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When Opening Bank Account for a Singapore Company, When and to Whom to Pay Initial Deposit?
When Opening Bank Account for a Singapore Company, When and to Whom to Pay Initial Deposit?
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When opening bank account for a Singapore Company, when and to whom to pay initial deposit?
Singapore has a reputable financial industry—with an esteemed banking sector that is reliable enough to manage different financial structures, investments, and insurance laws. The efficient banking system of Singapore aids companies in handling their financial concerns. It also provides a more conducive environment for the economic ventures of the country. Due to these factors, many entrepreneurs have expressed their interest in establishing their companies in Singapore.
To fully commence one’s business operations, a company owner must undergo through the process of company incorporation first. Afterward, he or she must open a bank account for the company. A company bank account is essential and practical for keeping track of all the company finances and transactions.
When opening a company bank account in Singapore, an initial deposit will be required. The next concern now is “when” and “to whom.” This initial deposit is to be paid. Continue reading to find out what you should do in such case.
What Are the Two Mechanisms in Opening a Company Bank Account?
The process of opening a company bank account depends on each bank. The process can be classified into two mechanisms. Refer to the following examples below.
Mechanism A: No Upfront Deposit Will Be Required
This mechanism mandates the online transfer of the initial deposit after opening the company bank account. In this case, the bank will obtain all the forms filled out and signed by the company and process them internally. The bank will then open the company bank account and the company will be notified about it. Once the company has opened its bank account and it becomes fully active, the online transfer of an initial balance to its bank account (perhaps from the personal account of the company owner) will be required. This is the mechanism which is now a days used most often.
Mechanism B: Depositing Through a Check
However, some banks require the initial balance to be paid at the time of submitting bank account opening forms. This is the most commonly used mechanism in past, and still used today in many cases. If you are a foreign promoter residing in another country, then this mechanism would be very easy for you.
An initial deposit needs to be provided in the form of a check upon the submission of the application form. This mechanism is slightly troublesome as some practical issues may arise.
How Does Mechanism B Affect Foreign Promoters?
Singapore permanent residents or citizens typically do not experience any problems in providing checks as they already have their own personal bank accounts. Meanwhile, foreign promoters, who do not have their own personal bank accounts in Singapore, cannot provide checks in the name of their proposed companies. Even if they can, their checks would come from their home countries, which would not be acknowledged by the banking organization of Singapore.
What Should Foreign Promoters Do in This Case?
Foreign promoters can take help from their respective corporate services provider (CSP) to collect deposits in cash and issue checks in the name of the bank for the initial deposit and in return, make the payment of cash to them on their behalf. Basically, companies give them the cash and they will issue the check for the initial deposit.
The Verdict
Online transfer of the initial deposit is the new norm for Singapore companies bank account, especially during this time of the COVID-19 pandemic. Nevertheless, some banks may still need a check for the initial deposit. The process of opening a bank account can take up to three weeks or even more, depending on various circumstances.Foreigner Package
New Company Setup
S$2,400
Local Package
New Company Setup
S$1,100
Transfer Package
Existing Company
S$1,000
Singapore Branch
New Branch Setup
S$4,000
Representative Office
New Setup
S$2,500
BVI Company
Singapore Bank Account
US$2,200
