BoardRoom People Expertise: Payroll Case Study

Payroll Expertise

BoardRoom People Expertise: Payroll Case Study

Client Profile

The Client is a multinational company that owns some of the world’s most iconic beverage brands that are enjoyed globally.

The Asia-Pacific branches make up almost one-fifth of their operations, where BoardRoom is currently the payroll outsourcing provider for 10 countries – Singapore, Australia, Japan, Korea, China, Taiwan, Thailand, Vietnam, Indonesia and Myanmar. In total, we are responsible for 100% of their APAC workforce, which totals 1687 employees.

Payroll Challenges

One of the challenges MNCs face when expanding or maintaining payroll operations within Asia-Pacific is the lack of understanding between subtle nuances across labour governance frameworks in the region.

About BoardRoom

17
Countries

We provide Payroll Outsourcing services across 17 countries, including Singapore, Malaysia, Australia, Hong Kong & Mainland China

24,000
employees

We take care of the payrolls of almost 24,000 employees across Asia Pacific

100%
first-time accuracy

100% first-time accuracy for payroll processing

01 Ensuring Compliance to Latest Payroll Regulations

With its diverse cultural landscape, Asia-Pacific is well-known for its intricate payroll needs that often require specialised knowledge. Payroll regulations change frequently, which can prove challenging for HR teams to keep track of, especially if they’re unfamiliar with the country’s labour laws. This lack of knowledge can negatively impact companies through payroll fines and dissatisfied employees that experience payroll miscalculations.

This is especially challenging for larger companies due to their diverse employee payroll profile which requires an in-depth knowledge of the different payroll calculations and deductions for each employee. As a result, some HR teams in MNCs can struggle to ensure payroll compliance while also performing administratively heavy tasks such as checking and dispersing wages.

02 Impact on Productivity

When operating across multiple countries, payroll processing can often be done in siloes by individual payroll teams resulting in a lack of standardization across processes and workflow. Moreover, as companies expand into new markets, it can be challenging for the HR management to maintain oversight with every country and or states unique legal and social landscape. This can reduce productivity of HR teams as more effort is required to check errors and ensure accuracy.

Companies with rapid expansion plans might find it hard to build their HR administrative operations within the quick timeframe required to meet growth ambitions. The Client recognised this fact and identified the need for an experienced regional payroll outsourcing partner who could support their growth across Asia-Pacific.

The Solution

With the above challenges in mind, BoardRoom focused on how we could streamline their payroll operations. With our expertise in processing payroll for large multi-national companies across the Asia-pacific region, we support them as they continue to grow.

01 Ready Access to Regulatory Advice

The first step was ensuring that they could access the depth of regional knowledge and expertise that the BoardRoom team possesses. Companies spanning multiple jurisdictions require timely guidance on regulatory updates or necessary deductions, which BoardRoom provides. From advice on ad-hoc bonus payouts and the deductions required or what reliefs for payroll-related taxes that the company can qualify for, BoardRoom has the expertise to advise accordingly. In addition, our team’s experience and expertise enables us to analyse existing HR frameworks and optimize processes for the best payroll performance.

02 Standardised Framework

Next, we looked into centralizing standard payroll operations across the APAC branches, meaning they were able to shift away from siloed payroll processing. Through analysis of existing structures, BoardRoom made informed recommendations to assist in streamlining of processes. This helped boost efficiency of their regional payroll processing and provide more control and foresight for planning.

Capitalise on BoardRoom’s Asia-Pacific payroll experience today

As a global company, payroll compliance is challenging to maintain consistently across the APAC region. That’s why picking the right payroll outsourcing partner is essential to keeping your payroll processing as compliant as possible. A reliable partner like BoardRoom will be able to:

  • Guide you on specific local payroll advice across the region
  • Advise you on regulatory concerns and relevant updates
  • Help you standardize processes across the region

Are you interested in engaging our expertise to optimize your regional payroll processing? Reach out to us to discuss in greater detail how you can capitalise on our experienced regional payroll experts.

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How to Start a Business in Singapore

how to start a business in Singapore

How to Start a Business in Singapore

How to Start a Business in Singapore

Thinking of starting a business in Singapore? You’re not alone. As the legal landscape in Hong Kong continues to evolve, many companies are choosing to set up second headquarters in Singapore. And it’s easy to see why when the country is:

  • consistently rated by the World Bank as the best country in Asia to do business and the second best nation in the world to do business;
  • ranked first in the world for political and operational stability in the Global Innovation Index 2020; and
  • ranked first in the Asia Pacific (APAC) region and fifth in the world for economic competitiveness by the IMD World Competitiveness Yearbook 2021.

Expanding into a new international market is exciting for any business, but it also presents its own set of significant challenges. For many executives, the first hurdle is understanding how the company formation regulations and processes work in the new jurisdiction.

Our guide below gives you an overview of everything you need to know about how to start a business in Singapore.

Singapore Market Profile

Office rental pricing: Average monthly rent for grade A office space in Singapore was $SGD 9.90 per square foot for the second quarter of 2021.

Average office space density: 10m2 per person

Fixed internet download speed: 256.03 megabits per second in July 2021

Mobile internet download speed: 85.93 megabits per second in July 2021

Gross Domestic Product US$ bn: 340

Population (million): 5.70

Official languages: there are four official languages spoken in Singapore including:

  • English;
  • Chinese;
  • Malay; and
  • Tamil.
what language is spoken in Singapore

Benefits of setting up a company in Singapore

As one of the largest business centres in Asia, Singapore offers many benefits to companies looking to establish a presence in the region, including:

  • Attractive tax structure: Singapore’s corporate tax is fixed at a competitive rate of 17% on chargeable income, whether a company is local or foreign. There are several corporate tax relief schemes available, including:

Tax Exemption Scheme for New Start-up Companies

Qualifying companies are given the following tax exemptions for the first three consecutive years of assessment (YAs) where the YA falls in:

YA 2020 onwards
  • 75% exemption on the first $100,000 of normal chargeable income; and
  • A further 50% exemption on the next $100,000 of normal chargeable income.
YA 2010–2019
  • Full exemption on the first $100,000 of normal chargeable income; and
  • A further 50% exemption on the next $200,000 of normal chargeable income

Partial Tax Exemption for all companies

All companies, including companies limited by guarantee, can enjoy the following tax exemption:

YA 2020 onwards
  • 75% exemption on the first $10,000 of normal chargeable income; and
  • A further 50% exemption on the next $190,000 of normal chargeable income.
YA 2010–2019
  • 75% tax exemption on the first $10,000 of normal chargeable income; and
  • A further 50% exemption on the next $290,000 of normal chargeable income.

Corporate Income Tax Rebate

Given to all companies:

YA 2020 onwards
  • 75% exemption on the first $10,000 of normal chargeable income; and
  • A further 50% exemption on the next $190,000 of normal chargeable income.
YA 2013–2019

In addition, there are many corporate tax incentives available to foster economic growth within the country. Our expert tax team here at BoardRoom can advise you on the tax incentives your company may qualify for.

Singapore does not tax capital gains on the sale of fixed assets or foreign exchange on capital transactions.

However, companies (irrespective of tax residency) operating in Singapore are taxed on income sourced in the country and foreign income when remitted to and received in Singapore.

But, as the Inland Revenue Authority of Singapore (IRAS) states:

Companies that are Singapore tax residents can enjoy tax breaks on foreign income as follows:

a. Upfront exemption or reduction in tax imposed on the foreign income, when foreign income is derived in a jurisdiction that has an Avoidance of Double Taxation Agreement (DTA) with Singapore;
b. Tax exemption of specified foreign income such as foreign-sourced dividends, branch profits and service income; and
c. Foreign tax credit for the taxes paid in the foreign jurisdiction against the Singapore tax payable on the same income.

Singapore business competition
  • Highly competitive economy: Singapore is one of the most competitive economies in the world, ranking first in the Asia Pacific (APAC) region and fifth in the world for economic competitiveness by the IMD World Competitiveness Yearbook 2021.
  • No foreign ownership restrictions: 100% of the shares of incorporated companies in Singapore can be owned by foreigners or foreign companies (except for broadcasting and domestic news media). There are no export tariffs and foreign exchange controls in Singapore, but there are import tariffs on:
    • intoxicating liquors;
    • tobacco products;
    • motor vehicles;
    • petroleum products; and
    • biodiesel blends.
  • Bilingual business communication: English is widely used in Singapore, making it easier for foreign investors to establish companies within the region.

How to establish a company in Singapore

Here is our step-by-step guide for how to register a business in Singapore:

01 Choose a company type

The two most common company types for businesses operating in Singapore are:

  1. Limited Liability Company: This entity type means that a business is set up as its own legal entity. Foreign investors often prefer this type because it offers limited liability for business owners. Companies can be limited by shares or by guarantee.
  2. Foreign Company Office: Foreign companies can register in Singapore as either a representative office or a branch office. Neither option creates a separate legal entity, however, so all liability extends to the parent company.

02 Give your company a name

Your company must avoid choosing a name that is:

  • the same as an existing business name already approved by the Accounting and Corporate Regulatory Authority (ACRA);
  • undesirable ie., names which are vulgar, obscene or offensive; and
  • prohibited by order of the Minister for Finance.

You can search the online business and company name register in Singapore, BizFile, to check if your preferred name is available.

03 Set up your company structure

Next, you need to determine the structure of your company per the following requirements:

  • Directors: a minimum of at least one person. One director needs to be a natural person (ie. an individual). Directors must be aged 18 years or older and be either:
    • a Singaporean citizen; or
    • permanent resident; or
    • a person with an Employment Pass; or
    • a person with an Entrepreneur Pass (EntrePass).

To satisfy your local director requirements in Singapore, we provide a nominee director service.

  • Shareholders: a minimum of at least one shareholder. 100% of shares can be foreign-owned.
  • Company secretary: a sole director must not act as the company secretary. To register a company in Singapore, you must appoint a natural person who lives in Singapore as a company secretary.

We provide expert company secretarial services so that your company can meet all of its statutory obligations in Singapore.

  • Share capital: the minimum issued capital must be at least $SGD1.
  • Registered address: must be a physical address in Singapore, not a P.O. Box. If your business does not yet have local office space, professional service firms like BoardRoom can provide your company with a registered office location.

04 Submit company registration application

A foreigner looking to operate a business in Singapore that is venture-backed or owns innovative technologies is eligible to apply for an EntrePass. This will allow them to submit their application online through BizFile. However, foreigners without an EntrePass should consider engaging with the services of a registered filing agent, such as BoardRoom.

05 Make other permit and business licence applications (if applicable)

Depending on the type of business you operate, you may need to apply for other permits and business licences. Find more information about permits and licences here.

how to open a business in singapore as a foreigner

How to successfully open a business in Singapore

While it can be complex, the process of opening a business in Singapore as a foreigner doesn’t have to be difficult. Our team of company incorporation experts at BoardRoom can guide you through every step of the incorporation journey to make it as smooth and seamless as possible.

Not only can our team help you incorporate with ease, but we can also take care of your company secretarial needs.

Speak to one of our specialists today to get started in setting up your business in Singapore.

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Payroll Compliance: Keeping Abreast of the Evolving APAC Landscape for Global Organisations

Payroll Compliance APAC

Payroll Compliance: Keeping Abreast of the Evolving APAC Landscape for Global Organisations

Payroll Compliance: Keeping Abreast of the Evolving APAC Landscape for Global Organisations

Compliance is more than just a box-ticking exercise – it is the building block of credibility and reliability for organisations, particularly companies with a multinational presence who are subject to greater scrutiny.

Our Payroll Associate Director, Prem, deep dives into the various strategies you can implement today that mitigate your risk of non-compliance when processing payroll across multiple jurisdictions.

Key takeaways from the video includes:

  • What questions organisations should ask when assessing payroll outsourcing vendors to determine they are keeping up with changing regulatory landscapes.
  • How global organisations can stay up to date with evolving payroll needs.
  • Which countries in APAC have the most complicated employment requirements.

Click here to play the video

More about Prem

Prem V. Kumar has over a decade of experience in payroll management across APAC.

His expertise lies in organisation and he has a gift for breaking down the specific talents and roles needed to optimise the efficiency of payroll processing. As the Regional Payroll Associate Director, he is responsible for ensuring a seamless regional payroll processing experience for clients who operate across several jurisdictions.

Some of the key projects that Prem was responsible for includes the end to end overseeing of a regional payroll project of over 12,000 headcounts. Today, he has cultivated a well-rounded regional payroll team who are responsible for some of our bigger clients.

Are you interested in learning more about navigating through the complex payroll requirements in the APAC region? Reach out to our payroll experts today to learn more.

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Payroll Process: Setting your HR Team Up for Success

Payroll processing

Payroll Process: Setting your HR Team Up for Success

Payroll Process: Setting your HR Team Up for Success

Numerous studies have proven that a continuous delay in employee’s salary distribution can impact their job satisfaction. That’s why timely payments are vital in maintaining good workforce morale and can decrease turnover rates in many organisations.

However, it’s no easy feat to keep payroll running efficiently whilst ensuring that precision is not sacrificed for prompt salary disbursements. While achieving a zero margin of error is not possible, there are still some ways that payroll processes can be enhanced to reduce the likelihood of miscalculations.

Watch the video below where our payroll expert, Prem, Regional Payroll Associate Director, shares with us tips on how organisations can process their payroll with a low margin of error.

Click here to play video

More about Prem

Prem V. Kumar has over a decade of experience in payroll management across APAC.

His expertise lies in organisation and he has a gift for breaking down the specific talents and roles needed to optimise the efficiency of payroll processing. As the Regional Payroll Associate Director, he is responsible for ensuring a seamless regional payroll processing experience for clients who operate across several jurisdictions.

Some of the key projects that Prem was responsible for includes the end to end overseeing of a regional payroll project of over 12,000 headcounts. Today, he has cultivated a well-rounded regional payroll team who are responsible for some of our bigger clients.

Speak to our payroll experts today to find out how BoardRoom can enhance your payroll processing.

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Payroll process steps in Singapore: your questions answered

payroll process steps

Payroll process steps in Singapore: your questions answered

The payroll process steps in Singapore: your questions answered

Small payroll errors can have massive repercussions in Singapore, including expensive fines, reputational damage and employee dissatisfaction. That’s why knowing the payroll process steps and understanding payroll compliance obligations is critical to operating successfully in the country.

To help your company stay compliant, our team of payroll experts have answered your most pressing payroll process questions.

1. What information do I need for payroll in Singapore?

To set up employees on your company’s payroll in Singapore, you need their:

  • full name;
  • date of birth;
  • date hired;
  • immigration status;
  • identification number;
  • current job start date;
  • pay frequency;
  • pay currency;
  • pay amount;
  • self-help group contribution status;
  • payment method; and
  • bank account details.

2. What are the working conditions and wage requirements in Singapore?

  • Working hours: employees in Singapore work either:
    • a nine-hour workday with an average working week of no longer than 44 hours, and (most commonly) two days off per week; or
    • an eight-hour workday, working six days a week.
  • Pay cycles: salaries in Singapore are typically paid monthly.
  • Minimum wages: there is no minimum wage in Singapore. Salaries are negotiated and mutually agreed upon by employees and employers.
  • Overtime, rest day and holiday pay rates: overtime is paid at 1.5 times the employee’s hourly basic rate of pay. This rate is capped at the salary level of $2,600 or an hourly rate of $13.60 (excluding manual labourers).

Employees can work up to 72 hours of overtime per month. Rest days and public holiday pay rates vary depending on several factors outlined here.

 

wage requirement in Singapore

3. What are the holiday and leave requirements for payroll?

  • Paid holidays: there are 11 gazetted public holidays per year.
  • Annual leave entitlements: employees are entitled to between 7-14 days of paid annual leave, depending on their length of service with the company.
  • Sick leave entitlements: employees are entitled to between 5-14 days of paid outpatient sick leave and 15-60 days of paid hospitalisation sick leave, depending on their length of service with the company.
  • Maternity leave entitlements: new mothers are entitled to 16 weeks of paid maternity leave if:
    • their child is a Singaporean citizen;
    • they have previously worked for the employer for three continuous months before the birth; and
    • they have given their employer at least one week’s notice before going on maternity leave.

Employers can submit reimbursement claims to the government under the Government-Paid Maternity Leave Scheme.

  • Paternity leave: government-paid paternity leave of two weeks is available for employees if:
    • their child is a Singaporean citizen;
    • they have previously worked for the employer for three continuous months before the birth; and
    • they are or had been lawfully married to the child’s mother between conception and birth.
  • Childcare leave entitlements: parents of Singaporean citizens are entitled to six days of paid childcare leave per year. Parents of non-Singaporean citizens are entitled to up to two days of paid childcare leave per year. However, to be eligible:
    • their youngest child must be under seven years of age; and
    • the parents must have been working with their employer for at least three continuous months.

Employers will pay the first three days, and the government pays for the remaining three days.

  • Unpaid infant care leave entitlements: parents of Singaporean citizens are entitled to six days of unpaid infant care leave per year. However, to be eligible:
    • their child must be under two years of age; and
    • the parents must have been working with their employer for at least three continuous months.
  • Other non-compulsory leave types: Employees can also apply for the following optional leave types. They are not statutory requirements but subject to employer approval:
    • marriage leave: typically three days paid leave per year
    • compassionate leave: typically two to three days of paid leave per year
    • birthday leave: one day of paid leave per year
    • exam leave: typically two days of leave per subject
    • eldercare leave: at the discretion of employers. Public service agencies currently offer two days of paid parental care leave per year.

4. What social security and statutory contributions must employers make?

  • Central Provident Fund (CPF): employers and most employees (Singaporean citizens or permanent residents only) must contribute to the CPF retirement benefits scheme.

The CPF contribution rate for employees varies depending on their monthly salary, whereas the employer contribution rate for employees aged up to 55 years is 17%.

  • Self-Help Group (SHG) Funds: these are voluntary employee contributions to less privileged and low-income households of the communities that each employee is a part of. There are four SHG funds:
    • Chinese Development Assistance Council Fund (CDAC);
    • Eurasian Community Fund (ECF);
    • Mosque Building and Mendaki Fund (MBMF); and
    • Singapore Indian Development Association Fund (SINDA).

Employers deduct the SHG contributions from employee wages. The contribution rates vary per fund but range from $0.50–$30 per month.

  • Skills Development Levy (SDL): employers are required to contribute SDL for all their employees (irrespective of their immigration status) up to the first $4,500 of each employee’s total monthly wages.

The levy rate for SDL is 0.25% or a minimum of $2 (for total wages of $800 or less). This supports training and workforce upgrade programs.

  • Foreign Worker Levy (FWL): this levy applies to foreign workers with a Work Permit or S Pass Holders. It does not apply to employees under Employment Pass (EP).

The FWL rate varies depending on:

    • industry type;
    • whether the employee has a Work Permit or an S Pass;
    • employee skill level; and
    • the number of foreign workers employed within the company.

More information on the FWL is available here.

 

Social Security Payroll

5. Are payslips mandatory in Singapore?

Yes. According to the Ministry of Manpower in Singapore, “employers must issue itemised payslips to all employees covered by the Employment Act.”

6. Is ‘13th month pay’ mandatory in Singapore?

No. 13th month pay is not mandatory in Singapore, but it is the cultural business norm.

7. Do all employees have to be on payroll?

All employees covered by the Employment Act must have payslips; therefore, they must all be on payroll.

8. Can I do payroll myself?

Of course. However, the process is a lot easier, simpler and more accurate when you outsource payroll to a specialist provider like BoardRoom.

9. Do employers pay taxes on payroll?

Employers in Singapore are not required to withhold taxes from an employee’s salary. However, employers must withhold tax for foreign workers for at least one month if they cease working in Singapore, or if they leave Singapore for longer than three months.As discussed above, employers must also make social security and statutory contributions for their employees.

In addition, many employers also offer some form of private health insurance for their employees. While this is not mandatory it is a cultural business norm in Singapore.

Singapore Payroll

Want expert help in processing your company’s payroll in Singapore?

As you can see from the information above, many complexities surround the payroll process steps in Singapore. This makes it extremely challenging for companies with offices in the country to remain compliant.

Moreover, payroll compliance regulations change frequently, so staying up to date can be complicated and time-consuming, especially if your company has a high-volume payroll.

We can help you to create an efficient, accurate and compliant payroll process.

Speak to our specialist team today to organise a free payroll health check and find out how to reduce payroll costs and compliance risks for your company.

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