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Legal
Registration of IOs & NGOs
International Organizations (IOs) and Non-Governmental Organizaations (NGOs) that are not-for-profit can be legally established with any one of the following set-ups:
Company Limited by Guarantee: A public company limited by guarantee is one which carries out non-profit making activities that have some basis of national or public interest, such as for promoting art, charity etc. This is the most common set-up for non-profit organizations in Singapore. The sum set aside as guarantee may be as low as S$1. Companies Limited by Guarantee need to register with the Accounting and Corporate Regulatory Authority (ACRA) and are governed by the Companies Act.
Society: A society is defined as a club, company, partnership or association of 10 or more persons, whatever its nature or object, and not already registered under any other law. There is no restriction on the nationality of members but a local contact address for the president and secretary of the society is necessary. Societies need to register with the Registrar of Societies (ROS) and are governed by the Societies Act.
Branch: A company that is incorporated outside Singapore has to register a branch in Singapore before it can commence business here. Branches are regulated in accordance with the Companies Act. A branch may be liable to certain taxes such as corporate tax and goods & services tax. Branches must also be registered with the Accounting and Corporate Regulatory Authority (ACRA).
Representative Office (RO): An RO can be incorporated to undertake promotional and liaison activities on behalf of its parent company. The RO must not be engaged in business, conclude contracts, provide consultancy for a fee, undertake transhipment of goods, or open or negotiate any letters of credit. Approval for the establishment of a RO must be obtained from International Enterprise (IE) Singapore.
Charitable Purpose Trust: A trust is a fiduciary relationship whereby the Settlor passes/transfers his assets to another (“Trustee”) such that the Trustee takes legal title to the assets/property, and will hold such assets/property for the benefit of charitable purposes. Trustee companies, which can be employed to manage trusts, are licensed by the Monetary Authority of Singapore (MAS) and are governed by the Trust Companies Act.
Charity Status and Regulations
1. IOs and NGOs with charitable objectives are eligible to apply for incentives under the Charity Status and the Institution of Public Character Status within 3 months of incorporation in Singapore. Charitable purposes can be classified into 4 main categories:-
i. the relief of poverty
ii. the advancement of education
iii. the advancement of religion
iv. other purposes beneficial to the community with the following purposes explicitly recognised as charitable:
- the advancement of health;
- the advancement of citizenship or community development;
- the advancement of arts, heritage or science;
- the advancement of environmental protection or improvement;
- the relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantages; and
- the advancement of animal welfare.
All charities in Singapore are governed by the Charities Act . Details of the conditions, application process and the application forms can be found on the Singapore government’s Charity Portal website.
Fundraising
In Singapore, any organization that wishes to conduct a fund-raising appeal must apply for a fund-raising permit from the Commissioner of Charities no less than 30 days before the planned commencement of the appeal. A separate application is expected for every appeal, but a longer-term permit can be considered on a case-by-case basis. If funds are raised through direct solicitation from the general public, 80% of the net proceeds raised within Singapore must be applied within Singapore. This percentage is also negotiable on a case-by-case basis. If funds are raised from private donors, no such restriction applies. As a rule, the fund-raising expenses should not exceed 30% of the total funds raised.
More information on fundraising and applying for a fundraising permit can be found at the Charity Portal (click on “Fund-raising Permit” on the left-hand side).
Double tax deduction
Registered charities which spend their funds raised in Singapore wholly on charitable purposes within Singapore may consider application for status as an Institution of Public Character (IPC). An IPC has the advantage of being able to issue tax-deductible receipts to donors. IPCs are governed by a stricter set of regulations than charities, which can be found here.
Tax
Income tax exemption for:
Charities
All registered charities in Singapore are automatically exempt from income tax.
Societies
Societies registered with the Registrar of Societies and associations registered as company limited by guarantee are exempt from income tax if surplus funds are from members’ contributions; or if over 50% of gross revenue receipts are from members and are not tax-deductible for members. Societies are liable to tax on other sources of income (e.g. interest income).
Foreign Charitable Trusts
If a trust created solely charitable purposes has its assets/funds completely from foreign companies/individuals, the income earned by the trust is exempt from income tax. Further, income derived by an approved trustee company from the provision of qualifying trust services for the FCT is taxed at a concessionary tax rate of 10%.
Non-Profit Organizations which do not fall under any of the above categories may apply for tax exemption through an incentive scheme administered by the IO Programme Office. Tax exemption under this scheme will be evaluated and granted on a case-by-case basis, dependent on factors such as the size, scope and complexity of operations in Singapore.
Organizations set up as for-profit companies are subject to a corporate tax rate of 18%. They may apply also apply through the IO Programme Office for a more favourable tax rate, granted on a case-by-case basis.
Legal Counsel & Corporate Services
To assist in corporate and legal matters, including registration in Singapore, compliance with regulations, and non-profit corporate governance, there are a variety of established and experienced firms to choose from.
The following is a list of firms that would be able to assist potential investors. Note that this is a non-exhaustive sample, and does not imply EDB’s specific endorsement of the services rendered by the firms on this list, nor lack of support for firms not listed here:
Drew & Napier LLC
20 Raffles Place
#17-00 Ocean Towers
Singapore 048620
Tel: 6535 0733
www.drewnapier.com
Rajah & Tann
4 Battery Road
#26-01 Bank of China Building
Singapore 049908
Tel: 6535 3600
www.rajahtann.com
Rodyk & Davidson LLP
80 Raffles Place
#33-00 UOB Plaza 1
Singapore 048624
Tel: 6225 2626
www.rodyk.com
KCS Corporate Services Pte Ltd
36 Robinson Road #17-01 City House
Singapore 068877
Tel: 6311 3233
www.kcs.com
Portcullis Trustnet Pte Ltd
6 Temasek Boulevard #09-05 Suntec Tower Four
Singapore 038986
Tel: 6496 0496
www.portcullis-trustnet.com
GCSL Pte Ltd
20 Cecil Street #15-06 Equity Plaza
Singapore 049705
Tel: 6339 1881
www.gcsl.info
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Infrastructure
Space
There are numerous locations within Singapore to base an IO operation, from prime office space in the central business district, to nondescript converted bungalows and shophouses outside the city centre, to warehouse space near our airport and seaport.
In addition to stand-alone office space, there exist IO clusters across the island, where non-profit organizations of similar nature co-locate, reaping benefits through such avenues as inter-organizational linkages, shared facilities, and subsidized rentals. These clusters range from a space carved out for IOs and think tanks in one of our major university campuses, offices with highly-subsidized rentals on top of a popular shopping mall, and a set of converted bungalows in our Botanic Gardens for environment-focused IOs. Plans for more such clusters are in the pipeline.
Logistics
Singapore is one of the best connected countries in the world, with all the sea, air and telecommunications links needed for an effective international operation.
PSA Corporation, the busiest container port in the world, offers shippers a choice of 200 shipping lines with links to some 600 ports in 123 countries.
Changi International Airport is linked to 182 cities in 57 countries, with more than 4,000 weekly flights ferrying passengers and cargo to and from all parts of the world.
Within Singapore, a broadband network reaches 99 per cent of the population. International and regional connectivity now stands at 27.6 Tbps to more than 100 countries.
Organizations have tapped on Singapore’s capabilities in this field to establish key regional operations here. In the aftermath of the 2004 Asian Tsunami, Worldvision established their Asia Tsunami Response Team (ATRT) in Singapore. From their base here, they swiftly and efficiently delivered critical aid and assistance to affected peoples in Sri Lanka, India, Indonesia, Myanmar, and Thailand.
Education and Research
A crucial driver of the IO sector is the availability of top talent in non-profit management and leadership. Singapore, in addition to building up world-class academic institutions, also aims to be a hub for non-profit talent in Asia.
The Social Service Training Institute (SSTI) conducts a full range of courses for non-profit managers and workers alike, offering both certificate programs and full degrees.
Our Polytechnics, premier tertiary training grounds, are increasingly exploring the area of non-profits and social enterprises, offering courses catering to these areas.
Universities such as the Singapore Management University (SMU), as well as private foundations such as the Lien Foundation are also committed to supporting a vibrant talent pool for IOs in Singapore.
As both local and regional talents increasingly seek to make a difference in society with their career choices, academic institutions in Singapore are providing just the right infrastructure to meet the need.
In terms of research, Singapore aims to be both a research hub and thought leader in the IO and non-profit sector. In addition to university research, leading think-tanks such as the Institute of Policy Studies (IPS), Institute of South-East Asian Studies (ISEAS), Lien Foundation Centre for Social Innovation (LFCSI), and Lee Kuan Yew School of Public Policy (LKYSPP) conduct in-depth research into the environment and trends surrounding social, environmental and non-profit issues in Asia.
Moving forward, there are plans to bring in top non-profit management programs from across the globe, so as to give the best talent from all over Asia and beyond a suitable training ground in Singapore. The leading research institutions are also looking to Singapore as a base to conduct much-needed research into the Asian non-profit sector.
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- Live, Work and Play
Consistently ranked among the top places globally to live, work and play, Singapore offers an experience like no other. A truly multi-cultural society where passionate individuals from the East and West congregate, living and working together seamlessly, a diverse mix of talents adding to the unique local flavour. With an efficient and convenient transport infrastructure, a highly-respected education system, and a clean and peaceful environment, all for a cost of living still below most other first-world capitals, it is no wonder so many executives and their families have come to call this island city "home".
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