Finance Guide for Expats Moving to Singapore

Singpore’s Financial System Explained for Expats

Singapore's financial system is highly developed and very expat-friendly, offering a wide range of banking, investment, and financial services that cater to the diverse needs of its international community. Expats can easily open bank accounts with both local and international banks, provided they present valid identification documents such as passports and employment passes.

Three major local banks exist in Singapore, like DBS, OCBC and UOB, although many international banks also have branches within the city, like Barclays and Citibank

Many banks offer services in multiple languages which of course reflects Singapore's multicultural environment.

The country's currency is the Singapore Dollar (SGD), and the financial system is known for its stability, efficiency, and robust regulatory framework, underpinned by the Monetary Authority of Singapore (MAS). Expatriates can take advantage of Singapore's comprehensive financial services, including savings and checking accounts, foreign currency deposits, and wealth management options. Digital banking is prevalent, so don’t forget to check whether your bank can do transactions in a foreign country. Local banks can also do online financial transactions in Singapore. Additionally, Singapore's tax system is favorable, with competitive personal income tax rates and no capital gains tax, making it an attractive destination for expatriate professionals and investors.

Also don’t forget FX transfers if youa re being paid from an overseas company. Charges can drastically reduce the amount you exchange. Companies like XE: https://www.xe.com/ and TransferWise: https://transferwise.com/ are a good barometer of whether you have got a good deal or not.

Taxation for Expats in Singapore

First of all remember this is a guide and you should always obtain professional advice from a tax specialist.

Staying less than 183 days: Considered a non-resident, taxed only on Singapore-sourced income (e.g., local employment income).

Staying 183 days or more: Deemed resident, taxed on worldwide income. Exemptions for specific scenarios exist (e.g., tax treaties).

Personal Income Tax (PIT)

  • Progressive tax rates from 0% to 22% for residents

  • Non-residents taxed at a flat rate of 15% or 20% depending on the income source

  • Deductions and reliefs available for certain expenses like housing, medical, and charitable donations

Central Provident Fund (CPF)

  • Mandatory contributions by employees and employers (typically 20% of salary each).

  • Expats may opt out of CPF contributions under specific conditions (e.g., certain employment contracts).

  • CPF contributions offer future benefits like housing and healthcare subsidies

Tax Filing

  • Residents file online annually by April 15th (following calendar year)

  • Non-residents file within 30 days after receiving the tax bill

  • Penalties apply for late filing or non-payment

Additional Considerations

  • Foreign Tax Credits: Reduce Singapore tax liability for foreign taxes paid on foreign income

  • Exit Tax: Applies to residents leaving Singapore with unrealized capital gains

Resources

Investing in Singapore as an Expat

First of all remember this is a guide and you should always obtain professional advice from a qualified investment specialist.

Stocks & Bonds

  • There is direct access to the Singapore Exchange (SGX), offering exposure to local and regional companies

  • You can invest in global markets through various exchanges via brokers like Saxo Markets

  • You could diversify with bonds issued by companies or the government, offering fixed income

Mutual Funds & ETFs

  • Professionally managed funds offering exposure to diverse asset classes with varying risk profiles

  • Exchange-Traded Funds (ETFs) passively track indices like the Straits Times Index, providing broad market exposure

  • Consider Robo-advisors like StashAway which can be used for automated, low-cost portfolio management

Real Estate

  • Invest in residential or commercial properties, but foreigners face restrictions on landed property.

  • REITs (Real Estate Investment Trusts) offer indirect exposure to the real estate market, with liquidity and diversification benefits.

  • Consider the high entry barrier and long-term commitment associated with direct property investment.

Alternative Investments

  • Explore options like private equity, venture capital, or peer-to-peer lending for potentially higher returns, but with higher risks and illiquidity.

  • These options often require significant capital and involve in-depth due diligence.

Insurance for Expats in Singapore

Health Insurance: Mandatory MediShield Life for basic coverage, consider private health insurance for wider coverage and better hospitals. Explore providers on our list of healthcare insurers page.

Life Insurance: Provides financial protection for dependents. Consider term life, whole life, or critical illness insurance depending on your needs.

Other Insurance: Explore options for property, travel, and motor insurance. Compare quotes and coverage options.

Links

Looking to move to Singapore? Don’t forget to get the right International Healthcare Insurance.