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Banks & Taxes in Singapore
A Comprehensive Guide About Opening a Bank Account and Managing Your Taxes
Managing your finances in Singapore is probably something you have thought about if you are preparing to relocate to the Southeast Asian city-state. Certain aspects of life on the island can be expensive or require expert advice. We guide you on how to manage your finances and what important facts you need to know.
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This guide covers everything related to opening a bank account and the tax system in Singapore. Our guide explains taxes related to running and starting a business, and any tax relief you might benefit from. We also share information about the best and biggest banks in the country, bank fees and minimum deposits, and savings accounts.
Singapore has a progressive tax system, so the more you earn, the more tax you pay, and we explain the different levels.
Plus, you can find out how taxes for Singaporeans differ to taxes for non-residents, which is something you should bear in mind before you make your move to the Southeast Asian financial hub.
How to Open a Bank Account in Singapore
You might wonder how to open a bank account in Singapore for non-residents. Luckily, there are many different banking options to choose from. For most day-to-day banking, you will need a checking account with a local bank. Opening an account is a straightforward process but be sure to check what paperwork you will need beforehand.
Can You Open a Bank Account in Singapore?
Though there is no limit on the amount of foreign currency you can transfer into Singaporean current accounts, only bank deposits of up to 50,000 SGD (36,650 USD) are covered by the deposit insurance scheme. Account deposits in foreign currencies and offshore accounts are not insured at all.
Moreover, foreign banks can, and do, operate in Singapore, but they are subject to additional restrictions, such as the number of branches, and currency used for transactions.
Remember to consider the availability of ATMs when picking your bank; DBS Bank and the former POBS Singapore bank have the largest network among local banks, but several international banks in Singapore make up the atm⁵ interbank network.
Much like the rest of the world, interest rates remain low on both current and savings accounts. However, bringing the inflation rate under control has reduced the losses associated with moving money to Singapore. Later in this article, we tell you how to find a bank to best suit your needs, and how to open an account for non-residents.
Required Documents to Open a Bank Account as a Non-Resident
- Employment Pass
- A copy, from no more than three months ago, of one of the following as proof of your residential address:
- In Principal Approval (IPA) issued by the Ministry of Manpower
- Work permit
- Offer letter
- Employment contract
- Local utility bill
- Letter from school
- Government letter
- It is also worth bringing along the following:
- Tax or national insurance number from your previous country
- Note from your previous bank
- Recommendation from an existing customer of your chosen bank
Best Banks in Singapore
The following are the 10 top banks in the city-state:
- Developmental Bank of Singapore (DBS)
- Post Office Savings Bank (POSB)
- United Overseas Bank (UOB)
- OCBC Bank
- Standard Chartered Bank
- State Bank of India
- Barclays Bank
- Bank of China
International Banks in Singapore
If you are wondering where to put your savings when you move to Singapore, here are some expat-friendly banks worth considering:
- POSB and DBS (a merged banking group, has ATMs available in many areas across the city-state)
- UOB (also provides a good supply of ATMs)
- Bank of China
- Standard Chartered Bank
Setting Up a Singapore Bank Account: Types of Banks
When it comes to the different types of banks in Singapore, there are several distinctions to make.
- Merchant banks vs commercial banks – The 49 merchant banks deal with matters like corporate finance, mergers, and acquisitions, and management consultancy. They are not the go-to for the average expat who wants to open a bank account. For regular banking, head to one of over 100 commercial banks in Singapore.
- Local banks vs foreign banks – As far as commercial banking is concerned, local regulations distinguish between Singaporean banks and foreign institutions. In addition to the six local corporations, there are several sub-categories for foreign banks: full foreign banks, qualifying full banks, wholesale banks, and offshore banks.
- Online banking – Opening a bank account online in Singapore as a non-resident can be easy. For example, with ICICI Bank, you can fill in your details online and print the form, before attaching physical documents, such as proof of identity and proof of address. Then you send the form to the given address. The best online banks in Singapore offer a range of services for different needs, so shop around for a product that suits you.
You do not need to know the exact criteria for each category of foreign banks mentioned above, however, you should be aware of a couple of things: As the name implies, offshore banking offers only offshore accounts. Wholesale banks, on the other hand, provide a broad range of financial services but are limited to one main branch in Singapore, and forbidden from offering financial activities in Singaporean dollars. For these reasons, an offshore bank or a wholesale bank in Singapore is probably not appropriate for your daily business.
Bank Fees and Minimum Deposits
There is no such thing as a no-fee bank account in Singapore. Most accounts ask for a minimum deposit, an amount that varies bank by bank. Maybank, for example, requires 1,000 SGD (733 USD), while Standard Chartered asks for 30,000 SGD (21,990 USD).
Nevertheless, savings accounts are typically a cheap way to keep your money safe but beware of potential charges, such as the following:
- In Singapore, there is a ‘fall below fee’, whereby if your monthly average balance falls below a certain amount, you will be charged the fall below fee.
- There is also an early account closure fee around 50 SGD (37 USD), which tends to be charged if you close your savings account before six months.
- Singaporean banks may charge a “commission in lieu of exchange” fee for transferring foreign currency into your multicurrency bank account.
- Do not let the monthly service fee of around 2 SGD (1.5 USD) surprise you – some Singaporean banks charge a flat monthly fee to savings account users.
The Best Online Banks in Singapore
If you want to view your account, transfer money, and make payments online, there are several companies that allow you to do this in Singapore. Some of these banks also offer apps to make banking on the go even easier.
- DBS has an online “digibank”, with eStatements, PayLah!, and SMS Banking DBS has a mobile app and a dedicated expatriate program.
- OCBC offers services to permanent residents and foreigners over 18 years old who live in Singapore. The usual deposit amount is 5,000 units of whatever currency you use, although it is 50,000 units if you use Hong Kong dollars. OCBC has an attractive fall below fee level, at 0 SGD.
- Maybank is another option, which is popular in Singapore.
- UOB offers an option of opening a One Account once you are a permanent resident (you can apply after you have lived in Singapore for six months).
The Best Savings Accounts in Singapore
If you are looking for a Singaporean savings account that will allow you to gain on the money you put in, try some of these:
|Savings account||Interest rate per annum (approximate)|
|Bank of China SmartSaver||2 – 3.2%|
|Maybank Save Up program||2.95%|
|OCBC 360 account||1.55 – 2.45%|
|DBS Multiplier||1.55 – 2.2%|
|Citi MaxiGain Savings Account||1.2 – 2.2%|
|HSBC Advance account||1.45 – 2.15%|
|POSB SAYE account||2%|
Please remember that some of the higher interest rates shown above may only be available if you deposit a large sum, possibly hundreds of thousands of Singaporean dollars.
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What Is the Tax System in Singapore?
Before you move there, do some research to estimate your potential financial situation in the city-state and find out what the tax system is like in Singapore.
In the city-state, citizens are familiar with a progressive tax system, where, up to 320,000 SGD (234,538 USD), they pay a higher tax rate the more they earn.
Personal Income Tax
Non-residents are taxed at either 15% or the same rate as residents, whichever is highest. Director’s fees and other income are taxed at 22%. Non-residents do not benefit from tax breaks.
The average income tax in Singapore has actually come down since it was introduced in 1948 – then, the highest tax rate was 30% but it has dropped as low as 20% since and increased to 22% in 2017. Please see the below table for the income tax rates in Singapore on all levels of earnings.
Dividends paid by a company to shareholders are not taxed. The corporate tax rate in Singapore is 17%. There are government subsidies and schemes which can reduce this tax rate further.
Start-up Tax Exemption Scheme
Singapore encourages competition and innovation and has a Start-up Tax Exemption Scheme for companies in Singapore.
To qualify, the start-up must fulfill the following criteria:
- Have no more than 20 shareholders
- If there are corporate shareholders one must own at least 10% of the issued shares.
- Property and investment holding firms are not eligible.
Goods and Services Tax
This is a tax levied on imported goods, which is collected by Singapore Customs, as well as most goods and services in Singapore. Certain things, such as financial services and residential property sales and leases are exempt. This current goods and services rate is 7%.
The Singapore Government imposes a progressive property tax on owned properties, whether they are occupied or vacant, to encourage home ownership in the city-state. The tax increases for non-owner-occupied homes.
Tax on Rental Income
The government taxes income on “investment homes”. Rental income is taxable. The rental income is subject to income tax and the property is subject to property tax.
This is a tax levied on documents associated with immovable properties, stocks, and shares. Examples include lease/tenancy agreements, mortgages, and share transfer documents. It is an offense to use an applicable document without paying the stamp duty and can result in a fine up to four times the original stamp duty amount.
Customs and Excise Duties
Singapore charges duties on motor vehicles, tobacco products, and liquors.
Motor Vehicle Taxes
These are taxes specific to motor vehicles, which are intended to deter the ownership of cars and to control congestion. Included are registration fees, excise duty, road tax, and special tax.
Private lotteries, betting, and sweepstakes incur duties. These activities include totalizator or pari-mutuel betting, sports betting, sweepstakes, and any other betting system by an exempt organization in the Betting and Sweepstake Duties Order.
Foreign Workers Levy
Singaporean companies have to pay a foreign workers levy for their work permit and S Pass holders. This charge is to limit foreign manpower in the country. For S Pass holders, the monthly levy is between 315 and 550 SGD (231 – 403 USD).
Airport Passenger Service Charge
Formerly known as Airport Tax, this is paid by departing customers. The funds usually go to airport improvements.
What Is the Income Tax on Salaries in Singapore?
|Income limit (SGD)||Income limit (USD)||Tax rate (%)||Gross tax (SGD)||Gross tax (USD)|
|Next 10,000||Next 7,330||2||200||150|
|Next 10,000||Next 7,330||3.5||350||260|
|Next 40,000||Next 29,317||7||2,800||2,050|
|Next 40,000||Next 29,317||11.5||4,600||3,370|
|Next 40,000||Next 29,317||15||6,000||4,400|
|Next 40,000||Next 29,317||18||7,200||5,280|
|Next 40,000||Next 29,317||19||7,600||5,570|
|Next 40,000||Next 29,317||19.5||7,800||5,720|
|Next 40,000||Next 29,317||20||8,000||5,865|
|More than 320,000||More than 234,540||22||–||–|
Tax Brackets in Singapore
Once you have deducted all kinds of applicable tax relief from your total Singaporean income, you will arrive at your actual taxable income. As mentioned above, fiscal residents are subject to progressive rates for their income tax in Singapore.
For an annual income of less than 20,000 SGD (14,660 USD), they do not have to pay any tax at all. The tax rates in Singapore for all other brackets range from 2% to 22%. The latter only applies to the highest income group, with an annual income of more than 320,000 SGD (234,540 USD). You can find the exact tax rates for the year 2012 onwards on the IRAS website.
Self-Employed Taxes in Singapore
If you are self-employed or a freelancer and you have lived and worked in Singapore for 183 days or more, you will pay tax like residents, from 2% to 22%, depending on your income.
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