Guide to opening business bank account in Singapore
The act of opening a business bank account is one of the first things you must do when starting a business. Your business bank account will serve as the hub for all of your company's financial activities, profits, accounts payable, employee payroll, and more. By law, whether you need one or not is determined by the nature of your business. However, having one is always a good idea. Even if it is a small business bank account, opening one is not as difficult as it appears.
Importance of business bank account
Business bank accounts are known by many names. They're also known as company bank accounts or corporate bank accounts. But they all mean the same thing. A business bank account is a separate account set up just for your company. It is the location where your company's funds are managed. You may also manage your other payments from here. This could include everything from payables to payrolls and credit repayments.
A business account can be a checking or savings account, comparable to the personal account options. It does, however, perform the critical function of keeping your payments distinct from your business's transactions. Furthermore, there are several advantages to having a business bank account (from the time of opening a business account to using a corporate account).
It is crucial to remember, that opening a business bank account is always a good idea, regardless of how small your company is. Many banking institutions provide additional support for small company bank accounts, including special incentives. As a result, there is no such thing as opening a corporate bank account “too early”.
How does business bank account work?
Business banking assists organizations and companies in making the best financial decisions possible. Business banking is a fast expanding area, as more and more businesses choose to have a corporate bank account. The goal is for these financial institutions to assist both large and small firms in making better use of their assets and making prudent financial decisions based on their current balance and creditworthiness.
One of the most crucial things is that business banking safeguards your company's position. Business bank accounts for LLCs and businesses are proof of your company's legitimacy. As a result, banks will provide your organization with extra services. Small-term loans, low-interest credit allowances, and even payroll administration are among the services available. Business banking is also safer and less vulnerable to fraud.
Things to consider when opening business account
A business bank account is not only accessible to the individual whose name appears on the documents. Bank facilities access will be required by your finance department, accountants, compliance officers, and even some employees. It's always a good idea to have a banking system with a powerful and easy-to-use web interface. Make sure they have a mobile app so that staff can access information even when they're on the go.
Financial institutions understand how important it is to provide as many benefits to businesses as possible. Business bank account holders have a variety of extra benefits, especially if they open an SME bank account. Accounting integrations and collateral-free corporate cards are just a few examples, as are better interest rates and expenditure analysis capabilities. Examine the advantages and perks that your bank provides to businesses that create an account with them.
A business bank account has many benefits, and it is provided with the assurance that you will utilize your bank account. Your business's bank savings account may have deposit limits that must be adhered to. If you choose a business checking account, you may be required to complete a minimum and a maximum number of transactions (or transactional amount). Before opening accounts, carefully review the transaction rules for each option.
Opening a business account is frequently accompanied by costs. Transaction fees, international currency exchange costs, and even fines for failing to maintain a minimum balance are examples. If you want to run your business with the least amount of collateral feasible, go with a bank that has the best fees offers and the lowest fees. Also, see if your firm qualifies for any charge exemptions. Having a free business bank account is always the best.
Many bank accounts have a minimum deposit requirement, and you should have it before opening the account. There may also be a minimum balance that you must maintain to avoid fines. However, this isn't limited to receiving funds. Some banks have a minimum expenditure requirement for accounts, depending on the type of account. If your business is just getting started, choose a bank with fewer requirements and a lower nominal cost.
Long processing time delays and truckloads of paperwork are both antiquated methods. Businesses can now open corporate accounts through banking systems that are highly regulated and streamlined. Make a note of which of your selections has the finest method for opening a company bank account when deciding where to open a corporate account. Check to check if you have all of the required verification documents to open the account.
What are the requirements to open business bank account in Singapore?
Brand and company certifications
Some banks and local laws demand a "doing business as" certificate if your company's registered name and branded name are different. This will be required by your bank, especially if your company has many sub-brands.
Credit score information
If your company already has a credit score, it will be included in your application. If you are creating an account for the first time during your business's establishment, the credit score of the account owner (the business owner) may be required.
Business registration documentation
This is the proof that your company is officially registered with the government. It could be a tax certificate, a document establishing an LLC, or proof of office space purchase (if your business has an offline office). This will be required by your bank to verify that you are a reputable company seeking to open a corporate account.
Licensing information
Is your company registered? This, of course, is dependent on the industry in which you work and the country in which your headquarters are located. Some licenses are unique and must be obtained after you have established an account. However, some permits must be secured before your company's registration. These permits must be given when your company bank account is opened.
Ownership and partnership agreements
The best business bank accounts make room for your business to grow and expand. This includes partnerships. If you share your business with other entities or have entities with a controlling amount of shares, then that legal paperwork is required by your bank. This is purely to ascertain how will be controlling the funds and making authorizations. A resolution from the board of directors might be required, as well.
Personal identification
To open an account in their name, the business owner must present personal identification. The type of documentation required will vary depending on your nation of residency and activities, but it must be a government-issued ID that is not expired. Copies of the business owners’ passports and/or Singapore National ID Cards will be required. Additionally, some banks might need residential proof for the directors and beneficial owners of company.
Employer information
To open a business bank account in Singapore, you will need a copy of the company’s business profile, certificate of incorporation, and the company’s MAA (Memorandum and Articles of Association).
No more multiple bank accounts for managing business expenses
7 steps to open corporate bank account in Singapore
Do your research
Before deciding on a bank, take a close look at all of the available offers, benefits of opening a business bank account, and costs. When opening a corporate bank account, it's crucial to conduct your homework on your current status and how you see your company expanding in the future.
Decide which bank you will opt for
Once you've picked the bank you want to create an account with, research all of their options. It's much better if you can chat with a bank person.
Decide the type of account you will open
Choose whether you'll open a business checking account or a business savings account first (or both). Keep in mind to examine the interest rates and fees associated with each.
Gather the required documentation
Make a list of all the essential paperwork once you've decided which type of account you want. So that there are no surprises or delays once you've completed your application, get them far ahead of time. "Certified True" documents are required. Be aware that some banks may need directors and power of attorney holders to be present in person.
Fill out the application
Complete the application thoroughly and accurately. Provide as much information as possible, and be as specific as possible. If your data is right, your bank will process everything more quickly.
Deposit the required amount
As with most accounts (especially savings), there needs to be a nominal deposit made to open the account. Gather the funds for this and write the check that meets these nominal requirements. Most banks in Singapore require a minimum deposit of 1000 SGD.
Activate your bank account
Your effort does not end until you receive confirmation that your account has been opened. You must use it to activate your account. Get acquainted with the banking services (both online and offline) and begin using your account!
Suggested read: Best business bank account for eCommerce in Singapore
Business banking fees and charges
Administration fee
It is the operative fee that your bank charges for owning the account. You might be charged monthly or annually. On average, the range of monthly fees in Singapore is between 18-35 SGD.
Cash payments
Charges may apply to cash deposits and withdrawals from the account (as well as charges for ATM usage).
Automated payments
Pre-approved payments or recurring transactions may incur fees at some banks. If this is the case, contact your bank.
Manual payments or checks
Checking processing and manual deposits can both be expensive. Take a look at these costs ahead of time.
Minimum balance charges
If your savings account falls below the minimum balance threshold, you may be charged a fee. Make sure this price is within your budget, especially if your cash flow is slow.
Overdrafts
Is overdraft protection available on your checking and credit accounts? Is swiping into a negative balance permissible? Recurring payments might easily put you in danger of going into debt. Check your overdraft costs to make sure they aren't too high.
Additional services
Some premium services (such as specialty cards, insurance, upgrades, advisory, and report preparation) can be charged. If you want to open a low-cost or free corporate account, check with your bank to see if such services are required.
International transactions
Exchange rates, receiving bank costs, administrative fees for the wire transfer provider, and other factors come under the international transaction fees. Have an idea of how much it costs to transfer or receive money from another nation (particularly if you frequently pay for it).
Advantages of having business bank account
Ease in acquiring financing
A corporate bank account leaves a very clear financial trail for your company. This is beneficial for compliance, audits, and loan and investor applications. The ability to view a clear record of your organization's payments enhances your validity as a legitimate business.
Accessibility for partners and employees
You can share a business bank account with your partners and employees without giving your personal assets. Authorized people can access everything relating to your company's finances, and you can have a transparent system for effective commercial transactions.
Accepting various types of payments
Sometimes you should use a SWIFT transfer or a payment application in some cases. However, many of your clients and customers may need to pay you using a credit card. You can take debit and credit card payments with a corporate account, which not only extends your market but also makes your clients' lives easier.
Separating your personal and business finances
The most important reason to register a corporate account is to keep your personal and work finances separate. It's not necessary to combine your payroll and household spending. Everything related to your company is handled individually and can be studied separately as well. Credit scores are also kept separate so that your personal creditworthiness has no bearing on your company's creditworthiness (or vice versa).
Professionalism for your company
Having a business bank account can greatly increase your credibility in terms of brand reputation. Customers are more likely to make payments to a corporate account rather than a personal account. Salary slips and payroll make tax filing easier for employees. Furthermore, all invoices, receipts, and reports can be generated under your company's name. You may also rest assured as a business owner, that your personal transactions will never reflect negatively on your company.
When to open business bank account?
One thing you should remember is
Opening a business bank account is never too early. You can open an account as soon as when you get the appropriate licenses and your business registered. Some specific permits may even necessitate the creation of such an account. If you're going to form a partnership, you'll also need a business account.
Starting early guarantees that your audit trail is clear right from the outset. Many banks have packages and deals for small businesses, so you don't have to be a unicorn to open one. Just keep in mind that if you want to grow your business, your financial institution of choice should be able to accommodate your needs.
Do you own an overseas corporation and regularly do business in Singapore? Try opening a offshore business bank account for your business.
Why should you choose Volopay?
Volopay is not a traditional bank. It is superior to a bank since it provides all of the advantages of a business bank account while also providing a broader choice of services and options.
Volopay's Bill Pay
The Bill Pay features of Volopay are superior to those of a bank account. Multiple bank accounts in different locations are no longer necessary with a centralized location for all of your finances. Your company can get a bird's eye view of all its finances from a single interface, regardless of where it is situated or how many branches it has.
Furthermore, the Bill Pay tool enables you to make a variety of payments at the most competitive rates. International transactions take place at competitive exchange rates, with much cheaper fees (and less time!) than wire transfers. To manage accounts payable in conformity with audit requirements, you can assign your company policies to transactions. Budgets can be used in a variety of departments. It serves as a one-stop shop for all of your business banking requirements.
Physical & virtual cards
Instead of providing your staff with a variety of debit cards, Volopay allows you to provide them with corporate cards. They are significantly more secure and fraud-resistant. If your employees make a lot of offline payments, you can give them corporate physical cards, and you can give them an infinite number of virtual cards for online transactions.
Virtual cards are used for vendor-specific payments and the company can make the SaaS payments or other regular payments.
Accounting integration
Even if you choose a great banking plan, there's a good possibility it won't include accounting integrations. Accounting automation has grown critical for firms, and having to download data externally just adds to the process's complexity.
Volopay allows you to connect your accounting software directly and allows data to be sent without the need for human entry. Volopay also has a payroll payment integration with some HR software.
Real time visibility
With Volopay, everything happens in real-time. When an employee asks for reimbursements, makes a payment to a vendor, or swipes a card, all data is updated.
The option to create accounts for all of your employees means that many people may access information, analyze data, and generate reports in a streamlined and collaborative manner. Volopay also offers a mobile app for employees to access their accounts while on the go.
Business line of credit
Volopay can provide a credit line to your company. These corporate cards with credit line can be obtained by applying for Volopay business credit.
Unlike a bank, where substantial documentation and credit history are required, your credit line is just based on your transactions.
FAQs
On the surface, they function the same way. But a corporate account has functionalities specific to a business, unlike a traditional bank account. A corporate account can have offerings such as debit cards for employees, more lucrative interest rates, and payroll processing services. The balance requirements and fees are also, overall, better for your business.
The purpose of opening a business bank account in Singapore is to have all your business-related transactions in one place. It separates all personal and business payments. Additionally, business accounts have certain benefits that do not apply to personal accounts (benefits that depend on the bank you choose).
No, opening a business bank account will not affect your personal credit score. However, if you avail of credit facilities, then your business credit score will be calculated separately.
The process of setting up your Volopay account is fairly quick and simple. Once you’ve signed up for a plan and provided your documentation (KYB documentation for verification purposes), you will be invited to create an administrative account. You can get started immediately after that.
Business checking accounts do not, but a business savings account does earn interest. The interest rate depends on the bank you use, and the tier of the account you open.
Volopay is not a bank. It is a spend management platform that allows you to access a requested credit line, create physical & virtual corporate cards, and handle all your SWIFT & non-SWIFT payable transactions. Your funds are stored in an account with ANZ. Volopay is the software that you use to access and utilize your funds, while also managing them without the need for multiple accounts in multiple countries.
Extremely so. Volopay does not keep your money in its own pocket. Your funds are stored in an ANZ bank account, which is in compliance with ASIC (Australian Securities & Investments Commission). Your data is protected with bank-grade security encryption and access protocols.
Volopay only charges a subscription fee for its software, and there is a range of plans to choose from. If you opt for a credit line with Volopay, there is a nominal fee for that. All transactional fees (such as currency conversion, administration fees, bank markup fees) are charged by banks, depending on the country to which the payment is being made and the country in which your business is located. This fee is not charged by Volopay.
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