Due to the difficult economic situation worldwide, especially after the banking crisis in Cyprus, the interest in opening a bank account in Singapore has grown significantly and continues unabated to this day. Due to an increasing demand for account openings, in 2013, Singapore banks tightened their approach to the consideration of applications from non-residents. Some banks in Singapore, for example, Standard Chartered and ANZ Bank ceased to accept applications from companies where their account signatories were foreigners.
This article will focus on banks in Singapore that still accept non-resident account signatories and highlight the advantages of having a bank account there.
Advantages of Opening a Bank Account in Singapore
Some of the most noteworthy benefits banks in Singapore are:
- The Reliability of the Banking System
Singapore is one of the largest financial centers in the world with the most advanced and stable banking sectors. The banking system in Singapore is considered among the safest in the world and has never experienced failure even in times of economic turbulence. Singapore’s government has the top AAA credit rating from all major rating agencies.
- A High Level of Banking Secrecy
Banking secrecy is a fundamental factor in determining the daily operation of an entire banking system. Banking Secrecy is governed by the strict Banking Act of Singapore.
It is important to remember, that Singapore has committed to start automatic information sharing with foreign authorities from 2018 in accordance with an agreement signed by more than 51 countries to end tax evasion.
- The Quality of Banking Services
Easy to navigate internet banking, reasonable tariffs, the lack of restrictions on cash withdrawals from the Singaporean dollar accounts, opening of multicurrency accounts, no capital controls and English speaking customer support – these are the main advantages of banking facilities in Singapore.
Choosing a Bank
Many banks in Singapore- both local and international- allow non-residents and foreign companies to open accounts, however, some limitations are imposed. E.g. US residents or citizens of CIS countries can be accepted by the bank only in the case of their business being conducted in Singapore.
Before choosing a bank in Singapore you should be aware that visiting the bank in person will be required and it is impossible to set up an account without being present in person. In case of an account being opened for the company, in addition to the standard set of corporate documents, the personal presence of the company’s beneficiary and/or directors will be required. Usually, the checklist with all necessary documents and application forms can be downloaded and completed from the banks’ websites.
So, the first thing you need to do is to pick the right bank. Even though Singapore has about 30 major banks, we suggest the following three banks: DBS, OCBC and UOB Bank.
Development Bank of Singapore (DBS)
DBS is one of the largest banks in Singapore. Initially, it was created by the Government of Singapore as the Development Bank of Singapore, and is now the largest bank in Southeast Asia by assets, as well as the leading financial services group in Asia. Ratings of the bank in terms of capital “AA” and credit rating “Aa1” are one of the highest in the Southeast region. DBS has been voted as "Asia's Best Bank" by The Banker magazine and “Best Managed Bank in Asia-Pacific by the Asian Banker.
When opening a business account, the bank will always review the business activity of the company, including detailed information about the company’s contractors, expected turnover and number of transactions on the account. If a company’s activities are not clear, then the bankers will automatically make it more difficult to open a bank account- your chances will be reduced. Furthermore, in order to better understand the nature of the potential client’s business, the bank will require a face-to-face meeting with the beneficial owners and at least two directors of the company before they can open the business account. For other directors who are unable to travel to Singapore, they will require verified signatures by the notary public.
DBS accepts applications from both Singapore and foreign companies (Sole Proprietorships, Partnerships, Limited Liability Partnerships and Private/Limited Companies), including classic offshore jurisdictions like BVI, Nevis or Belize.
An initial deposit of USD/EUR 50,000 or the equivalent will be required, upon opening the account. A one-time search fee of $300 minimum (for a Singapore incorporated company), $500 (for a foreign incorporated company) and $1000 (for special purpose vehicle) is applicable upon the account being approved and opened. This fee is not refundable, even if the accounts are voluntarily closed shortly after.
With regard to personal accounts for foreigners, DBS Bank ceased to open current accounts for non-residents as of 2013.
Overseas China Banking Corporation (OCBC)
OCBC (Overseas China Banking Corporation) was established in 1932 by the merger of three local banks, the oldest of which was founded in 1912. Banking group OCBC, in addition to the local market, is aimed at the markets in Malaysia, Indonesia and mainland China.
According to the Bloomberg Markets ratings, OCBC Singapore is the most stable bank, next to which stand such giants as BOC Hong Kong Holdings and Canadian Imperial Bank of Commerce. In terms of assets, OCBC Singapore is the second financial group in Southeast Asia and one of the highest rated banks in the world according to Moody's Aa1 rating.
OCBC’s requirements for the opening of a bank account are almost identical to those of DBS. The beneficial owner of the account must visit for a personal interview in English. The bank accepts applications from Singapore and foreign companies, including classic offshore companies, such as BVI or Belize.
OCBC will require confirmation of the company’s business activity in the form of copies of invoices or contracts; if the business activity has not started as yet, be prepared as the Bank may request to provide business correspondence with prospective contractors.
There are minimum balance requirements for the companies:
1. For Singapore companies - SGD8000, USD500, EUR500.
2. For foreign companies (registered outside of Singapore) each foreign currency account should have a minimum balance of 30 000 units. That is, if the company is opening accounts in US dollars and Euros, the accounts must be no less than US $30,000 and €30,000.
If you wish to set up a personal account, it must be opened in Singapore dollars with a minimum balance requirement of SGD1000. Please note that for a foreigner it makes no sense to open a personal account in any other currency, because outgoing payments via OCBC’s Internet Banking are available only in Singapore dollars. In order to manage accounts in other currencies, the account signatory must personally visit the bank.
United Overseas Bank (UOB)
United Overseas Bank (UOB) is the local bank that accepts Singaporean companies that conduct their business from Singapore. It makes sense to choose this bank if your company has counterparties in Singapore only. UOB Bank may also consider customers who are planning to relocate to Singapore. The bank’s tariffs are higher than in DBS and OCBC.
Once you have chosen a bank, you will go through the standard account opening procedure. We suggest getting your paperwork ready and send it to the bank for pre-approval. As soon as your pre-approval has been received, you will make an appointment for a personal interview and arrange your visit to Singapore. Normally, it should take only a couple of hours for your face-to-face meeting and there is no need to stay in Singapore for more than 1 day. The final account approval usually takes about 7 - 10 working days.
Standard Chartered Bank (SC)
Standard Chartered Bank in Singapore is part of an international banking group that employs more than 90,000 people in 71 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, Europe and the Americas. The bank is one of the world's most international banks and listed on the London, Hong Kong and Mumbai stock exchange.
The industry experts Moody’s, Fitch and Standard and Poor’s consider Standard Chartered as a stable and A-rated bank. The Core Tier 1 capital ratio of the bank is 11,7%.
Every year, Standard Chartered Bank is recognised for its achievements in banking and finance. In 2015 the bank received an Excellent Service Award (EXSA). In 2014 the bank secured the award for "Best Consumer Internet Bank" at the Global Finance World’s Best Internet Banks Awards for the fifth consecutive year. The bank also won the award for "Best Internet Banking Initiative" at the Asian Banker Excellence in Retail Financial Services Awards in the year 2013.
Standard Charted Bank offers to its corporate and institutional clients, services in trade finance, cash management, lending, securities services, foreign exchange, debt capital markets and corporate finance. The Bank also provides private banking services through its private banking division and the bank's global business is managed out of Singapore, as is its global Technology & Operations function.
The requirements and conditions for a non-resident bank account opening are pretty much the same between all the banks in Singapore. In this article, we have reviewed only those banks where the account opening for non-residents is quite possible. In other banks, in our opinion, it is quite difficult- if not impossible- to set up an account. For example, to open a corporate account in Citi Bank, a key requirement for the applicant is proven annual turnover of at least two million Singaporean dollars. Or, as another example, we can take CIMB bank, which used to open accounts for non-residents, but no longer accepts business accounts with non-resident account signatories or beneficial owners.
Before travelling to Singapore we strongly recommend that you contact a number of the banks you are opening an account with to double-check their current policies and documentation requirements. Account opening in Singapore is not an easy procedure, and as such, we suggest using the assistance of professionals for the initial pre-approval with your chosen bank.