Starting a Business in Singapore? Essential Accounting and Tax Knowledge You Must Know

Want to start a business in Singapore? Understand all aspects of accounting and tax reporting!

Over the past few years, with changes in the global economic landscape and the deepening of regional economic integration, Singapore has become a preferred destination for more entrepreneurs and investors due to its stable environment, open market policies, and efficient business services. According to data released by Enterprise Singapore in 2025, as of June 2025, the number of new businesses in Singapore increased by 8.7% year-on-year, with foreign-owned companies accounting for more than 60%. This indicates that an increasing number of companies are choosing to establish branches or conduct business in Singapore.

However, for companies starting business in Singapore for the first time, knowledge of accounting and taxation is just as important as understanding local laws and market conditions. Accounting and tax reporting are not only the foundation of compliant operations but also a key part of long-term business development. This article will provide a comprehensive overview of the accounting and tax-related aspects you need to understand when starting a business in Singapore, covering topics such as the accounting system, tax filing process, common issues, and strategies for dealing with them.

Firstly, Singapore's accounting system is relatively mature and transparent, mainly based on the Companies Act and the Singapore Financial Reporting Standards SFRS. According to regulations, all companies registered in Singapore must establish a complete accounting system and prepare financial statements regularly. These statements typically include the balance sheet, income and expenditure statement, and cash flow statement, which reflect the company's financial condition and operating results.

Singapore's tax system is known for its low tax rates. The corporate income tax rate is 17% in 2025, much lower than in many other countries. However, it should be noted that this rate applies only to taxable income, not all types of income. For example, some eligible start-up companies can enjoy tax relief. According to an announcement from the Inland Revenue Authority of Singapore IRAS in March 2025, eligible small and medium-sized enterprises can enjoy up to 100% tax exemption on the first 500,000 SGD of taxable income in their first three financial years.

When filing taxes, companies usually do so quarterly or annually. For most companies, annual tax filing is the core task. According to IRAS regulations, companies must submit the Form C-S/SC tax return within 12 months after the end of each financial year. At the same time, companies must also pay withholding tax, goods and services tax GST, and other related taxes on time.

It is worth noting that in recent years, Singapore has been strengthening its regulatory oversight of corporate tax compliance. In 2025, IRAS launched a Tax Compliance Enhancement Program aimed at improving tax transparency and cracking down on tax evasion. This means that companies not only need to ensure the accuracy and authenticity of their financial data but should also establish sound internal audit and risk management mechanisms.

In practice, many companies choose to hire professional accounting firms to handle daily accounting and tax work. According to data from the Accounting and Corporate Regulatory Authority ACRA, as of 2025, there were more than 3,000 registered accounting firms in Singapore, offering comprehensive services including bookkeeping, tax planning, and financial audits. Choosing a reliable accounting firm can help save time and reduce tax risks effectively.

At the same time, with the development of digital technology, more and more companies are adopting electronic accounting systems and online tax filing platforms. For example, IRAS launched the MyTaxPortal online tax filing system, allowing companies to complete tax filings, pay taxes, and receive tax notifications through this platform. This approach not only improves efficiency but also reduces the chances of human error.

For foreign companies, it is also necessary to pay attention to cross-border tax issues. Singapore has signed double taxation agreements DTAs with many countries and regions to reduce the tax burden on companies operating across borders. For example, in 2025, Singapore and China signed a new tax agreement, further clarifying tax rules on transfer pricing, dividends, interest, and royalties. Companies should make full use of these policies to reasonably plan their tax structure and achieve legal tax savings.

In conclusion, accounting and tax management are essential aspects when starting a business in Singapore. Companies should fully understand the local accounting system and tax policies, plan their finances reasonably, and leverage professional support to improve compliance. Only in this way can they move forward steadily in a competitive market and achieve sustainable development.

If you are considering setting up a company or expanding your business in Singapore, it is recommended to consult professional accounting and tax advisors as early as possible to ensure all operations comply with local regulations and lay a solid foundation for the long-term development of your business.