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Everything you need to know about setting up and succeeding in Singapore
Consulting services
Personal Income Tax Payment
How to Pay Personal Income Tax
Corporate Strategic Business/Product/Service Development Planning
Through brainstorming and training, FOZL Consulting will help define the business/product/investment/service development and expansion blueprint for company owners or senior management. This is important for businesses because they can define investment and resource needs, as well as returns and key performance indicators (KPIs).
• Company Vision, Mission, and Objectives
• Product and service definition through planned brainstorming sessions
• Guidance and analysis of work plans and business models
• 1/3/5-year work plans and key performance indicators
The goal is to define the company for customers in three core areas, which will drive your company/subsidiary's growth plans and how internal and external parties view the company's direction.
This will influence the company's direction, branding, promotion, etc.
Mission
What kind of company does the company want to be? What or who is it created for?
Vision
How do you want to impact the world or others in what aspects?
Values
Internal values will drive your business actions, such as products, prices, employees, etc.
Market Research
When foreign companies invest or expand into new markets, it is crucial to understand the regulations, market conditions, and ecosystem of the new market from the perspectives of costs and benefits, risks and potential. With sufficient and accurate information, company owners or senior management will have the confidence to make informed investment decisions. FOZL can provide customized market feasibility studies based on the unique requirements of the business, thereby reducing opportunity and time costs. The areas of research we can provide for clients include:
Benefit analysis of tax costs
Trade - Transfer Pricing Report
Certificate of Origin (COO)
Singapore Industry/Product Certificate
Singapore Industry Ecosystem Analysis
- One of the main conditions to be met when applying for COO certification in Singapore
- Fully obtained materials such as planting, breeding, and utilization of recycled materials
- Manufactured in Singapore with a local content of at least 25% based on the finished product ex-factory price
- Changes in tariff classification at the 6-digit level (i.e., tariff subheading changes)
- Chemical reactions occur (tariff subheading 27-40)
Singapore has currently implemented more than 23 agreements.
The recently implemented free trade agreement is the Regional Comprehensive Economic Partnership
(RCEP) - 16 Indo-Pacific countries - Australia,
Brunei Darussalam, Cambodia, China, India, Indonesia,
Japan, Republic of Korea, Laos, Malaysia, Myanmar, New Zealand,
Philippines, Singapore, Thailand, and Vietnam
Mergers and Acquisitions Consulting Services
Grow your business through inorganic growth such as mergers and acquisitions, partnerships, and strategic alliances to expand your business value
As a "bridge" between foreign companies and ASEAN companies, FOZL will be able to help clients leverage our network to find suitable acquisition targets or partners.
Understanding client needs and collaborating with consultants with expertise in multiple fields, we can help determine the appropriate acquisition/sale project value, which is beneficial to both buyers and sellers, while also streamlining the negotiation process.
FOZL will provide services to clients in a structured manner, from strategic target selection, due diligence, valuation, transaction structuring, to fundraising.
Consultation/Contact
For information on the services provided, please email wf@fozl.sg to schedule a free consultation.
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Inquiry Details
Acquirer Consulting
In 2019, the total value of mergers and acquisitions in Singapore reached US$35.3 billion, a 125% increase compared to 2018. This is because Singapore is considered a safe and secure country, so many assets are arranged to be held in Singapore. In addition, more than US$36.3 billion in overseas funds have also been deposited in Singapore. This creates an ecosystem of buyers and sellers, with buyers looking for assets with untapped capital growth potential and sellers respectively using the sale of assets for cash flow.
To enable businesses to successfully acquire targets, FOZL will assist clients in a structured manner to determine client needs, analyze acquisition targets, assist in negotiations with acquisition targets, etc.
The following diagram shows a typical M&A process.
Application Policy Consulting
In today's complex business and regulatory environment, businesses need to understand and leverage government policies to enhance their business and expand their horizons.
FOZL consultants strive to help clients understand the latest developments and policies in Singapore. This allows clients to grasp crucial information in a timely manner for company decision-making. We provide comprehensive solutions to meet all the needs of businesses expanding in ASEAN. At the same time, we help clients screen and apply for suitable support policies and tax policies from relevant government departments, such as (but not limited to):
Economic Development Board (EDB)
Enterprise Singapore (ESG)
Maritime and Port Authority of Singapore (MPA)
Monetary Authority of Singapore (MAS)
Government Support Policies and Tax Policy Application Support
Our consultants have extensive experience in planning and execution and can assist clients in applying for and negotiating government policies and related terms. The key application process and work summary are as follows. The entire process usually takes 3 to 6 months.
Application and Evaluation
Depending on the support and tax relief scheme applied for, the applying company needs to apply to and obtain approval from different government departments. For example: Economic Development Board, Enterprise Development Board, Monetary Authority of Singapore, Port Authority of Singapore, etc. These schemes and incentives are determined by each government department's own evaluation standards, and they can decide whether or not to implement them. Therefore, we need to consult with the specific government departments to review and approve the available incentives and schemes. In practice, some evaluation criteria include, but are not limited to: business expenditure in Singapore, manpower employed, revenue in Singapore, local shareholding ratio, and scope of activities conducted in Singapore, etc.
Global Trader Programme
General trade is the largest contributor to Singapore's economy, accounting for 17% of Singapore's GDP, valued at S$73.7 billion in 2018. General trade is also a major contributor to the finance, logistics and insurance sectors. In 2018, local business expenditure in the international trade sector was S$31 billion.
The Global Trader Programme (GTP) was launched in 2001. This programme reduces the corporate tax rate for companies with qualifying trading income to 5% or 10% over three or five years. Qualifying trading income includes income from physical trading, physical trading brokerage, derivatives trading, and structured commodity financing activities, treasury activities and advisory services related to mergers and acquisitions. This program is currently managed by the Economic Development Board (EDB) and Enterprise Singapore (ESG).
Eligibility Criteria and Incentives
International/Regional Headquarters Programme
The IHQ/FTC program is managed and overseen by the Economic Development Board (EDB) of Singapore. This policy mainly encourages companies to establish new businesses in Singapore or expand their businesses in Singapore, such as headquarters functions, R&D production, and fund management. Depending on the business plan applied for, the applying company can apply for the Pioneer Certificate Incentive (PCI), Development & Expansion Incentive (DEI) or Finance And Treasury Center (FTC) policies. International Headquarters Programme, Global Headquarters Programme, Regional Headquarters Programme.
Eligibility Criteria and Incentives
IHQ/FTC Application Process
*Note: The application time provided is an estimate and must also consider the internal approval processes of the client and the Singapore government.
Introduction to Transfer Pricing
Transfer pricing is an accounting practice used to describe the pricing of transactions between associated parties of a multinational corporate group. This can include the transfer of intellectual property, the sale of tangible goods, the provision of services, and loans or other financing transactions between business entities located in different countries. The definition of "associated parties" in transfer pricing varies depending on the specific regulations and context. According to Section 2(1) of the Singapore Income Tax Act [1*], two parties are considered "associated parties" if one directly or indirectly controls the other, or if they are both directly or indirectly controlled by another party. The tax law does not specify any control or ownership threshold to be considered an associated party. In contrast, Announcement [2016] No. 42 issued by the State Administration of Taxation of China sets out the standards and ownership thresholds for determining associated parties.
In recent years, transfer pricing has become a matter of ongoing global concern due to the increasing regulations and requirements on transfer pricing, the increasingly transparent tax environment and oversight, and strengthened cooperation with other tax jurisdictions. The Inland Revenue Authority of Singapore (IRAS) established transfer pricing documentation (TPD) requirements in Section 34F of the Income Tax Act in 2018, effective from the 2019 tax year (YA). Unless the taxpayer has an exemption, taxpayers meeting the following conditions must prepare contemporaneous transfer pricing documentation (TPD) to show that related party transactions are conducted at arm's length prices.
Conditions are:
- Total revenue from principal business (excluding investment/passive income and capital gains/losses) exceeding SGD10 million in the relevant base period/fiscal year.
- Transactions with related parties involving trade, loans, services, etc.
- Transfer pricing documentation is required to be prepared for the relevant base period/fiscal year.
Taxpayers are exempt from preparing transfer pricing documentation (TPD) if they meet one of the following exemption conditions:
- Transactions (excluding loans) with related parties in Singapore, where both parties are subject to the same Singapore corporate tax rate.
- Related party loans (any amount), where the lender does not conduct lending business and both parties are Singapore incorporated companies or conduct trade in Singapore.
- Related party loans not exceeding SGD15 million, where the lender does not conduct lending business, and the taxpayer applies the indicative margin set by IRAS and
- The taxpayer applies a 5% cost plus mark-up for routine support services [2*].
- Related party transactions covered by an Advance Pricing Agreement (APA).
- Where the specified type of related party transaction falls below a certain threshold. (For example: procurement of goods (trade type) not exceeding SGD15 million, service income/expenses (service type) not exceeding SGD10 million, etc.)
On August 10, 2021, the Inland Revenue Authority of Singapore (IRAS) revised its previously issued Transfer Pricing Guidelines (Sixth Edition), enhancing its power to audit taxpayers. Non-compliance with transfer pricing rules can result in substantial penalties and additional tax liabilities, as follows:
- Fines of up to SGD10,000 imposed on taxpayers
- IRAS has the power to make transfer pricing adjustments under Section 34D of the ITA, adjusting the taxable profits.
- Once IRAS makes a transfer pricing adjustment, a 5% surcharge is levied on that adjustment, regardless of whether the adjustment results in any tax payable.
[1*] For more information on the Singapore Income Tax Act, please refer to the URL link: https://sso.agc.gov.sg/Act/ITA1947
[2*] For more information on the categories of routine support services, please refer to Appendix C of the Transfer Pricing Guidelines on the IRAS website: https://www.iras.gov.sg/media/docs/default-source/e-tax/etaxguide_cit_transfer-pricing-guidelines_6th.pdf?sfvrsn=26bfb1a6_9
Conclusion
If you are worried about filing your taxes, FOZL has a small suggestion for you. You can consider purchasing accounting software—such as Xero—to help you with accounting and tax filing, reducing the need for manual processing. Or, you can also consider letting a professional service provider help you with your tax filing to ensure everything is done correctly.
Transfer Pricing Compliance
According to the Inland Revenue Authority of Singapore (IRAS), unless exempted, taxpayers must prepare and maintain contemporaneous Transfer Pricing Documentation (TPD) to ensure that related party transactions comply with the arm’s length principle [1*]. When preparing the documentation, the information and data used by the taxpayer to determine the transfer pricing should exist before or at the time of the transaction with the related party. In addition, Singapore taxpayers must ensure that the transfer pricing documentation is prepared before the tax filing deadline (November 30). IRAS has the right to request taxpayers to submit transfer pricing documentation within 30 days. Also, this transfer pricing documentation (TPD) must be retained for at least 5 years after the end of the transaction benchmark period.
According to the Singapore Income Tax Act, taxpayers must prepare a Master File and a Local File. These documents are based on the standards issued by the Organisation for Economic Co-operation and Development (OECD). At FOZL, we can assist you in preparing the relevant transfer pricing documentation and ensuring timely submission. In addition, we can also provide services in transfer pricing planning and tax structuring to help businesses effectively reduce the risk of non-compliance.
The transfer pricing services we provide to our clients include:
- Preparing Singapore transfer pricing documentation.
- Analysis of related party transactions and calculation of appropriate benchmark profit allocation or mark-up.
- Country-by-Country Reporting (CbCr) (limited to groups with income > SGD 1.125 billion and where the Ultimate Parent Entity/UPE is a Singapore entity).
[1*] Section 34F of the Singapore Income Tax Act, please refer to the URL link: https://sso.agc.gov.sg/Act/ITA1947?ProvIds=P17-#pr34F-
FOZL assists local and overseas clients in Singapore Registering Singapore companies and provides clients with Accounting ， Annual reviews ， Auditing ， Tax returns ， Trademark registration ， Business consulting ， Family offices Setup and other services.
If you would like to learn more, please Contact us at FOZL, we are dedicated to serving you!
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Singapore Office：6 Raffles Quay, #14-02——#14-07, Singapore 048580
Tel：+65 6717 0088
E-mail：marketing51@fozl.sg
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