In the last 30 years, Singapore has grown into a developing financial centre that serves both the local economy and also the Asia Pacific region, and even the wider world. Today, Singapore is successfully regarded by key financial services institutions and industry players as an ideal base to penetrate the markets.

As we have already known that Singapore’s location is in the heart of Asia Pacific, and that makes the country home to many financial institutions. Additionally, the country is a well-established international financial centre too. 

The latest Global Financial Centre Index shows Singapore as the third most competitive financial centre in the world, behind only London and New York. Singapore has also overtaken Japan to become the largest foreign exchange centre in Asia, and third largest globally.

The financial services sector is one of the most booming economic areas in Singapore, and moreover, a number of these financial institutions have also chosen the country as their global or regional headquarters.

This is largely assigned to the regulations passed by the Singaporean government that allows for the incorporation of the latest technological trends in the financial sector. As a result, many entrepreneurs including both local and foreign want to set up businesses in this sector.

As for doing business, especially in the financial services industry, there are some favourable regulations that you must follow. In this article, you will be given information on how you can start a business in the financial services sector!

Legislation on Companies in the Financial Sector

The licenses in the financial sector are provided by the Monetary Authority of Singapore (MAS). Regarding the legislation, the Finance Ministry of Singapore provides guidelines that companies in finance should follow strictly. There are types of businesses that you can start in the financial sector, and the following laws that you need to comply too!

• The Monetary Authority of Singapore Act → This act spells out all of the procedures that must be followed when starting a banking business in Singapore.
• The Banking Law → This spells out the regulations that all banking institutions must adhere to.
• The Securities, Future, Trust Companies, and Financial Advisers Acts → These acts provide the requirements for opening business that will be listed in the capital markets of Singapore.
• The Insurance Act → This act provides all of the requirements needed for setting up an insurance institution in Singapore.
• The Anti-Money Laundering Act → This act provides all of the activities that companies in this sector should tackle money laundering.

Before setting up a company, it is important to have a consultation with the experts on the required procedures and legal requirements for that specific business.

The Financial Services Companies in Singapore

Financial companies fall under the regulations of the Finance Companies Act in Singapore, they also provide credit facilities to Singapore and other corporations. These companies are not allowed to operate in foreign currency or even gold. You can only expand the scope of your activities if your request to the MAS is accepted.

There are several types of financial companies that you can establish in Singapore. They include banks, insurance companies, brokerage firms, investment firms and fintech companies. You will need the licenses for opening up a financial company in Singapore, and these companies that need licenses are:

• For local banks, wholesale banks, representative offices of foreign banks, branch offices, finance companies and financial holding companies.
• For exempt trust companies, for corporate finance advisers for fund management companies and licenses trust companies.
• For licensed and exempt financial advisers, as well as for exempt persons offering financial advisory services.
• For direct life and captive insurers and reinsurers and for captive general and life insurers.

Steps To Incorporate Financial Services in Singapore

Before setting up a financial company, you must meet all the company law requirements. This means the business must have at least one shareholder, one director, and a company secretary. However, all businesses must be registered with the Accounting & Corporate Regulatory Authority (ACRA) through Bizfile. It is an online registration and information portal, including individuals, firms or corporations that have a business for a foreign company.

The application will be processed immediately after its fee is paid, but may take between 14 days to 2 months if the application is referred for another agency to be approved or reviewed.

Moreover, there are 3 steps to register your business in the financial sector!

Step 1: Get The Company Name Approved

Before registering, all Singapore companies must first have their name approved by ACRA. The approval name is a simple online procedure, and the company name must be followed by the guidelines:

• The name cannot be identical to an existing business in Singapore
• The name must not infringe on any trademarks.
• The name cannot be obscene or vulgar.
• The name must not have been reserved by another company.

If the company name follows ACRA’s rules, it normally will be approved in less than an hour. In addition, when the process is approved, a company can reserve the name for up to 120 days. 

Step 2: Prepare The Company Registration Documents

After the name approval, a company must get the following documents ready before registering the business. 

Documents required by ACRA:

• Company Constitution, previously known as Articles of Association.
• Signed Consent to Act as a Director for each director.
• Signed Consent to Act as Company Secretary by the company secretary.
• Identification and residential address details for each shareholder and officer of the company.

All the documents above must be in English or officially translated into English.

Step 3: Register with Singapore Company Registrar, ACRA

Once the documents are prepared, a company can be officially registered with ACRA. The registration process is online and takes less than an hour. However, in rare cases, if the company registration has to be referred to another government agency for further review, the process can take a few weeks.

Incorporate financial services or companies in Singapore is relatively easy as long as you understand the law and what company type that you want to have. Additionally, you need to prepare the official documents to register your company. If you are unsure or find the difficulty to keep it up, you may contact us below. Viettonkin will always be ready to assist you anytime!

Singapore has been well known in many fields at the top of the world, whether it is entertainment, governance and tourism. Singapore is also commonly known as a financial hub not only within the region, but across the world as well.

Over the past 50 years, Singapore has established itself as a reputable financial center that offers to both the local economy and the Asia Pacific region. It’s no wonder to us that Singapore is considered as one of the most attractive markets to go among investors and financiers around the world. This makes Singapore a financial hub in Southeast Asia.

Overview of Singapore as an Asian Financial Hub

As an international financial hub, the country is home to over 1.200 financial institutions which offer a lineup of products and services across multiple asset classes.

According to the Singapore Department of Statistics (DOS), the financial and insurance services sector claimed the first spot in terms of FDI volume S$927.890 million in 2018. It accounted for 53.45% of the total FDI value. 

The sector indeed has continuously grown since 2014. Moreover, the value of FDI flows into this sector rose by 22% compared to 2017 and 30% compared to 2016. In 2019, the sector has ranked fourth as it accounted for 13.9% of the total GDP. This was equivalent to S$70.56 billion.

The banking sector in Singapore is also growing. The country had a total asset size of approximately S$2 trillion in 2014. More than 200 banks are currently operating there, and more foreign banks choose Singapore to be their regional headquarters, as the country starts to be a global platform for banking services.

Meanwhile, the 3 dominant local banks such as DBS Bank Ltd, Overseas-Chinese Banking Corporation Ltd (OCBC) and United Overseas Bank Ltd (UOB), are ranked highly in Bloomberg’s list of the world’s strongest banks.

According to the 2016 Bank for International Settlements Triennial Central Bank Survey, Singapore’s Foreign Exchange Market was ranked the 3rd largest in the world by turnover, behind the United Kingdom (1st) and the United States (2nd). The average daily volume of Foreign Exchange Turnover and Foreign Exchange Derivatives Turnover reached US$419.2 billion and US$87.3 billion respectively in April 2016.

To add more reasons, why Singapore is known as the Asian financial hub. Singapore’s asset management industry registered a relatively good expansion of 5.4% to S$3.4 trillion, or US$2.5 trillion in 2018. Then, Singapore continues to serve as the Global-Asia gateway for asset managers and investors to tap the region’s worth opportunities, with 75% of assets under management (AUM) sourced from outside of the country in 2018.

According to Singapore Business Review’s annual survey of the Insurance sector, total assets of the 50 largest providers in the city reached S$232 billion in 2018, an increase of 13.73% from the previous year which was S$204 billion.

Not only in the conventional financial sector, Singapore is also putting time and effort to establish itself as a leading global fintech hub. In 2019, it was home to more than 50 innovation labs. The financial technology (fintech) sector received a record high of S$1 billion in 2019. 

On September 30, 2019, Singapore claimed the 1st spot ASEAN in both funding value and the number of deals, accounting for more than half (51%) of each category. The country then continues to be the preferred base of fintech firms. The total fintech firms in Singapore as of September 30, 2019 were 1157 firms.

Reasons Why Singapore Is an Asian Financial Hub

In 2020, Singapore has improved on the “dealing with construction permits” criterion. It made dealing with construction permits easier by enhancing its risk-based approach to inspections, improving public information, and the process to obtain a construction permit. It’s the ease of doing business there.

Other than that, we will give you detailed information below in getting to know more about Singapore as an Asian Financial Hub!

1. Conducive Pro-Business Environment

The Monetary Authority of Singapore (MAS), established as a legal board in 1971, is responsible for the supervision and development of the Singapore financial service sector. The MAS also functions as Singapore’s central bank, formulation and implementing the policy.

The regulation and rigorous supervision have earned investor confidence in the Singapore financial system. It has resulted in financial stability, even amidst turmoil such as the 2007-2008 global financial crisis.

In addition, the support from the government is endless. The Singaporean government has introduced several incentives to attract more players to the financial sector and encourage the development of this sector.

For example, in 2017, the government removed the currency, counterparty and investment instruments restrictions in the existing Financial Sector Incentive (FSI).

In helping to the adverse effect from the Covid-19 on the financial and insurance services sector, MAS has announced a $125 million support package for firms in this sector to deal with the challenges from Covid-19 and to recover for the future growth.

2. Skilled Workforce

The key reason for financial institutions to operate in Singapore is, to have a large pool of finance professionals in the financial services industry.

In order to ensure the continued availability of skilled labour, the Institute of Banking and Finance Singapore (IBF) and Workforce Singapore (WSG) introduced a program, including a structured training and attachment schemes to equip professionals with essential skill sets that would help them thrive in the financial industry.

3. The Competitive Cost and Business Infrastructure

The cost of doing business such as wages and rental has steadily risen. However, office rental in Singapore remained significantly lower than the leading rival financial centers, such as London, New York, Hong Kong, and Tokyo.

Speaking about infrastructure, Singapore has a well-established set of an efficient public transport system and advanced ICT infrastructure. It ranked 1st in the world for the transport infrastructure, it has also a world-renowned aviation hub, and a busy global port hub.

Moreover, Singapore has ranked 1st in Asia in terms of digital infrastructure in the world, regarding technological readiness. It has the fastest broadband speeds in the world with a 159% mobile penetration rate.

These factors definitely make a strong idea for foreign investors to set up a businesses, as Singapore is always ready to embrace new and more contemporary markets. So, if you want to have a business in Singapore, you will not regret it as it has a great business environment, skilled workforce, and great financial sectors, and you would get the benefit in the future! If you need any help for setting up a company in South East Asia, Viettonkin Consulting able to help you!

Acquisition and merger between companies today bring benefits to both parties, especially for those who would like to make an entry to a foreign market. One of the advantages is to create greater financial power and more influence. As a result, foreign companies incorporating financial services are researching and finding ways to incorporate in Vietnam, which can meet the demand of money circulation, meet the cash flow needs and measure all financial situations in enterprises. This article will provide you with how to incorporate a business in Vietnam in general and how to incorporate financial services in particular.

What is the incorporation of a company?

The incorporation of a company refers to the legal process that is used to form a corporate entity or a company. An incorporated company is a separate legal entity on its own, recognized by the law. These corporations can be identified with terms like ‘Inc’ or ‘Limited’ in their names. It becomes a corporate legal entity completely separate from its owners.

Why incorporate?

Everyone knows how great are benefits that a corporation brings to the owner. Furthermore, there are other reasons why the corporation proves to be an attractive vehicle for carrying on a business. Let’s examine them:

• Owners are protected from personal liability from company debts and obligations.
• Corporations have a reliable body of legal precedent to guide owners and managers.
• Corporations are the best vehicle for eventual public companies.
• Corporations can more easily raise capital through the sale of securities.
• Corporations can easily transfer ownership through the transfer of securities.
• Corporations can have an unlimited life.

How to incorporate a company in Vietnam?

For many foreign investors whose targets are in Vietnam, the knowledge of incorporation procedures is strictly required to subject to. In Vietnam,  a business founder has to follow four main steps of procedures for business establishment and registration as follows:

Step1: Prepare information for your business profile

1. Choose your type of business. There are 4 main types of business you can consider which are  Sole Proprietorships, Partnerships, Limited Liability Companies (LLC), and Corporations. 

2. Prepare notarized copies of your ID card or passport. Notarized copies of ID card no longer than 3 months and its validity period is not more than 15 years.

3. Determine your company’s name and address of your office. The founder of the company must not name the enterprise that is identical or confusingly similar to the name of another company registered in the national enterprise registration database, except for dissolved or court entities. bankruptcy declaration (according to the provisions of Clause 2, Article 42 of the Law on Enterprises).

4. Determine the regulation of capital.

5. Determine the title of the company representative (e.g the manager or director).

6. Determine the main business lines. You need to specify whether your business needs additional conditions (legal capital, other regulations, etc).

Step 2: Conduct the incorporation phase

1. Compile the company profile

The necessary company profile includes:

• Application form for business registration
• Draft of Company's regulations
• Shareholders and Founders list
• Authenticated papers of members, legal representatives 
• Valid personal identification papers of authorized representatives and legal representatives
• Legal capital certificate
• A valid copy of the practising certificate and ID card of the person who has a practising certificate for enterprises conducting business lines that require a practising certificate. 

2. Submit a company file at the provincial business registration office.

3. In case of authorization to submit, a letter of authorization is required.

4. To be granted an enterprise registration certificate after 5 days after receiving the dossier.

Step 3: Procedures for registering the entity seal

1. Take a copy of the enterprise registration certificate to an agency that has the function of carving the seal to perform the seal of a legal entity for the company.

2. The legal entity seal will be transferred to the provincial/municipal police agency for checking the registration and giving the seal to the enterprise.

3. When receiving the seal, the representative of the business brings the enterprise registration certificate (the original) and presents the ID card.

Step 4: Procedures after the business incorporation

1. Conduct the initial tax return

2. Register a tax return via the internet.

3. Submit the return and license tax.

4. Submit the notice of the application of value-added tax calculation method.

5. Conduct procedures for purchasing and ordering invoices.

6. Post or hang the invoice templates at the company headquarter. 

7. Prepare all business conditions for conditional business lines.

How to incorporate financial services in Vietnam  

Firstly, it must be affirmed that the process of setting up a basic financial company must base on the procedures of incorporating a business in Vietnam. However, since its business items are financial services, there are still some conditions required for the founders of the organization. With the first step of determining the type of your business, you should take a look at these five following types of finance companies: 

Types of financial services

1. State-owned finance company: a finance company with state capital investment, establishment, and organization of business management.

2. Joint-stock finance company:  a finance company being jointly contributed, established and organized by a business organization or individuals.

3. Finance company affiliated to credit institutions: a finance company established by a credit institution with its own capital and owner as prescribed by law, independent accounting and legal entity status.

4. Joint Venture finance company: a finance company established by contributing capital between Vietnam and foreign parties on the basis of a joint venture contract.

5. 100% foreign-owned finance company: a finance company established with a capital of one or more foreign credit institutions under the provisions of Vietnamese law.

Basically, procedures of incorporating a finance company bases on the general rules of incorporating a company. Nevertheless, there are compulsory conditions are required by the Vietnamese government to ensure the performance of the strict management of this business type.

Conditions for founders who are foreign credit organizations

1. Having total assets of more than US $ 10 billion at the end of the year prior to the time of filing, unless otherwise provided for by the bilateral investment agreement between Vietnam and the home country.

2. Business activities are healthy and safe; profitable in the year immediately preceding the year of proposing the establishment of financial company

3. In case a foreign credit institution is a bank, in addition to the above conditions, it must be a reputable bank, ranked by the international rating organization from average and stable level upwards, with bad debt ratio less than 3%.

For Vietnamese credit organizations

1. Maintain prudential ratios in operation as prescribed by law after contributing capital to financial companies;

2. Having total assets Having at least VND 50,000 billion, the ratio of bad debts to total outstanding loans is less than 3% at the time of applying for capital contribution to incorporate a financial company;

3. Not breaching the prudential regulations in operation according to the regulations of the State Bank of Vietnam for 6 consecutive months before the time of requesting the establishment of a financial company;

4. Business activities are healthy and safe; profitable in the year immediately preceding the year of proposing the establishment of a financial company.

In addition, you can understand about Vietnam FDI guide: 2019 - 2020 to get your needed pieces of information.

In conclusion, financial companies are making great contributions to the economy with the potential to provide flexible financial services that meet the growing demands of the economy. Therefore, the potential of establishment and development of these businesses is large, but it comes with the trouble if not following the process properly. It is believed that setting up your financial company will be smooth if you pay attention to this article.