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Banks & Taxes in Singapore
A Comprehensive Guide About Opening a Bank Account and Managing Your Taxes
Managing finances in Singapore is important. In 2019, the country tied with Hong Kong as the most expensive city in the world to live in. One way to keep your finances safe is to open a local bank account. International banks are available across the city, and local banks like the merged Development Bank of Singapore (DBS) and Post Office Savings Bank (POSB) offer expats banking solutions.
Many business-minded expats are drawn to Singapore thanks to the bank account and tax systems. Having remained financially stable since the crash of 2008, Singapore residents and non-residents alike enjoy low tax rates that are paid only on income earned within the nation.
Landing in a new city and setting up a bank account is not so simple. Luckily, for people relocating to Singapore, our banking and taxes guide covers everything you need to know such as how to open a bank account with the best banks in the country. We have also included information on the tax system for different types of workers, so self-employed people and non-residents can understand how much tax they have to pay.
How to Open a Bank Account in Singapore
This section looks at something that should be high on your “Things to Do” list when you move to Singapore—how to open a bank account in Singapore for non-residents. Opening a local bank account is beneficial because your bank from home might charge you for international withdrawals and purchases. Plus, receiving salary payments and setting up bills is a lot easier with a local account.
Our guide to personal banking in Singapore covers everything from how to open your account to the top banks for expats and the banks fees you should be aware of. If you think you need more guidance, our InterNations GO! settling-in services are tailored to help you feel at home. We can assist you to set up bank accounts and bills quickly and easily.
Can I open a Bank Account in Singapore?
Due to anti-money laundering laws, it is getting more complicated for non-residents to open a bank account in Singapore. However, if you are over the age of 18 and employed in the country with all the relevant legal paperwork, opening a bank account should be straightforward.
What Do You Need to Know?
First things first, not every bank will accept a foreigner. See our list of banks below for institutions that will accept non-residents. International banks are available, while local banks like Development Bank of Singapore (DBS) and Post Office Savings Bank (POSB) offer accounts specifically for foreign workers.
Location is key when choosing your bank. Banking issues often require coming to the bank in person in order to be resolved. Using a branch that is close to your home or work is important because banks in Singapore are often closed on the weekends.
Your situation will also help with choosing a bank. If you travel to your home country regularly, you should investigate multi-currency accounts, for instance. For people who need to send money home, you should look at the bank’s remittance limits and associated fees.
Opening a Bank Account
Once you have decided on a bank, you can book an appointment to open your account or apply online. Online applications are often easiest, and we have included a comprehensive list of online banks below. If you want to open a joint account, note that both account holders need to be present to open the account. Each person can visit the bank separately.
Required Documents to Open A Bank Account as a Non-Resident
Taking all the right documents with you to the bank will save you time and effort. For all banks, make sure you have:
- valid proof of identity, such as Passport or National ID Card;
- proof of residence dated within three months (this can include phone bills and utility bills);
- valid employment pass or In Principle Approved (IPA) from the Ministry of Manpower;
- your tax or National Insurance numbers.
You may also be required to supply:
- valid rental agreement and government issued proof of address;
- formal letter from your employer and proof of employment (such as a contract or pay slip),
- bank statements from your home country;
- reference or introduction letter from your home bank;
- reference or introduction letter from a current customer at the bank you are applying to.
The requirements vary across different banks and can include extra criteria like needing 6 months validity on your passport. Make sure you check ahead of time that no extra documents or conditions are needed.
If you are settling in Singapore for only a few months each year, you should still be able to open a bank account. In this case, the bank’s website will have relevant advice about the specific documents you need.
A key issue for expats to be aware of when setting up a Singapore bank account are the terms and conditions. Most bank accounts have several fees as well as a minimum deposit. Make sure that you are aware of how much money you need before deciding on an account.
Bank Fees and Minimum Deposit
When banking in Singapore, it is good to be aware of the “minimums” involved.
- Minimum deposit: the lowest amount needed to open your bank account.
- Minimum daily average balance (MDAB): the lowest average amount you should have in your bank account each day. This can vary between 500 SGD to 3,000 SGD (370 USD to 2,165 USD).
If you are unable to reach the minimum deposit, you will not be able to open a bank account. When your account falls below the MDAB, you will be subject to a “fall below” fee. This adds up quickly, and it is advised that you go back above the limit as soon as possible.
Remittance fees might also affect expats in Singapore. Make sure that you are aware of the costs involved before you transfer money back home or between currencies directly from your bank account.
No Fee Bank Accounts in Singapore
If your cash flow is tight, or if you prefer accounts with no fees, the following options are available to you:
- Standard Chartered SuperSalary Account: 0 SGD minimum deposit, 0 SGD MDAB, 0 SGD fall below fee.
- CIMB FastSaver Account: 1,000 SGD (740 USD) minimum deposit, 0 SGD MDAB (but no interest paid on balances below 1,000 SGD), 0 SGD fall below fee.
- DBS Expat Programme: 0 SGD remittance fees and same day transfer of money to countries including Australia, USA, UK, Eurozone countries, and Mainland China.
Best Savings Accounts in Singapore
Singapore has a wide range of savings options open to non-residents. The country offers relatively low interest rates for savings accounts based on the Singapore Interbank Offered Rate (SIBOR).
Good options for expats include:
- DBS Multiplier Account: A multi-currency account that offers up to 12 foreign currencies, expats can earn up to 3.8% interest per annum with no minimum salary requirements.
- United Overseas Bank (UOB) One Account: if you credit a minimum of 2,000 SGD (1,400 USD) in salary a month and spend at least 500 SGD (350 USD) you can earn up to 3.88% interest per annum.
Expat bank accounts from international providers like HSBC, Standard Chartered, and Citibank are also available.
As a founding member of the Association of South East Nations (ASEAN), created to promote economic growth in the region, Singapore is home to several International banks. These include Chinese, European, and Australasian banks.
To make banking easier across the nation, the “ATM5” network was created. ATMs with the ATM5 logo offer free withdrawals from banks including ANZ, Citibank, HSBC, and Standard Chartered. Other international banks in Singapore include BNP Paribas and Bank of China.
If you are already a client of one of these banks, you might be able to open a Singapore bank account before you move. You will need to contact your bank individually to see if this is possible.
Best Banks in Singapore
The five most widely recommended banks for foreigners are listed below.
- DBS/POSB: with many ATMs, these merged Singaporean banks allow you to open an account with your IPA.
- UOB: a local bank with many ATMs and a range of account options open to expats.
- Citibank: ATMs are often found close to the Metro, and loans are available to foreigners.
- HSBC: has an expat bank account for existing customers with 50,000 GBP (65000 USD) in HSBC deposits or investments, with free remittance to 230 countries.
- Standard Chartered: worthwhile for people who already bank with Standard Chartered, but with fewer ATMs available (though part of the ATM5 scheme).
Online Banking in Singapore
If you are looking for a traditional online banking account, most of the banks above have the best online banking options available to expats in Singapore.
You can also consider setting up a multi-currency online-only bank account. This may save you from having to pay fees and may be more appropriate if you are not sure how long you will stay in Singapore. For instance, Revolut is an online-only bank that operates in Singapore. You can hold up to 14 currencies at once, including Singapore Dollars.
If you use an online-only bank in your home country, you can check to see the costs involved with international transfers and ATM withdrawals in Singapore. Whilst this often is not the best long-term solution, as such banks often do not offer a Singapore Dollar option, this might see you through the first few months of settling into the country.
InterNations GO! can help speed up this process. Check out our settling-in relocation services today.
How to Open a Bank Account Online in Singapore as a Non-Resident
Considering how hectic relocating can be, opening a bank account online is convenient for expats.
In Singapore, this is relatively easy to do as long as you have the correct documents scanned and saved. DBS allows you to apply for an account online, though you may still be requested to visit the branch in-person. Applications to open an account with online banking can take up to two weeks to process.
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What Is the Tax System in Singapore?
If the next step in your career involves moving to Singapore, you will need to know what is the tax system is like. It is important to remember is that the Singapore tax year runs from January 1st until December 31st. This is called a particular year of assessment, or YA.
Singapore’s tax system is widely considered to be generous. Benefits for foreigners include low income tax rates and zero capital gains tax. Highly skilled expats and those who own businesses find this a key incentive for relocation.
This guide covers all the important information you need to know about how you will be taxed in the Lion City. We look at everything from how the tax system works to income tax for workers and self-employed people.
If you need tailored advice, contact our InterNations GO! relocation specialists and ask about how our Singapore tax system experts can help you.
Are You A Tax Resident in Singapore?
First, you need to consider the visa that you are using to move to the country. You will be automatically considered a tax resident if you possess a work pass that is valid for at least one year.
Next, consider the length of your stay. It is worth noting that your physical presence in the country immediately before and after your employment is taken into account.
- Staying or working in Singapore for at least 183 days in a calendar year. You will be considered a tax resident for that year.
- Staying or working in Singapore across two calendar years, with your continuous period of stay being at least 183 days. You will be considered a tax resident for both years.
- Staying or working continuously in Singapore for 3 consecutive years. You will be a tax resident for all three years.
Rules are different for certain foreign professionals who are not in the country long term, such as the directors of companies and public entertainers. See the “Tax on Salary” section below for more information.
Types of Taxes in Singapore
There are some key taxes that expats relocating to Singapore should be aware of:
- Income Tax;
- Property Tax;
- Motor Vehicle Taxes;
- Customs and Excise Duties, imposed primarily on tobacco, petroleum products, and liquors;
- Goods and Service Taxes, paid on goods and services (including imports).
If you own a company, it is important to know that a foreign worker levy must be paid for every employee with a temporary or long-term work pass. This is paid by the company and not by individual employees. Failure to pay can result in fines and the loss of your employee’s work permit.
There is no capital gains tax or inheritance tax to be paid in Singapore.
Tax on Salary in Singapore
A common question for expats is what is the tax rate in Singapore?
All income earned or generated in Singapore during a tax year is considered taxable income. This includes bonuses, commission, housing, stock options, and meal and transport allowances. Generally, overseas income is not taxed and does not need to be declared.
Singapore has Double Tax Agreements (DTAs) with numerous countries including Germany and the United Kingdom, as well as a limited treaty with the United States of America. DTAs prevents you from paying tax on your income twice. Check out the Inland Revenue Authority of Singapore website to see if your country has an agreement.
What is the Income Tax Rate in Singapore?
The country’s progressive income tax system starts at 0% and rises to 22% for people earning over 320,000 SGD (237,000 USD). If your annual income is less than 22,000 SGD (16,000 USD), then you do not need to pay tax. You may still need to file a tax return if asked to by authorities.
The Inland Revenue Authority of Singapore (IRAS) states that from YA 2017, the rate of income tax on residents is 200 SGD (X USD) on the first 30,000 SGD (X USD). On the first 320,000 SGD (X USD) you pay 44,550 SGD (140 USD). For a full list of income tax brackets for tax residents, look at the Inland Revenue Authority of Singapore website.
If you work in Singapore for less than 60 days, and your time out of the country is not directly related to your work in Singapore (for example, being sent to work abroad by a Singaporean company), you are exempt from paying income tax.
If you stay or work in Singapore for 61-182 days, you will generally be taxed at a flat rate of 15%. This also applies to people with work permits who decide to leave Singapore for good in less than 183 days. In this case, you will not be considered a tax resident for that year.
Certain groups of people are excluded from these exemptions. This includes directors of companies, public entertainers, and professionals including foreign experts, speakers, coaches, etc. These people pay 10-22% tax, depending on their situation. If this applies to you, InterNations GO! has Singaporean relocation partners can help you find out more about the tax you will pay.
Taxes for Self-Employed People in Singapore
Whether you have a side business or you are a full-time freelancer, you are subject to self-employed taxes in Singapore. This includes income received in the form of virtual currency.
You will need to submit a tax return by April 15th each year, or on the 18th if you submit online. Detailed bookkeeping is recommended in Singapore. You will also have to include a 4-line statement detailing your revenue, gross profit, allowable business expenses, and adjusted profits.
The IRAS will usually send a tax bill to you by September of the same year.
Start-Up Tax Exemptions
New start-up companies that have been in existence for less than three years are eligible for certain tax exemptions. In YA 2020, start-ups will get a 75% tax exemption on the first 100,000 SGD (74,000 USD) of normal chargeable income. The next 100,000 SGD of normal chargeable income can receive 50% tax exemption. This means the maximum exemption is 125,000 SGD (92,000 USD).
Do you want to relocate? If you have never moved abroad, the process will be overwhelming, and if you have, you know the burden that lies ahead. Whatever stage you are at, InterNations GO! can help you with a complete set of relocation services, such as home finding, school search, visa solutions, and even pet relocation. Our expert expat team is ready to get your relocation going, so why not jump-start your move abroad and contact us today? Best to start early!
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