Working Spouses
Married partners can choose to be assessed separately which is more beneficial if the wife's annual income exceeded $2,000. The husband can claim Spouse Relief on the difference between $2,000 and the wife's total income. Both are entitled to tax relief and rebates. Under certain preconditions regarding her higher educational qualification a married women can claim tax relief on her income for children below 12 years old. A married/divorced woman may also claim Foreign Maid Levy restricted to one maid of twice the amount of levy paid.
NOR Tax Payer
Executives based in Singapore who travel frequently need not pay taxes for the period they have been outside the Republic. To be classified as "Not Ordinarily Resident (NOR) taxpayer you must have spent 90 days s or more doing business outside the country in the year before the assessment year. You will also be exempted from paying tax on income earned before coming to Singapore. The NOR treatment will be extended for five years and you may qualify for this concession if you commenced employment in Singapore after July, 2, 1997.
Taxes are subject to a minimum of 10% on time apportionment.
Year of Assessment
Tax computations are done in arrears based on the previous year's tax status. This means that year of assessment is the following year.The tax returns must be filed with the Inland Revenue Authority of Singapore (IRAS) by the 15 April of the year of assessment e.g. 15 April 2003 for the basis period 1 January to 31 December 2002.
Consequently, as expatriate you usually only start paying taxes in arrears approximate. 18 months after commencing work in Singapore. After submission of the tax returns the IRAS will issue a Notice of Original Assessment which may be followed by a Notice of Additional Assessment once the IRAS has finalized the computation which may initially have been submitted by your tax consultant.
Your tax liability will be stated in one lump sum payable. You can apply to discharge your tax liability by installments during the year until the next computation. This is usually granted.
The catch to this convenient tax payment delay is that if you intend to leave the country for good your last annual tax liability becomes due immediately and you need to obtain a stamp in your passport from IRAS confirming tax clearance. It is, therefore, advisable to in time create a separate fund for this one year tax reserve. See below E-Tax Clearance System web site.
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Goods & Services Taxes Taxes need to be paid on any income that is accrued in or derived from Singapore.
First you need to check if you are:
There is a 7 % Goods and Services Tax (GST) levied on the sale of goods and services by GST registered traders and on goods imported into Singapore. This tax increase is valid from July 1, 2007. Non-citizens have no tax-free limit when importing goods.GST will be refunded at the airport, prior to departure if more than S$300 is spent on goods not consumed in Singapore.Restaurants add on a 10% Service Surcharge to the bill and tipping is discouraged.1% Government Tax (CESS)Refunds
Once you spend a minimum of S$ 100 a visitor is entitled to Goods and Services Tax refunds (7%) through Premier Tax Free or Global Refund Singapore. Ask for Tax Free Shopping vouchers for receipts of purchases above S$100 or more. Refund can be claimed in cash at the airport departure hall or credited to Credit Card accounts. Refunds are in Singapore Dollar only and limited to SGC 500 per tourist.
You may collect your refund either at the airport or in the city. Global Refund and Premier Tax Free provide refund vouchers at point of sale terminals with 21 refund options. Produce these receipts and vouchers as well as the purchased goods at the GST refund counters at Changi airport.
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Central Provident Fund (CPF) CPF is a comprehensive social security saving scheme. Employers are exempted from making mandatory CPF contributions for new foreign employees on an Employment/ Professional Visit Pass or Work Permit. Contribution rates need to be paid by the employer and the employee as soon as the employee acquires Permanent Resident status. CPF contributions are exempted from income tax. See web sites below for more information and contribution rates.
If you are self-employed you are required to contribute to Medisave if your net trade income is above SGD 6,000 per year.
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