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Flag of Singapore
System of government: parliamentary republic
Population: 5.57 million
Currency: Singapore dollar (SGD)
FX regime: floating
GDP: US$308bn (2014 est)
IGTA member: yes
FATF member: yes
Treasury association: Association of Corporate Treasurers (Singapore)
Other professional financial/banking associations:

The Association of Banks in Singapore

Institute of Banking and Finance

Financial regulatory framework

Bank supervision

The Monetary Authority of Singapore (MAS), Singapore’s central bank, is responsible for bank supervision.

Exchange controls

Singapore’s currency is the Singapore dollar (SGD). There are no exchange controls applied in Singapore, although there are some restrictions on the use of the Singapore dollar for non-domestic transactions. Singapore and Brunei currency can be interchanged at par without restriction or charge in both locations.

Taxation framework

Corporate tax

A company is taxed at a flat rate on its chargeable income; the corporate tax rate is 17%. A partial tax exemption is given to companies on chargeable income of up to SGD 300,000 that is taxed at the normal corporate tax rate, as follows:

  • 75% exemption on first SGD 10,000 of chargeable income; and
  • 50% exemption on next SGD 290,000 of chargeable income.

Taxation on dividends

There is no withholding tax on dividends.

Taxation on interest

Generally, a withholding tax of 15% on the gross amount is levied on interest, commission, fees or other payments in connection with any loan or indebtedness or with any arrangement, management, guarantee or service relating to any loan or indebtedness paid to non-resident companies. However, withholding tax would not apply to:

  • any arrangement, management or service relating to any loan or indebtedness where the arrangement, management or service is performed outside Singapore by a non-resident person who, in the event, is not an individual, is not incorporated, formed or registered in Singapore, and does not carry on a business and does not have a permanent establishment (PE) in Singapore, or carries on a business or has a PE in Singapore but the arrangement, management or service is not performed through that business or PE in Singapore; and
  • any guarantee related to any loan or indebtedness, where the guarantee is provided by a guarantor who is a non-resident person who, in the event is not an individual, is not incorporated, formed or registered in Singapore, and does not carry on a business in Singapore and does not have a PE in Singapore, or carries on a business in Singapore or has a PE in Singapore but the giving of the guarantee is not effectively connected to that business or PE in Singapore.

Interest derived by a non-resident company without a Singaporean PE from qualifying debt securities, deposits in an approved bank in Singapore and approved Asian Dollar Bonds is also exempt from withholding tax if it is not derived by the non-resident company through its operations carried out in or from Singapore. A similar exemption applies to amounts derived from Islamic debt securities issued during specified periods. Non-resident companies may also qualify for a reduction of, or exemption from, withholding tax on interest and royalties if the non-resident beneficial owner is able to benefit from a reduced rate under a double tax treaty.

Goods and Services Tax (GST)

GST is imposed on the supply of goods and services in Singapore and on the importation of goods into Singapore. The standard rate is 7%, but the export of goods and the supply of international services are zero-rated.

Transfer pricing

The Singapore Income Tax Act includes provisions to enforce the arm’s length principle and to provide the IRAS with legislative powers to address non-arm’s length dealings. Companies must ensure that their intercompany transactions are at arm’s length and prepare adequate documentation to avoid any potential tax adjustments by the IRAS. Guidance issued by the IRAS in 2006 provides its interpretation of the provisions of the Singapore Income Tax Act affecting the pricing of cross-border related-party dealings. The guidance includes detailed chapters on the application of the arm’s length principle, documentation requirements, advance pricing arrangements (APAs) and requests to invoke the mutual agreement procedure (MAP) under the tax treaties. The guidance adopts the definition of the arm’s length principle as endorsed by the OECD (even though Singapore is not a member of the OECD). This aligns Singapore’s transfer pricing rules with the standard adopted in the transfer pricing rules of most jurisdictions, and should assist Singaporean taxpayers in avoiding double taxation. The guidance also emphasises that the IRAS intends to avoid placing unnecessary compliance burdens on taxpayers. The guidance states that taxpayers need only maintain adequate documentation to show compliance with the arm’s length principle, and that “taxpayers are not expected to go to such lengths that the compliance costs arising from the preparation of documentation are disproportionate to the amount of tax revenue at risk, or to the complexity of the transactions”. Nonetheless, taxpayers are expected to maintain adequate documentation to demonstrate that reasonable efforts have been made to determine that the pricing of cross-border related-party dealings is consistent with the arm’s length principle. The guidance lists the type of information that may be considered helpful in substantiating compliance with the arm’s length principle. On 23 February 2009, the IRAS issued a Supplementary Circular on the application of the arm’s length principle to related-party loan and service arrangements. The IRAS has confirmed its position that related-party loans should comply with the arm’s length standard. However, loans extended between related parties both of which are Singapore-based entities are exempt from the need to apply an arm’s length interest rate, and the IRAS is prepared to continue with the interest adjustment practice for such interest-free loans. Loans between a Singapore-based entity and a related entity based outside Singapore (‘related cross-border loans’) are required to comply with the arm’s length principle.

Thin capitalisation

There are no thin capitalisation rules in Singapore.

Capital gains tax

Capital gains are exempt from tax.

Tax information provided by Deloitte Touche Tohmatsu and Deloitte Highlight 2015 (

Banking service provision

As of July 2015, there were 126 commercial banks (121 foreign and five local banks), 38 merchant banks, 40 representative offices of banks and four finance companies operating in Singapore. The commercial banks include 28 full banks that offer retail and wholesale services (of these five are locally owned), 55 wholesale banks (all branches of foreign banks), and 38 offshore banks (also foreign owned). Three domestic banks – the Development Bank of Singapore, the United Overseas Bank and the Overseas-Chinese Banking Corp – dominate the provision of banking services to retail consumers and small businesses in Singapore. These banks also retain a dominant position in domestic deposit taking and loan provision from both the retail and commercial banking sectors. Ten foreign banks have been awarded Qualifying Full Bank (QFB) status, including ANZ Bank, BNP Paribas, Citibank and HSBC. This allows banks to operate at a total of 25 places of business, share ATMs among themselves, and relocate their places of business freely. Government efforts to develop Singapore as a regional financial centre have attracted a large number of foreign banks to the country. However, the Monetary Authority of Singapore (MAS) has discouraged foreign ownership of Singapore’s banks by creating local management nominating committees that must contain a majority of board members that are citizens of Singapore and permanent residents. MAS can veto acquisition of large stakes in local banks if it is considered harmful to the bank and country in general. However, in June 2012 MAS announced amendments to its QFB programme to encourage foreign banks to deepen their participation in Singapore’s banking sector. As a result, banks that MAS deems important to Singapore’s domestic market will be required to incorporate their retail operations domestically.

Clearing and payment systems

Clearing systems

Singapore’s payment clearing systems are overseen by MAS, which also operates the main RTGS payment system. The retail payment system and the two cheque clearing systems constitute the Singapore Automated Clearing House, which is operated by Banking Computer Services. The different systems are linked together by MAS’s MEPS+ clearing system.


MAS adopted a new real-time gross settlement system (MEPS+) in 2006. MEPS+ processes SGD-denominated electronic credit transfers. There is no limit to the value of payments submitted for clearing through MEPS+. The system uses internationally established SWIFT standards and services. As of July 2015, there were 63 direct participants in MEPS+.

Interbank GIRO (eGIRO)

The Interbank GIRO is one element of the Singapore Automated Clearing House. The Interbank GIRO system processes low-value electronic bulk payments, including both direct credits and direct debits. Payroll credits are the most common form of direct credit. Many consumers and companies pay regular utility bills via the direct debit system. At present, the participant banks are extending the service, by allowing retail consumers to initiate direct credits from ATMs or over the Internet. At present, there are 39 direct and 6 indirect participant banks in eGIRO.

Singapore Automated Clearing House cheque clearing

The Singapore Automated Clearing House also includes two separate cheque-clearing systems. One processes cheques, drawn on local banks, denominated in SGD. The other processes cheques, also drawn on local banks, denominated in US$. There are 34 direct and 30 indirect participants in the SGD cheque clearing system. There are 32 direct and 16 indirect participants in the US$ cheque clearing system.

NETS (Network for Electronic Transfers)

ATM, EFTPOS and CashCard (electronic money) payments are processed through NETS, which is owned by a consortium of Singapore’s three largest domestic banks. Each bank’s net position is settled through participant accounts held at the Development Bank of Singapore.

Payment instruments

Cheques remain a popular payment instrument, especially for consumers and small businesses. There has also been a rapid growth in the use of electronic payment methods. For retail payments, along with cash, card-based electronic money transactions are the most popular method.

  • Credit transfers – In 2013, there were 42.7 million credit transfers effected in Singapore, worth a total value of SGD 231.8 billion, representing 20.2% of the total value of non-cash payments processed, but only 1.2% of the total volume.
  • Direct debits – Direct debits are used primarily by utility, telecommunications and insurance companies to collect small and regular payments from consumers and small businesses. As with other forms of electronic payment, the use of direct debits is gradually increasing in terms of the total value of payments processed. In 2013, there were 57.1 million direct debits with a value of SGD 85.3 billion.
  • Payment cards – The overall value of payment card transactions in Singapore is increasing rapidly. There were 258.2 million debit card transactions in 2013. At the end of 2013, there were 10.9 million debit cards in circulation in Singapore. There were 8.2 million credit cards at the end of May 2015.
  • Electronic money – Electronic money has developed as an important method of making small-value retail payments in Singapore. In 2013, although electronic money payments represented just over 0.2% of value of the total non-cash payments in Singapore, they represented 87.8% of the volume of non-cash payments. There were 23.1 million stored value multipurpose cards in circulation in Singapore at the end of 2013.
  • Cheques – Although declining in use, cheques remain a popular payment instrument in Singapore among retail consumers and small businesses. The overwhelming majority of cheques drawn on Singaporean banks are denominated in SGD (68 million with a value of SGD 634.1 billion in 2014), although a significant number of USD-denominated cheques are written as well (940,000, with a value of SGD 52.5 billion in 2012).
  • Paper-based credit transfers – Paper-based credit transfers are still available in Singapore, although there has been a growth in the use of electronic credit transfers. Paper-based credit transfers are used to initiate standing order payments and also, in some cases, for payroll payments.
  • Cross border – Urgent cross border payments can be effected by telegraphic transfer, which, for most currencies, take two days to clear. US$-denominated transfers can be effected in one day, depending on the banks’ capabilities. Some banks also have access to TARGET2 and the EBA’s EURO1 system, via their own networks, for EUR denominated payments. Low-value cross-border payments are cleared via the banks’ own correspondent banking network.

Cash and bank account management

Account availability

Residents can open and maintain domestic currency (SGD) and foreign currency accounts domestically and abroad. Resident domestic currency accounts are convertible into foreign currency. Non-residents are also allowed to hold both foreign and domestic currency (SGD) accounts; non-resident domestic currency accounts are convertible into foreign currency. Although it is permitted, banks do not usually pay interest on current accounts account surplus balances. However, companies may be able to negotiate the payment of interest on both domestic and foreign currency accounts.

Money laundering

Singapore has implemented anti-money laundering legislation (the Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act 2000 as amended in 2006 and 2013; the Terrorism (Suppression of Financing) Act 2003 Revised Edition as amended and the Casino Control Act 2006; the Monetary Authority of Singapore (MAS) has also issued a series of regulatory Notices that are regularly updated). A Financial Action Task Force (FATF) member, Singapore observes most of the FATF-49 standards. Singapore is also a member of the Asia/Pacific Group on Money Laundering (APG) and the Group of International Finance Centre Supervisors (GIFCS). The Monetary Authority of Singapore (MAS) issues all anti-money laundering regulations and monitors financial institutions’ compliance. MAS has issued a number of Notices to various financial sectors setting out their anti-money laundering obligations. In August 2006, it issued for public comment, revised draft regulations for banks and new draft regulations for other financial institutions. Singapore has a financial intelligence unit (FIU), the Suspicious Transaction Reporting Office (STRO), which is a member of the Egmont Group.

Information supplied by BCL Burton Copeland ( Data as at January 2015.

Treasury centres

Singapore’s Finance and Treasury Centre regime allows companies to benefit from a concessionary 8% tax rate for qualifying activities. The regime is aimed at multinational companies that want to manage their regional treasury activities from Singapore. The centre must be located in Singapore to qualify for the concessionary tax rate.

Cash concentration

Cash concentration is a liquidity management capability whereby account balances are physically transferred to/from a single account (known as a master, header or concentration account) for liquidity management purposes. Cash concentration can take these forms:

  • Zero balancing (ZBA) – Sometimes referred to as sweeping, zero balancing is a cash concentration capability whereby the total of all account balances is physically transferred into a nominated account.
  • Target balancing – Also known as sweeping, target balancing is a cash concentration capability similar to ZBA, whereby all account balances are physically transferred into a nominated account leaving a predetermined amount in the sub-accounts.
  • Threshold balancing – A cash concentration capability similar to ZBA, whereby the balances of the sub-accounts are physically transferred in their totality into a nominated account each time the sub-account balances reach a predetermined threshold.

For residents, domestic cash concentration techniques are the more popular method of liquidity management in Singapore. Cash concentration is available in both domestic and foreign currency. Non-resident bank accounts may participate in a cash concentration structure. Non-residents may have to pay a withholding tax on interest payments. However, non-resident participants in an Approved Finance and Treasury Unit will not have to pay a withholding tax and they will also benefit from a concessionary 10% tax on qualifying income from overseas related companies.

Cross border sweeping

Resident companies are permitted to participate in cross border sweep structures. Singapore is a popular location for regional and global cash concentration header accounts. A regional treasury centre established under the terms of Singapore’s Approved Finance and Treasury Centre regime allows participants to benefit from a concessionary 10% tax on qualifying income from overseas related companies. For a resident to be permitted to participate in structures based outside Singapore, the structure must be denominated in foreign currency. A withholding tax may be applied by the country in which the header account is located. Non-resident companies can participate in cross border sweep structures based in Singapore. Non-residents may have to pay a withholding tax on interest payments. However, non-resident participants in an Approved Finance and Treasury Unit will not have to pay a withholding tax and will benefit from a concessionary 10% tax on qualifying income from overseas related companies.

Notional pooling

For residents, notional pooling is permitted in Singapore for structures denominated in both domestic and foreign currency. Some banks offer quasi-notional pools through the operation of a cash concentration structure using mirror accounts. Non-resident entities may choose to locate notional cash pools in Singapore. Structures can be denominated in both domestic and foreign currency.

Electronic and internet banking

Electronic banking is common practice in Singapore, with most banks offering electronic banking services such as reporting and payment initiation via their own proprietary services. Internet banking is becoming increasingly commonplace with the introduction of browser-based financial software. All the major banks offer some form of internet banking, which generally includes next-day or same-day domestic and international balance and transaction reporting, as well as some form of domestic and international transfer capability.

Liquidity management

Short-term investments

Short-term investment instruments include:

  • Treasury bills – the Monetary Authority of Singapore issues treasury bills via regular auctions. Bills with three-month maturities are issued weekly; those with an annual maturity are issued twice a year. Minimum investment is SGD 1,000.
  • Repurchase agreements – repos are widely available in Singapore.
  • Demand deposits – interest-bearing demand deposit accounts denominated in both local and foreign currency are available to both residents and non-residents. There is no minimum investment term.
  • Time deposits – bank time deposits are available for a range of maturities from one month to over a year. Time deposits can be held in both local and foreign currency.
  • Certificates of deposit – banks issue CDs denominated in both SGD and USD. SGD-denominated CDs are issued in multiples of SGD 50,000, with a minimum value of SGD 100,000 and a maximum value of SGD 250,000, and are usually issued with maturities of between three months and five years. US$-denominated CDs are issued with a minimum value of $100,000 and have a minimum maturity of one month.
  • Corporate notes – Singapore-based companies issue corporate notes with maturities of up to one year. In most case, the notes are denominated in SGD.
  • Money market funds – money market funds are available in Singapore.

Short-term borrowing

Borrowing instruments include the following:

  • Overdrafts are commonly available. Companies usually have to provide security against an overdraft, although this allows them to use the facility up to the agreed limit.
  • Bank credit lines are also widely available. Most bank charge interest at a margin over SIBOR (the Singapore interbank offered rate).
  • Discounted trade bills. Bills of exchange denominated in SGD and US$ are discounted by local and foreign banks.
  • Highly rated local companies issue commercial paper, usually in the form of corporate notes.
  • Factoring is a common form of financing, with a wide range of factoring services available.
  • Companies are also able to arrange funding in the form of credit terms from their suppliers. The usual credit terms are between 30 and 60 days for domestic transactions.
  • Inter-company loans are not permitted between non-financial institutions.

Benchmark rates

The main interbank interest rates are SIBOR (Singapore interbank offer rate) and the SGD swap offer rate (SOR). These are set daily under the auspices of the Association of Banks in Singapore (ABS) by a panel of 20 banks.

Corporate finance

Capital markets

Singapore’s stock exchange, the Singapore Exchange is divided into two markets – the SGX Main Board and the, junior, Catalist (previously Sesdaq) system. Listing on both markets is open to local and foreign companies. The regulations for listing on Catalist are less stringent than for the Main Board. Foreign companies may list their shares in local or foreign currency. The Singapore Exchange is regulated under the terms of the Securities and Futures Act by the Monetary Authority of Singapore.

Risk management

A wide range of risk management instruments is available. Singapore has an active foreign exchange market and foreign currency hedging instruments include over-the-counter instruments as well as exchange-traded instruments. Options are widely available, with American-style options more common. Interest-rate hedging instruments are widely available, with swaps, forward rate agreements and options all in common use. Exotic derivatives are also widely available from local and foreign banks.


Ministry of Finance

Ministry of Trade and Industry

Monetary Authority of Singapore

Inland Revenue Authority of Singapore

Department of Statistics Singapore

Singapore International Chamber of Commerce

International Enterprise Singapore

Singapore Economic Development Board

Singapore Exchange

ASEAN Bankers’ Association

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