Thousands of international companies open bank accounts in Singapore and keep their money in Singaporean dollars. Why is the jurisdictions so popular with business people from other countries? The main reasons why Singapore is loved by the international business community include the following ones:
- Singapore is a reliable jurisdiction with a spotless international reputation.
- The political system is extremely stable in the country.
- The Singaporean dollar exchange rates are also stable.
- No currency control is applied in Singapore.
- It is possible to open multicurrency bank accounts there.
- International money transfers can be executed in a fast manner.
- The banks charge moderate fees and commissions while accounts can be opened in all major currencies.
- Bank accounts can be managed remotely from any place of the world.
- You can obtain bank tokens, debit and credit cards as well as checkbooks thus making remote account management even simpler.
- You can link your account with a payment system (such as Stripe or PayPal, for instance to your Singaporean bank account.
- A high level of banking privacy is available in Singapore.
- All Singaporean dollar deposits are insured for up to SGD 75,000.
A company setting up a bank account in Singapore gains access to the most up-to-date international payment methods, multicurrency accounts, remote account management opportunities, and efficient banking solutions available to small- and medium-size business companies.
How can a foreigner open a bank account in Singapore?
Let’s be frank and say that the task may prove rather difficult especially for companies registered in some countries. The place of the company directors’ residence is also of utmost importance when you apply for corporate banking services in Singapore.
Moreover, even if you have a company registered in Singapore, there is NO guarantee that a bank account will be opened for you. What is the reason for that? A company owned by a foreigner in Singapore is potentially a riskier customer for the bank than a company owned by locals. If anything goes wrong, the bank might have to pay a huge fine or even lose its license. This is why banks in Singapore put forward more stringent requirements to companies whose directors or shareholders are foreigners. You may have to consider banking in some other country. For example, a Swiss bank account for a Singaporean company is an option that deserves attention.
Every bank in Singapore will have its own list of requirements for corporate clients and every bank will set its own rules as far as the security deposit is concerned, and so on. The most general requirements that are applied all over the country usually include the ones listed below:
- You have to submit a large package of corporate documents when applying for banking services.
- You have to make an initial deposit of $1,000 to $100,000 depending on the particular bank and a security deposit of the same amount is usually required too.
- Company directors and other account signers have to be personally present when applying for corporate banking services.
Your chances for success are going to be much greater if 30% of your Singaporean-registered company is owned by a citizen or a legal resident of Singapore. If this is the case, you will have a much wider choice of banks and you will find much more attractive tariffs and service conditions.
If 100% of your company shares belong to foreigners (non-Singaporeans), you should not despair. It is still possible to set up a corporate account for your company in Singapore even though the task is going to be more difficult.
You have to supply the following documents when applying for corporate banking services in Singapore:
- A completed application form (the bank form will usually be available for downloading on the bank’s website);
- Resolution of the Board of Directors on account opening;
- Company owners’ personal data;
- Passport copies and proofs of addresses for all company directors and shareholders;
- Company Registration Certificate;
- A copy of the Company By-laws.
These are mandatory documents. Every bank will be pleased to see some additional documents and in each case, the list of preferable additional documents will be different. Therefore, you’d better seek professional advice from a lawyer who has helped clients open accounts with the particular Singaporean bank that you have chosen.
Opening a bank account in Singapore for a foreign company
If you have a company registered in another jurisdiction, opening a corporate bank account for the company in Singapore is possible but you will have to supply much more documents. The country of your company domiciliation will also matter.
Besides, the account maintenance costs are going to be higher too. For example, most banks in Singapore charge account opening fees of $500 to $1,500 when setting up accounts for foreign corporate clients.
As far as the application documents are concerned, you will have to submit the following documents in addition to those listed above:
- An extract from the Business Register of the country where the company is domiciled;
- Company directors and shareholders’ personal data;
- A Letter of Recommendation from a reputable bank;
- A tax declaration/ audited financial report for the last year.
These are only basic documents. Every bank will ask for a few more papers. Have no doubt about it.
All the application documents have to be in English, translated if necessary, and legalized in a proper way.
Why Singaporean banks can deny services to a corporate applicant
Banks never disclose their reasons for denying services to applicants but extensive experience and empirical analysis allows us to point out 10 main reasons why banks in Singapore may refuse to open an account for a corporate client. These are listed below.
- You have chosen the bank wrongly. One Singaporean bank may be reluctant to take your company onboard because it works in the ‘wrong’ industry or it is registered in the ‘wrong’ country. Another Singaporean bank, on the contrary, may be happy to consider your application. Internal bank policies are different in Singapore.
- You have failed to convince the bank that your business is real. You have presented a vague business plan and your business model is unclear for bank managers.
- You have failed to convince the bank that you need an account in Singapore. You say ‘My counteragents in Turkey, Kazakhstan, and China…’ and the bank manager goes ‘Wait! Then why do you need a bank account in Singapore?’
- You have supplied insufficient or false information. If your company does not have a website, it’s a major drawback.
- Your company has failed to meet one of the Compliance Department requirements that you didn’t know about. For example, different banks have dissimilar lists of high-risk business activities.
- You have failed to submit certain documents that could prove that yours is a serious business.
- You have said something that you should not have said at the interview.
- The name of a company director or shareholder coincides with the name of a blacklisted person. That would be an unfortunate coincidence indeed!
- The bank suspects that your company might be used for money laundering purposes.
- Your company has a serial nominee director. If your nominee director is also the director of 10 more companies, your chances for opening a bank account are close to zero.
Ways of improving your chances for opening a corporate bank account in Singapore
In the final section of the article, we are going to list several factors that are going to improve your chances for setting up a bank account for your company in Singapore. The following things will help:
- Business and banking experience in other countries;
- Proven professional qualifications of the company directors;
- Well-laid-out company officers’ CVs written in good business English;
- A corporate website;
- Contracts and agreements with partners and clients;
- Invoices and bills from foreign countries;
- A nominee director with a small number of companies under him/ her (the fewer the better);
- At least restricted account access rights for the nominee director;
- Business partners/ clients in Singapore;
- A long-term visa to Singapore;
- A company office and personnel in Singapore.
Not less important is seeking professional support when applying for corporate banking services in Singapore.
