Professional intermediaries often express their frustration with the difficulties of opening corporate accounts for offshore companies nowadays, and it is certainly true to say that this is no longer the "turnkey" operation it once was (long gone are the days when it used to be possible for corporate service providers to open a bank account and receive an account number from a bank routinely by telephone).
However, opening bank accounts for offshore companies is a more practicable exercise for substantial trust and corporate service providers such as Vistra, and I and my colleagues at Jordans have seen at first-hand how we can now offer our clients a much broader and more reliable range of corporate banking services now that Jordans is a Vistra company.
Singapore: an international corporate banking centre
A good example of Jordans new and exciting range of offshore company formation and banking services comes from Singapore, and Vistra Singapore. Through our Singapore office we can now offer economical company formation and management services and we can also open bank accounts with the established local banks in Singapore. Once we have performed the necessary Customer Due Diligence, we can incorporate a Singapore company rapidly, normally within a few hours of electronic submission of the name application and its approval by the Accounting and Corporate Regulatory Authority. We are then normally able to open the corporate bank account in Singapore within 7-10 days of incorporation.
The Singapore company: features and tax profile
A feature of the Singapore company is that it requires at least one Singapore-resident director and a Singapore-resident secretary. This requirement of local company law also represents a good tax planning opportunity to establish company residence in Singapore. This can be potentially very advantageous for the following reasons:
1. The prevailing corporate tax rate in Singapore is 17%
2. There is no taxation of capital gains
3. With prevailing partial tax exemptions and corporate income tax rebates in Singapore, the effective tax rate may be less than 6.69% on the first S$300,000 of chargeable income.
4. Singapore adopts a territorial and remittance basis of taxation. This means that only income derived from Singapore and foreign sourced income remitted into Singapore is subject to Singapore tax. A Singapore tax resident company can also enjoy tax exemption on its foreign-sourced dividend, foreign branch profits and foreign-sourced service income remitted into Singapore, subject to certain conditions. As a result, it is possible to use Singapore companies for investment activities outside Singapore with a high degree of tax efficiency. Moreover, Singapore currently has 82 ratified comprehensive double tax treaties, with 7 more pending, which can be invoked to mitigate the incidence of double taxation.
Opening bank accounts in Singapore
Where Jordans provide the local directors and bank signatories from Singapore, we are normally able to open corporate bank accounts for Singapore companies within 7-10 days, subject to appropriate due diligence.
We can also provide a similar service to BVI companies or other non-Singaporean companies that wish to use Singapore as their place of management, and as their centre for banking operations. The opening of bank accounts for BVI companies may take a little longer than for Singapore companies – normally 10-14 days.
For most Singapore and non-Singapore companies planning on using Singapore as a tax and banking domicile, we have many banking options available for clients both in and outside of Singapore.
For certain beneficial owners (for example those from the Middle East or certain parts of Asia), the use of offshore directors is often unnecessary as part of any tax planning strategy. In these cases, BVI companies are probably preferable, as the Singapore company requires at least one Singapore resident director, which may not suit a beneficial owner who wishes to act as the sole director of the company and who wishes to operate the corporate bank account himself (unless of course the owner-manager is resident in Singapore). For such clients, Jordans can also assist with introductions to local Singapore banks, who can open accounts for these companies. Jordans can provide registered office and company secretarial services for such "owner-managed" entities (subject to due diligence) – whether these entities are Singapore-registered or BVI-registered.
Singapore is widely and properly regarded as an on-shore country, which is politically and economically stable, and well-regulated. Accordingly, Singapore is a jurisdiction which professional advisors should consider for international corporate and banking operations, particularly as the corporate tax regime is so favourable.
Now that Jordans is part of Vistra, we can provide our clients with access to Vistra Singapore's wide range of company formation, company management, tax, accounting and banking services.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.