Singapore is one of the most influential financial centers in the Asia-Pacific region. Furthermore, according to the International Monetary Fund, Singapore ranks at the top in financial system stability assessments due to its strong economic policies, sound financial framework, and commitment to implementing international standards.
In light of this and many other attractive qualities, international companies and startups commonly choose to establish their operations in Singapore. The following will introduce the relevant knowledge, specific steps, and considerations for opening an offshore bank account in Singapore.
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What is an Offshore Bank Account?
In recent years, the term “offshore” has been used to refer to opaque business operations and has even become synonymous with tax evasion in distant countries. In reality, the concept of offshore can refer to anything outside a person’s country of origin.
In this sense, an offshore company is an entity that operates in another country. An offshore bank account follows the same logic, for example, a corporate bank account opened in a different jurisdiction from the parent company to serve the business operations of a subsidiary.
Different parts of the world have their own tax and financial systems, and certain systems can offer advantages for company operations. However, this does not mean that operating an offshore company or opening an offshore account is necessarily for tax evasion, money laundering, or other illegal activities, as offshore banking requires a high degree of compliance.
Offshore Banking in Singapore
As mentioned above, an offshore bank account is a bank account regulated by a foreign jurisdiction. Therefore, for foreigners, i.e., non-residents of Singapore, banks located in Singapore can be considered offshore banks. However, it must be emphasized that local regulations in both the home and foreign jurisdictions should be complied with at all times to avoid conflicts or legal liabilities.
Having explored the concept and related knowledge of “offshore” in detail, we will now introduce the specific details for foreign citizens to open an offshore bank account.
Requirements for Opening an Offshore Bank Account
Singapore’s financial services are quite diverse, with numerous financial institutions, including foreign and local Singaporean banks, offering a variety of services and supporting the opening of various types of bank accounts. However, these services may be primarily aimed at Singapore residents or business owners of companies registered in Singapore.
Therefore, this article will focus on how to open an offshore corporate or business bank account in Singapore.
Most banks located in Singapore have similar requirements when they receive an application to open an offshore bank account for business operations. Generally, the bank’s requirements include:
- Interview with directors and signatories: Company directors are usually required to have an interview with a bank manager and be physically present to sign documents. Some international banks with overseas branches may allow directors to complete the interview and document signing without entering Singapore, but this applies only in very few or special cases.
- Corporate documents: Since the bank account will be used for business operations, the bank will need to review several corporate documents to assess the application and decide whether to provide the service.
- Identification documents: As part of their compliance standards, banks may also require detailed information about individuals related to the company’s internal structure.
Depending on the chosen banking institution, other requirements may need to be met or additional documents provided to complete the bank account opening assessment. Additionally, some banks may require a minimum initial deposit for the account, and this fee may be non-refundable.
Below, we will focus on the steps to open an offshore bank account in Singapore.
How to Open an Offshore Bank Account in Singapore
To apply for a corporate bank account in Singapore, the most fundamental requirement is to have an established business entity recognized within Singapore’s jurisdiction. One of the most standard practices is to set up a Singapore offshore company, i.e., a subsidiary.
With that point clarified, here are the specific steps to apply for a corporate bank account in Singapore:
- Find the banking institution that best suits your personal circumstances and company needs.
- Review the bank’s requirements and prepare the supporting documents.
- Schedule an interview with the bank.
- Directors and signatories attend the bank interview.
- Wait for the bank to inform you whether the interview was successful or if additional information is needed.
- If the application is successful, activate the bank account.
Different banks offer different services and benefits, such as multi-currency accounts, personalized customer service, and other financial and banking services. Furthermore, the speed of document preparation and submission will also affect the account opening timeline. Generally, it takes about 1 to 2 months from the submission of documents.
Documents Required to Open an Offshore Bank Account
Before scheduling an interview, bank staff will typically first review the supporting documents submitted by the applicant, commonly known as the document package. This package may include:
- Bank account opening forms.
- Board of directors’ resolution to open a bank account (usually prepared by the corporate secretary).
- Bank forms for authorized signatories.
- A certified true copy of the Certificate of Incorporation.
- A certified true copy of the company’s business profile.
- A certified true copy of the Memorandum and Articles of Association (MAA).
- Passports and proof of residential address for directors, bank signatories, and Ultimate Beneficial Owners (UBOs). If original documents cannot be provided, the corporate secretary can provide certified true copies.
- Relevant documents of the domestic company (transaction invoices and purchase orders may need to be provided to the bank).
It should be noted that the Certificate of Incorporation is provided by the Accounting and Corporate Regulatory Authority (ACRA), as it is the supreme authority overseeing matters related to entities registered in Singapore. Additionally, the bank may request additional documents based on the specific circumstances of each company.
Conclusion
Opening an offshore bank account in Singapore is not an impossible task, but it requires thorough preparation, otherwise, the situation can become complicated.
In this situation, it is best to contact a corporate secretarial service provider for guidance on the application process and document preparation.
The process may be slightly complex, but having a corporate bank account in Singapore helps in conducting business smoothly.
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