Opening a Corporate Bank Account in Singapore
This is a comprehensive article on opening a corporate bank account in Singapore. It provides an overview of the recent regulatory changes that affect bank account opening in Singapore and offers guidelines for navigating the new Customer Due Diligence procedures that banks have established. By following these guidelines, you can utilize the fast-track procedures our firm has established for opening your Singapore company's bank account quickly and easily.
As one of the leading financial centers of the world, Singapore offers world-class options in banking and related financial services for corporate clients. As a result of OECD Financial Regulation recommendations, Singapore banks have heightened their scrutiny of new clients, particularly foreigners. By understanding the reasons behind the new regulations, and preparing the necessary documents upfront, clients can navigate these "Know Your Client" checks effectively. CorporateServices.com has also established fast-track processing workflows with its partner banks in Singapore to streamline this process.
How about a digital bank account?
Key facts about banking in Singapore
Ease of banking and stability of the banking system is one of top considerations for businesses when choosing their base for operations. Below are some of the key facts that you should know about the banking industry in Singapore:
- Singapore is a well-regarded, triple-A rated economy. It is ranked as the world’s fourth leading financial centre in the most recent edition of the Global Financial Centres Index (GFCI). With the recent turmoil and unrest in Hong Kong, it is now considered the world's third-best financial centre behind London and New York City.
- Almost all banks in Singapore offer multi-currency accounts and secure internet banking. You are free to maintain funds and transaction in any currency. There are no restrictions on receiving funds or making payments internationally. Bank fees and minimum balance requirements vary from bank to bank. In general, the fees are globally competitive and fair.
- Nearly all major banks of the world have a presence in Singapore. In addition, Singapore is host to several highly-regarded and very well-capitalized domestic banks.
- Singapore’s banks are fully integrated into the global financial system and operate without any government-imposed financial controls on the movement of funds. As a result, a Singapore-based corporate bank account can receive funds from or send legal payments anywhere in the world efficiently.
- If you are just incorporating a shell company with no legitimate real business activity, you are less likely to succeed in opening a bank account in Singapore. On the other hand, if your reasons and purpose are legitimate and your business structure is transparent, your chances are high.
- A digital bank account such as Transferwise is becoming increasingly popular in Singapore. Many of our clients have fully switched to a digital banking account for all their needs due to the ease of operating the account and lower transaction fees.
Tighter scrutiny by traditional banks
A Club with Stricter Rules of Entry
A key reason Singapore’s banking system operates so smoothly is the careful vetting it performs to ensure that new participants in the system are trustworthy and honest players. In recent times, Singapore has implemented a robust regulatory framework and supervisory strategy to comply with anti-money laundering and counter-terrorism financing (AML/CTF) guidelines. According to the FATF’s latest report, Singapore stands out in its compliance — it was found to be Non-Compliant on not a single one of the 40 FATF recommendations.
This means that every Singapore bank has to perform a detailed “Know Your Client” assessment of all new applicants before it can accept them as clients. This is not a discretionary step — it is mandated by Singapore’s banking regulations. The Customer Due Diligence (CDD) process of banks involves verifying the identity and background of the company's key personnel, source of funds, legal structure of the company, nature of the company's business, etc.. Onboarding also includes checks for Politically Exposed Persons (PEP) and Adverse Media risk assessment in order to discover customers’ potential involvement in any corrupt or nefarious activities. If the CDD process raises any alerts, the banks can ask for additional clarifying information or deny the account opening outright. Singapore’s financial regulator — the Monetary Authority of Singapore — uses data analytics as a monitoring tool for its supervisory role. This involves the collection, aggregation, and analysis of financial data in order to detect suspicious transactions and patterns. Banks also want to make sure that there are genuine reasons for setting up the company in Singapore and that it's not functionality just as a shell entity.
How Does This Affect You?
The successful opening of a bank account is essential for the operation of any new business. One of the main purposes of existence for any commercial bank is to assist businesses to operate and manage their financial transactions. Therefore banks are in the business of opening bank accounts. In light of the new account opening regulations, you should know the following:
- While the rules are tighter now for foreigners, as long as you are setting up your company for proper economic and business reasons, you are not from a sanctioned country, and you have a straightforward legal structure of the company — it's possible to open a bank account for your company in Singapore. The key is to understand the bank's need to get to know you and your business. By law, banks must perform customer due diligence in order to comply with regulations designed to combat money laundering and terrorist financing. Banks have to ferret out the few bad apples from the vast majority of bona fide businesses. They have to figure out if a new client company may be a front for conducting money laundering; this is a difficult task especially in the case of a start-up since there is no business history or records to refer to. Therefore, banks need detailed information and documents from companies to better understand their business and risk profiles.
- For the reasons explained below in this guide, if you are a foreigner, banks will take a bit longer to complete their Customer Due Diligence (CDD). Fortunately, more and more banks are opening up to conducting a video interview instead of requiring an in-personal meeting in Singapore. This allows our clients to incorporate and open a bank account without visiting Singapore.
- While evaluating the account opening application, banks will make a holistic assessment of the client's risk profile that covers a range of factors including the complexity of legal structure, the background of company beneficiaries and directors, nature and geography of business activities, representative clients and suppliers, and profile of transactional activity. Your ability to supply the necessary information to the bank will be the key to a successful account opening decision.
Introduction from a Trusted Relationship Helps
CorporateServices.com has a long-standing trust relationship with many of the leading banks of Singapore including OCBC Bank, DBS Bank, UOB Bank, Standard Chartered Bank, and Citibank. Since we perform proactive CDD on our clients to preempt most of the questions that a bank may raise and filter out clients who may have an undesirable risk profile, Singapore banks have had a very positive experience with CorproateServices.com customers. Given this history, our bank partners have created fast-track account opening procedures for our clients. While these procedures will not eliminate CDD by the bank, they will ensure that our clients receive a prompt review and a quick account opening decision.
Your guidance for opening our bank account was invaluable. With our complex holding structure it would have taken us weeks to get through the Due Diligence checks, but with your guidance and recommendation, we got it all done in one meeting. Thanks!
Information requested by banks
For Locally-owned Singapore Companies
For companies owned by Singaporeans, the information requirements are extremely simple. With our fast-track procedure, your account can be opened online with our selected partner banks on the same day. Our CSP system will connect you directly with our partner bank online to get your bank account opened. If you have a SingPass, no other documents will be necessary for opening your company's bank account.
For Foreign-owned Singapore Companies
Since data about foreign nationals is not readily available to Singapore banks from the Singapore government's information system, banks must collect more detailed information from foreign clients about their identification, professional background, and their proposed business venture. Collection, verification and vetting of this information can take some time for banks. Consequently, it can take a few weeks to open the bank account when a company is owned by foreign nationals. However, our CSP platform will facilitate the collection and transmission of all information to our banking partners.
The bank will require the following information and documents from foreign nationals:
- Proof of registration of the Singapore company. Our system integration with our partner banks allows us to directly provide this information to them.
- Proof of identification and residential address for each of the company shareholders, ultimate beneficial owners, and directors. Since we already collect this information as part of our client KYC process, banks are able to retrieve this information from our CSP system directly.
- Background of Ultimate Beneficial Owners. This information can be provided in the form of a Curriculum Vitae, a Website, or a Biography writeup.
- Company Information. The more information you can provide, the better. Information can include: proposed business activities and business plan of the company, potential clients and suppliers, anticipated banking transactional activity, etc. Banks prefer to discuss this information with the company representatives directly during their video call or in-person meeting.
Same day account opening - Fact or Gimmick?
Same day corporate bank account opening is possible ONLY for companies that are wholly-owned by Singapore residents. If any incorporation firm is promising an instantaneous (or nearly instantaneous) bank account opening for a foreign-owned company, be very skeptical of such claims. The Singapore regulations simply do not permit fast-track processing of bank account opening for foreign-owned entities at present. For the reasons described earlier in this article, banks need a longer period to vet information about foreign nationals; therefore, the process takes up to a few weeks.
While opening a new bank account, it helps to understand the objectives that the bank’s CDD is attempting to achieve — at the simplest level, the bank wants to verify that the account applicants are who they say they are. This is usually done through a review of the official identification documents. The bank also wants to understand the nature and source of the funds that will be deposited into the account — information about the company’s business model and the professional background of its key executives can help establish this understanding. Since Singapore’s government information systems store most of its data in electronic forms, it is easy for the banks to verify this information for a Singaporean resident but the same is not the case for a foreigner. Therefore, foreign-owned or foreign-managed companies face a more detailed and time-consuming examination by the banks.
Account opening checklist
Below are some guidelines that will help you prepare the information necessary for a smooth bank account opening experience.
- Pick the right bank: Choose a bank that will provide financial services that are suitable for your business operation. By choosing a bank and account that is congruous to your company, you can significantly reduce future banking-related problems. A wide range of banking products are available in Singapore; once you have engaged our services, your customer service executive at CorporateServices.com can help you pick a suitable bank. Typically, you should consider the following:
- You anticipated volume of banking transactions
- Initial capital you will deposit with the bank
- Average minimum monthly balance you intend to maintain at the bank
- Additional financial services your business may need
- Minimum account balance requirements of the account
- Your customer service executive can provide more information.
- Provide all information upfront: Keep in mind that “more is better”. The more information you can provide the bank about yourself and your company’s plans, the easier it will be for the bank to understand your business model. Provide information about your business activities, your prior professional experience, potential clients, and the nature of your banking transactions, link to your website, and a business plan for your proposed business if you have one handy. If easily available, provide reference letters from previous business banking relationships. If there is anything complex in your background or your shareholder structure, anticipate the questions that may come up and preempt them by providing clarifying information proactively.
- Be truthful: This is the most important guideline — be honest and truthful in the information you provide. If the bank discovers anything that is not accurate, it will affect your credibility and make it difficult to work with the bank. You should never come across as evasive, deceptive, or untruthful.
- Answer the Who, How, and Whom questions: The bank is interested in learning the following a) who are the key people involved in the business, b) how did they make the initial capital of the company and how do they plan to make money in the future, and c) to whom will they be sending money as part of their business.
Frequently Asked Questions
Major banks in Singapore
As one of the world's top four financial center, Singapore offers a wide choice of financial services. It is home to more than 100 commercial banks, 28 merchant banks, 25 investment banks, and numerous private banks. Singapore's monetary authorities carefully monitor the capital adequacy and leverage ratios for all locally-incorporated bank to ensure their safety. All depositor funds are insured by SDIC. Below is a list of banks that are suitable for corporate clients; it includes the banks with whom CorporateServices.com has developed a fast-track partnership relationship.
DBS is included on CorporateServices.com's panel of recommended partner banks.
Formerly known as the Development Bank of Singapore, DBS is Singapore's leading bank and has consistently been ranked as the safest bank in Asia. As measured by total assets, it is the largest bank in Singapore. DBS serves more than 10 million customers and has nearly 30,000 employees. The bank provides a full panel of services that include retail banking, corporate banking, and asset management services. It provides a special focus on SME customers. DBS has over 100 branches in Singapore and it also has branch offices in China, UAE, Hong Kong, India, Japan, Indonesia, Myanmar, South Korea, Malaysia, the Philippines, Taiwan, Thailand, Vietnam, the United Kingdom, and the United States.
OCBC is included on CorporateServices.com's panel of recommended partner banks.
Also known as the Oversea-Chinese Banking Corp Ltd, OCBC is the second-ranked bank in Singapore by total assets. It provides the full spectrum of financial services that include retail, corporate, merchant, investment and private banking. It also provides treasury and stock broking services, insurance products, wealth management services. OCBC aggressively targets the SME market and has very attractive financial products for this segment. Besides Singapore, OCBC operates in 18 countries through more than 600 branch offices including full service branches in Sydney (Australia) and London (the UK), and agencies in Los Angeles and New York (USA).
UOB is included on CorporateServices.com's panel of recommended partner banks.
United Overseas Bank (UOB) is Singapore's third-largest bank by assets. UOB is a full-service bank and provides excellent services for SME clients. Besides Singapore, it operates in Australia, Hong Kong, Brunei, Malaysia, the UK, Canada, USA, China, France, Thailand, India, Japan, Myanmar, Philippines, South Korea and Taiwan.
Standard Chartered is included on CorporateServices.com's panel of recommended partner banks.
Standard Chartered Bank (Singapore) Limited (SCBSL) is the largest foreign bank in Singapore. A British bank with a storied history that dates back to 1858, Standard Chartered was one of the first foreign banks to receive a licence in Singapore. It provides retail, commercial, corporate, and private banking services. Standard Chartered has deep roots in Asia and operates in more than 70 countries.
Citibank is included on CorporateServices.com's panel of recommended partner banks.
As the Singapore subsidiary of one of the largest banks of the world, Citibank Singapore Ltd, was the first American bank to begin operation in Singapore. It is the largest foreign banking employer in the country and offers a full menu of financial service products. Its parent company Citigroup Inc. operates in over 160 countries of the world.
HSBC is included on CorporateServices.com's panel of recommended partner banks.
HSBC Bank (Singapore) Limited, is Singapore's oldest bank. It is a wholly-owned subsidiary of British giant HSBC Holdings plc. It offers retail, commercial, private, and investment banking, wealth management, trustee and capital markets services, and full range of insurance products. By assets, it is the third largest foreign bank in the country.
RHB is included on CorporateServices.com's panel of recommended partner banks.
RHB Bank Berhad Singapore (RHBS) is a subsidiary of Malaysian RHB Bank, the fourth largest financial services provider in Malaysia. It is a full-service bank serving individuals and corporations for Commercial Banking, Wealth Management and Personal Financial Services, Corporate Banking, Treasury and Investment Banking.
Maybank Singapore Limited is a subsidiary of the Malaysian Maybank and it has been in operation in Singapore since 1960. It offers retail and commercial banking, SME banking, private banking and wealth management. Its parent company, Maybank, is one of the leading financial services groups in Asia, with branches in more than 20 countries.
State Bank of India, Singapore Co. (or SBI Singapore), started operations in 1977. It provides a broad array of retail and corporate products.
Bank of China
Bank of China Ltd, Singapore is a subsidiary of the Bank of China — one of the largest, state-run commercial banks in China. It holds a Qualifying Full Bank (QFB) licence and offers a wide range of financial services and products. It is particularly attractive for customers who operate in RMB currency.
DEXTER LIM Founder, KKOCH Global
The setup of my Singapore company was straightforward and quick, thanks to your well-designed online platform and your excellent staff... Their guidance and assistance for establishing my company’s banking relationship with OCBC was extremely helpful!
For every business, opening a bank account is a necessity and it is often the very first task after incorporating the business. In response to the AML and CTF regulations, Singapore banks have tightened their customer due diligence process to ensure that the bank account is used for legitimate business activities only.
CorporateServices.com has developed a trusted relationship with our banking partners that provides fast-track and streamlined processing of bank account opening for our clients. CorporateServices.com has implemented an online electronic protocol with these banks for immediate transmission of the account application information and supporting documents from our CSP Platform to the bank to enable fast-track processing..
Singapore's banking regulations have tightened significantly. Choose the firm banks trust and avoid any banking hassles later.
"OCBC’s collaboration with your team has dramatically streamlined the account opening process for new clients. The CSP software platform is a key enabler of this success."Denis Tan, Associate Director
Global Enterprise Banking, OCBC Bank
"... your team's communication has always been great. My company and the bank account were set up almost immediately."Akash Kamra,