Singapore has been actively attracting foreign direct investment (FDI) into the country and encouraging entrepreneurship among its population. Various government agencies have been taking initiatives in their respective fields that incentivise business owners to take action. In particular, the Inland Revenue Authority of Singapore (IRAS), the nation’s tax authority, has been instrumental in sweetening the deal for companies contemplating expansion into Singapore, as well as people intending to go into business.

Singapore already has one of the lowest corporate tax rates in the world. Standing at 17%, companies can devote more of their profits toward their operations and grow themselves. This compares well with the tax rates of other countries like United Kingdom (20%), United States (40%) and Australia (30%). In fact, the Singapore corporate tax rate has been falling steadily over the past decade. From 20% in 2005, it fell to 18% in 2008, then to 17% in 2010. The low tax rate has not only successfully attracted many multinational companies to set up base in Singapore but also encouraged many people to enter the business world, safe in the knowledge that they do not pay overly high taxes.

In addition to the low corporate tax rate, IRAS, as the tax agency is commonly known, has in place a set of tax incentives that make Singapore an even more attractive place to do business in. Under the Tax Exemption Scheme For New Start-Up Companies, newly-incorporated companies enjoy full exemption on the first $100,000 normal chargeable income, and another 50% exemption on the next $200,000 normal chargeable income, for the first three years of operation. This scheme is applicable to all companies that are not involved in investment holding and not developing properties for sale, investment or both. IRAS recognises that the startup phase of any business is the most crucial stage, and that giving businesses a hand in paying their taxes will help reduce their financial burden.

Another scheme worth noting is known as the Corporate Income Tax Rebate. As the name implies, this rebate aims to help businesses defray the rising cost of doing business. The rebate level was previously set at 30%, however, in response to the challenging business environment, the government enhanced the scheme in 2016. Valid for the Years of Assessments 2016 and 2017, all companies enjoy a 50% rebate on the payable corporate tax. The rebate will be capped at $20,000 per Year of Assessment. It is hoped that by helping companies reduce their corporate tax burden, they will be able to restructure and improve their finances.

Apart from tax incentives, IRAS has other schemes that aid employers in one way or another in doing business. For example, to allow companies to cope with rising labour costs, IRAS now co-funds 40% of wage increases given to Singaporean citizen employees earning up to $4,000. Even though it is a temporary measure, the Wage Credit Scheme (WCS) nonetheless helps companies in times of need. A popular grant that is given to companies is the Productivity and Innovation Credit (PIC) Scheme. Intended to help defray their operating costs, the government pays companies 40% of qualifying expenses. An interesting tax incentive that is targeted at bigger companies is the Mergers & Acquisitions (M&A) Scheme. In a bid to encourage companies to grow via mergers and acquisitions, the government has raised the cap for qualifying M&A deals from $20M to $40M. In addition to providing a 25% tax allowance on such deals, stamp duty relief is also given.

The above is but a short list of incentives and grants given by the Singapore government to encourage the growth of businesses. The government is going all out to not only woo foreign companies but also to get its people to go into business. It is up to them to respond and make the right choice.

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Every business owner knows the importance of bringing sales into the company and every entrepreneur realises the importance of growing the organisation. To achieve these aims, a business needs to track its figures. Figures do not only help one keep track of incoming and outgoing payments, they also allow Management to review monthly and quarterly performance to check on the health of the company. Accounting becomes a crucial and handy tool to help business with these important tasks.

Contrary to popular belief, accounting is more than punching numbers into a balance sheet or a profit-and-loss statement. While it is certainly true that basic data entry – a simple process using something even as rudimentary as a spreadsheet – suffices for a one-man setup running a blog shop, things become a lot more complicated when the business takes the form of a Private Limited company. It becomes even more so when multiple shareholders possess interests in the business. Running a Private Limited company entails keeping proper accounting records, so that revenue and expenses are properly accounted for and that annual filing is performed expeditiously and with accuracy. In an age where financial mismanagement plagues many established organisations and corporate governance is more important than ever, it is imperative that companies hire qualified accountants to take care of their financial matters.

There have been many cases in which aspiring entrepreneurs, driven by passion and enthusiasm, enter the world of business but do not ensure their back-end systems are adequately set up. In their misguided rush to incorporate their companies, they do not only fail to put operational structures in place, but also, more importantly, overlook the need to create proper accounting systems. This is especially true for small businesses providing personal services. Revenue and expenses are not recorded properly or at all, money is indiscriminately withdrawn from the corporate bank accounts to pay for the owners’ personal expenses, and there is absolutely no synchronisation between company accounts and bank statements. The entire business descends into a financial quagmire and when the time comes for annual filing, the business owners are hardly in a position to do so. By the time warning letters and threats of fines and legal proceedings arrive, it may be too late to reverse the course. It is thus very important for business owners to recognise the need for proper accounting early in the process.

Since the Singapore government created the Singapore Qualification Programme (Singapore QP) and the Singapore Accountancy Commission (SAC) in 2013, the level of professionalism in the accounting landscape has been raised. The qualifying examinations are now more rigourous and entry into this profession, more difficult, than before. The SAC, as the statutory board with oversight of the accountancy profession in Singapore, leads initiatives that raise the bar in this knowledge-based economy and make Singapore a global accountancy hub. Put together, these developments point to the creation of a robust system that upholds the high standards of corporate governance in the country. Notwithstanding the initiatives from the government, the intended aims can only be achieved if individual companies play their part to make themselves useful and responsible corporate citizens. By hiring properly-qualified Chartered Accountants of Singapore (CA Singapore), business owners ensure that their accounting needs are seen to with the highest standards of accountability and accuracy. With a sound accounting system in place, their businesses will be able to grow and add value to the business ecosystem and the economy at large.

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