1. Tuesday, 23rd May 2017

    Malaysia Global Key Industries, Employment, Payroll & Tax, and Immigration

    By jolin Nguyen in Global Key Industries, Employment, Payroll & Tax, and Immigration

    Malaysia Global Key Industries, Employment, Payroll & Tax, and Immigration

    Malaysia

    Key Industries

    Malaysia is focused on growing its Education Industry, evident from the government’s substantial allocation of its annual budget to this key industry. According to IE Singapore, there is an increasing demand for qualified teachers which in turn leads to opportunities in providing training for teachers. With the commitment to the human capital development, there is another opportunity in developing talent through vocational technical education.

    Medical tourism has spurred the growth of Malaysia’s Health care and Wellness Industry. The Malaysia Healthcare Travel Council (MHTC), under the relevant government – Ministry of Health Malaysia has been established to “promote Malaysia healthcare and facilitate public-private sector collaborations, to effectively address issues affecting the industry.” The government has relaxed the foreign ownership restrictions in certain parts of the industry and liberalised employment of foreign qualified medical specialists which provides opportunities in investing in this industry.

    According to Euromonitor, the hectic schedules in urban cities have led to consumers dining out which partly drives the growth in food services in Malaysia. Additionally, the retail scene with developed shopping malls is also thriving particularly in these urban cities. With the liberalisation of the retail and food services industry, this creates opportunities for overseas brands in gaining a local presence in Malaysia.

    Employment

    The Employment Act, 1955 by the Malaysia Labour Department is the main legislation on labour matters in Malaysia. If the contract for a specified period or the time reasonably required for the completion of work is more than one month, the employee has to be given a written agreement. It is mandatory to include terms on the termination of employment.

    Either the employer or employee who has entered into a contract may give the other party the required notice in writing at any time to terminate the contract. The day in which the notice was given shall be included in the notice period. The terms for the termination such as the notice period may be stipulated in the contract. In the absence of the notice period, the Employment Act (Part II, Section 12(2)) serves as a guideline. The contract may be terminated without notice, or if notice has already been given – without waiting for the expiry of the notice, by paying salary in lieu of that notice or unexpired notice period.

    Payroll and Tax Regulations

    Employees Provident Fund Act 1991 (Act 452), known as the EPF is a social security institution that provides retirement funding. The fund requires contribution from both the employer and the employee. Expatriates or foreign citizens are not required to contribute to the EPF. The employee’s portion of the EPF will be deducted from their salary.

    Inland Revenue Board of Malaysia is one of the main revenue collecting agencies of the Ministry of Finance.

    Corporate Income Tax

    If the company’s management and control are in Malaysia, the company is regarded as a tax resident. The company’s paid up capital of less than RM2.5 million, including the capital from all its related group of companies are taxed at the following different two-tiered rates for Year of Assessment (YA) 2016 and 2017. Companies with more than RM2.5 million paid up capital will be taxed at 24%.

    Resident Company Tax Rates

    Chargeable Income

    Tax Rate (%)

    YA 2016

    YA 2017

    Paid up capital of not more than RM2.5 million

    On first RM500,000

    19%

    18%

    Subsequent Balance

    24%

    24%

    Company with paid up capital more than RM2.5 million

    24%

    24%


    Non-Resident Companies’
    income accruing in or derived from Malaysia is taxable if it carries on its business through a permanent establishment in Malaysia.

    Non-resident Company Tax Rates w.e.f YA 2017

    Type of income

    Tax rate (%)

    Business or rental income 

    24%   

    Royalties      

    10%   

    Rental of moveable properties

    10%

    Technical or management service fees  

    10%

    Interest        

    15%

    Dividends     

    0%

    Other income         

    10%   

    Personal Income Tax

    The individual is regarded as a tax resident in that YA if the following conditions apply. The individual is in Malaysia for 182 days or more in the YA. The individual is in Malaysia for less than 182 days in that particular YA, but the individual is in Malaysia for 182 or more consecutive days in the following or preceding year to that YA. Temporary absences due to business trips, treatment for ill-health or social visits for 14 days or less, are included in the consecutive days if the individual is in Malaysia before and after each temporary absence. The individual is in Malaysia for 90 days or more during during the YA and, in any three of the four immediately preceding years to the YA, he was in Malaysia for at least 90 days or was resident in Malaysia. The individual is a resident for the year immediately following that year and for each of the three immediately preceding years.

    Resident Personal Income Tax Rates

    Chargeable Income in Ringgit

    Rate %

    Tax ($) in Ringgit

    5,001 – 20,000

    On the First 5,000

     

    0

    Next 15,000

    1

    150

    20,001 – 35,000

    On the First 20,000

     

    150

    Next 15,000

    5

    750

    35,001 – 50,000

    On the First 35,000

     

    900

    Next 15,000

    10

    1,500

    50,001 – 70,000

    On the First 50,000

     

    2,400

    Next 20,000

    16

    3,200

    70,001 – 100,000

    On the First 70,000

     

    5,600

    Next 30,000

    21

    6,300

    100,001 – 250,000

    On the First 100,000

     

    11,900

    Next 150,000

    24

    36,000

    250,001 – 400,000

    On the First 250,000

     

    47,900

    Next 150,000

    24.5

    36,750

    400,001 – 600,000

    On the First 400,000

     

    84,650

    Next 200,000

    25

    50,000

    600,001 – 1,000,000

    On the First 600,000

     

    134,650

    Next 400,000

    26

    104,00

    Above 1,000,000

    On the First 1,000,000

     

    238,650

    Above 1,000,000

    28

     

     

    The individual is regarded as a non-resident if the individual stays in Malaysia for less than 182 days in a year, regardless of citizenship or nationality.

    Non-Resident Personal Income Tax Rates

    Types Of Income

    Rate (%)

    Business, trade or profession
    Employment
    Dividends
    Rents

    28

    Public Entertainer
    Interest

    15

    –          Royalty;

    –          Payments for services in connection with the use of property or installation, operation of any plant or machinery purchased from a non-resident;

    –          Payments for technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme;

    –          Rent or other payments for the use of any movable property

    10

    Individuals are not taxable if their employment in Malaysia is less than 60 days, are employed on board a Malaysian ship, aged 55 years old who are receiving pension, receiving interest from banks or receiving tax exempt dividends.

    Other Taxes

    In general, 6% Goods and Services Tax (GST) is chargeable on the standard rated supply of goods and services made in the course of a business in Malaysia by a taxable person, as well as on the imports of goods and services to Malaysia. Certain zero-rated goods and services supplies are subjected to a GST of 0% where GST paid on their inputs can be claimed as credits. Certain exempt supply of goods and services do not attract GST.

    Goods imported into Malaysia that are subjected to import duties, are generally levied on an ad valorem basis between 2% to 60%, or may also be imposed on a specific basis in terms of a specific amount per unit. Additionally, there are export duties on main commodities such as crude petroleum and palm oil, and excise duties on a selected range of goods. As for Stamp Duty, it is chargeable on instruments and not on transactions. Consequently, no duty is charged on transaction without creating an instrument of transfer.

    Residents and non-residents are chargeable for Real Property Gains Tax (RPGT) on gains arising from the disposal of real property such as land in Malaysia, and shares in real property company (RPC). RPC is a controlled company owned by a maximum of 50 members and controlled by 5 persons or less, with 75% or more total tangible assets in real property and/or shares in another RPC.

    RPGT Rates

    Disposal

    Companies

    Individuals

    Citizens and Permanent Residents

    Non-Citizens

    Within 3 years

    30%

    30%

    30%

    In the 4th year

    20%

    20%

    30%

    In the 5th year

    15%

    15%

    30%

    In the 6th and subsequent years

    5%

    0%

    5%

    Immigration

    There are three visas that can be issued to foreign nationals. A Single Entry Visa is valid for three months from the date of issue. It is a one-time entry into Malaysia, mainly for a social visit.

    Multiple Entry Visa is valid for three to twelve months from the date of issue. It is issued to foreign nationals entering Malaysia mainly for business or government-to-government matters. A 30 days-period stay is permitted for each entry and extension is not allowed.

    For foreign nationals requiring a visa to enter Malaysia on transit to other countries, a Transit Visa can be issued. Foreign nationals on transit to the next destination without leaving the airport premises do not require a transit visa.

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  2. Tuesday, 23rd May 2017

    Indonesia Global Key Industries, Employment, Payroll & Tax, and Immigration

    By jolin Nguyen in Global Key Industries, Employment, Payroll & Tax, and Immigration

    Indonesia Global Key Industries, Employment, Payroll & Tax, and Immigration

    Indonesia

    Key Industries

    Indonesia has a large domestic market. Private consumption and its political stability are factors that maintain the Indonesia’s economy. Below outlines Indonesia’s key industries. There is a significant demand in the Indonesia’s Infrastructure Industry such as roads, ports, rails, water and power plants. Furthermore, the Indonesia’s government has pledged to improve its infrastructure through increasing the funding dedicated to this industry. Nevertheless, the government’s funding is limited. This presents opportunities for Public-Private-Partnership (“PPP”) and Business-to-Business (B2B) projects.

    In Indonesia, the tech-savvy population has spurred the growth of the E-commerce industry. The Indonesia government is dedicated to the development of the E-commerce Industry with the revision to its Negative Investment List. The amendment has made the industry more open to foreign investments that allow full ownership with investments of more than IDR 100 billion. Nevertheless, if the investments falls below IDR 100 billion, foreign investors are limited to a minority stake – they will only be allowed to own 49% of shares. To capitalise on the e-commerce industry and support the e-commerce infrastructure, there are opportunities to enter into the fields of e-market, e-fulfilment and e-services. With the increasing use of mobile phones in Indonesia as compared to other digital devices such as desktops and tablets, the mobile-first strategy can be adopted.

    Employment

    Employment in Indonesia is governed by the Labour Law – Law No. 13 on Manpower of 2003. Work agreements can be made verbally or in writing. Employing a non-permanent employee has to be made in writing in the Indonesian language with Latin alphabets, otherwise the employee will be regarded as a permanent employee by law. If a work agreement for a non-permanent employee is made orally, the entrepreneur has to issue a letter of appointment for the worker.

    A written contract must include key employment terms including employee and job details that are signed by both the entrepreneur and the worker. Each party shall keep one copy of the written agreement. The terms in the agreement must not be against the enterprise’s rules and regulations, collective work agreement and valid statutory legislation such as the minimum wage requirements and leave entitlements. If there is a difference in the interpretation between the written work agreements in the Indonesian language and a foreign language, the agreement written in the Indonesian language shall supersede the latter.

    According to the law, workers can voluntarily resign. Additionally, employment contracts are considered to have come to an end when the employee has passed away; contract expires; a court ruling or decision of the industrial relationship dispute settlement that ends the contract; or the certain situation or incident as prescribed in the contract, enterprise’s rules and regulations, or enterprise’s collective work agreements that may effectively result in the termination of the employment.

    Payroll and Tax Regulations

    Workers Social Security – known as BPJS Ketenagakerjaan or BPJS-TK is a social security scheme that is mandatory for every employee in Indonesia. Under the scheme, there is a mandatory work accident insurance and death/life insurance contributed by the employer. The old age and pension fund requires contribution from both employer and the employee, where the employee’s portion would be deducted from the employee’s salary. The BPJS Kesehatan or BPJS-KS covers the Health Insurance.

    Corporate Income Tax

    If the domicile, place of incorporation or effective place of management is in Indonesia, the company is treated as a resident of Indonesia. A foreign company with business activities through a permanent establishment (PE) in Indonesia also has the same tax obligations as resident taxpayers. Corporate income tax is at a flat rate of 25%. Public companies that satisfy and maintain all the following conditions for at least 183 days in a tax year can be granted with a 5% tax cut where the tax rate will be reduced to 20%. The conditions are to have at least 40% of company paid-in shares listed in the Indonesian Stock Exchange (IDX) for trading, and the public has to consist of at least 300 individuals, each holding less than 5% of the paid-in shares. Small enterprises with an annual turnover of Rp 50 billion and below are entitled to a 50% discount of the standard tax rate which is imposed proportionally on taxable income on the gross revenue up to Rp 4.8 billion. Enterprises that fulfil certain criteria with annual gross revenue of Rp 4.8 billion and below are subjected to final tax at 1% of turnover.

    Individual Income Tax

    Individual resident taxpayers are an individual who reside in Indonesia, is present in Indonesia for 183 days and more in any 12-month period, or is in Indonesia during a tax year and intends to reside in Indonesia. Individual Tax Residents’ chargeable income is subjected to income tax at the following rates:

    Individual Income Tax Rates

    Taxable Income

    Rate (%)

    Tax Rp. ($)

    Up to Rp 50,000,000

    5%

    2,500,000

    Above Rp 50,000,000 and up to Rp 250,000,000

    15%

    30,000,000

    Above Rp 250,000,000 and up to Rp 500,000,000

    25%

    62,500,000

    Above Rp 500,000,000

    30%

    30% of the relevant amount

     

    If the severance payment is paid within two years, the tax rates below will apply.

    Severance Payment Tax Rates (If paid within two years)

    Taxable Income

    Rate (%)

    Tax Rp. ($)

    Up to Rp 50,000,000

    0%

    0$

    Above Rp 50,000,000 and up to Rp 100,000,000

    5%

    2,500,000

    Above Rp 100,000,000 and up to Rp 500,000,000

    15%

    60,000,000

    Above Rp 500,000,000

    25%

    25% of the relevant amount

     

    If the lump-sum pension payments from a government-approved old age or pension fund are paid within two years, the tax rates below will apply.

    Old age or Pension Fund (If paid within two years)

    Taxable Income

    Rate (%)

    Tax Rp. ($)

    Up to Rp 50,000,000

    0%

    $0

    Above Rp 50,000,000

    5%

    5% of the relevant amount

    If the payment for the severance payment, old age and pension fund is made in the third year onwards, the above Individual Income Tax Rates will apply.

    Non-resident individuals are subjected to withholding tax at a rate of 20% on Indonesia-sourced income, where the rates vary according to the relevant tax treaty provisions.

    Other Taxes

    Value Added Tax (VAT) is an indirect tax imposed on taxable goods and services at a general rate of 10%. The VAT on the export of taxable tangible, intangible goods and certain taxable services is at 0%. Customs duties are imposed on items imported into Indonesia, generally on an ad valorem basis. Customs value is calculated on Cost, Insurance and Freight level (CIF). Excise duties are levied on specific products to control its distribution and consumption such as alcoholic beverages and tobacco products. The Land and Building Tax is chargeable on all land and buildings, unless exempted. Other miscellaneous regional and local taxes include entertainment, advertisement, motor vehicle, street lighting, hotel and restaurant tax, as well as tax on the use of underground and surface water.

    Immigration

    A work Permit (IMTA) can be applied for expert foreign workers upon proving that the expertise is needed and no local worker is able to fill that position. Business visa is issued for business purposes such as attending a conference or seminar that do not involve working in Indonesia or receiving any payments while in Indonesia.

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  3. Tuesday, 23rd May 2017

    Hong Kong Key Industries, Employment, Payroll & Tax, and Immigration

    By jolin Nguyen in Global Key Industries, Employment, Payroll & Tax, and Immigration

    Hong Kong Key Industries, Employment, Payroll & Tax, and Immigration

    Key Industries

    There are four key industries driving Hong Kong’s economic growth. The first industry is in the Financial Services in banking, insurance, stock brokerage, asset management sectors etc. The Government of the Hong Kong Special Administrative Region (HKSAR) has developed initiatives that aim to provide a business-friendly environment to support Hong Kong’s position as a financial hub. Its legal system is transparent and adopts a simple and low tax policy. There are relatively low barriers to entry into this industry and no restrictions on capital flows into and out of Hong Kong.

    Located strategically in Asia, Hong Kong’s second major key industry is in Tourism. The Tourism Commission (TC) in conjunction with the Hong Kong Tourism Board is committed to the promotion of the hospitality culture, essential to the sustainable development of the tourism industry. From the period of January to August 2016, there was a high hotel occupancy rate of 85%. Hence, opportunities to explore within the industry include ventures in hotel operations, travel service companies, cruises as well as Meetings, Incentives, Conventions and Exhibitions organisers. With the government’s business-friendly immigration and labour laws, it ensures a steady supply of multilingual hospitality talent.

    Consequently, Hong Kong’s strategic location also contributes to the success of its third major Trading and Logistics industry. Hong Kong is an ideal location to build any trading, logistics and supply chain operations with its established trading and logistics infrastructure, as well as the adoption of a free trade policy such as not requiring any customs tariffs on imports or exports except for motor vehicles imports and excise duties on four commodities – liquors, tobacco, hydrocarbon oil and methyl alcohol. Lastly, the fourth major key industry is in the Professional and Producer Services supported by Hong Kong’s local and foreign talent pool. Professional services include business services and technical-related services. Producer services are used by other companies in the local economy.

    Besides the four major key industries, there are other six industries in which the HKSAR are developing. They include the Medical, Education, Testing and Certification Services as well as Environmental, Innovation & Technology, and Cultural & Creative Industry.

    Employment

    The Hong Kong’s Labour Department’s Employment Ordinance (EO) and Minimum Wage Ordinance (MWO) governs the terms and conditions of employment. There are some key notes when employing in Hong Kong. Before employment begins, the employee must be informed on terms such as the wages, wage period, notice period to terminate the contract, entitlement to pro-rated or full end of year payment and the payment period.  The written contract has to be provided to the employee if the agreement is in writing. Likewise if the agreement is made orally and the employee makes a written request for a written contract, it has to be provided before the employment is entered into.

    Employers have to keep the past 12 months of employees’ wage and employment records at the employer’s business location or the location where the employee is employed. After the employee’s employment has ended, records should be kept for another six months. The employment contract can be terminated by the employee or employer by providing due notice or payment in lieu of notice. The notice can be pre-agreed but not less than the required period stated in the EO.

    Payroll and Tax Regulations

    In Hong Kong, there is a social security scheme – Mandatory Provident Fund Schemes Ordinance where both the employer and the employee have to make contributions. The employee’s MPF contribution will be deducted from the employee’s salary.

    The main tax authority in Hong Kong is the Inland Revenue Department (IRD). The main tax legislation guiding the three direct taxes – Profits Tax, Salaries Tax and Property Tax is the Inland Revenue Ordinance (IRO).

    Profits Tax

    All profits derived from trade, profession or business in Hong Kong, excluding profits from the sale of capital assets are taxable. Since there are no distinction between residents and non-residents, a resident may derive profits from abroad without being taxed, while a non-resident may be taxed on profits derived in Hong Kong.  For corporations, in the Year of Assessment (YA) 2008/09 onwards, the rate is at 16.5%. For unincorporated businesses, in the YA 2008/09, the rate is at 15%. Since dividends received from a corporation and amounts included in the assessable profits of other persons chargeable are already subjected to Profits Tax, these are excluded from the recipient’s assessable profits.

    Salaries Tax

    All income derived from an office, employment or pension in Hong Kong is taxable. The chargeable income is taxed at progressive rates. This is the income after deductions and allowances. Chargeable income also includes holiday journey benefits, award of shares and share option gains (when the option is exercised, assigned or released), even after the employee has ceased the employment.  

    Salaries Tax for Year of Assessment 2017/18 onwards

     

    Net chargeable Income ($)

    Rate

    Tax ($)

    On the First

    45,000

    2%

    900

    On the Next

    45,000

    7%

    3,150

    Total

    90,000

     

    4,050

    On the Next

    45,000

    12%

    5,400

    Total

    135,000

     

    9,450

    Remainder

    17%

     

    Salaries Tax for Year of Assessment 2011/12 to 2016/17

     

    Net chargeable Income ($)

    Rate

    Tax ($)

    On the First

    40,000

    2%

    800

    On the Next

    40,000

    7%

    2,800

    Total

    80,000

     

    3,600

    On the Next

    40,000

    12%

    4,800

    Total

    120,000

     

    8,400

    Remainder 

    17%

     

    If the net chargeable income exceeds the tax charged at standard rate on net total income (income after deductions but before allowances), the lower tax amount is charged.

    Standard Rate for Salaries Tax on Net Total Income

    Year of Assessment

    Tax Rate

    2011/12 onwards

    15%

    Property Tax

    The Property Tax is charged on the owners of land and/or buildings in Hong Kong at a 15% standard rate on the net assessable value of the property from YA 2008/09 onwards. The assessable value is computed based on the payables to the owner in respect of the right of use of the property. It includes:

    • Gross rent received or receivable,
    • Payment for the right of use of premises under licence,
    • Lump sum premium,
    • Service charges or management fees paid to the owner, and the
    • Owner’s expenditure (e.g. repairs) borne by the tenant

    The net assessable value is the assessable value after deducting rates agreed to be paid and paid by the owner and irrecoverable rent, excluding other payments such as government rent and management fee) less a 20% statutory allowance for repairs and outgoings. However, any sums previously deducted as irrecoverable and then recovered should be included in the year of recovery.

    Net Assessable Value

    Calculations for Net Assessable Value

    Rental Income

     Less: Irrecoverable Rent

     Less: Rates paid by owner(s)

     Less: Statutory allowance for repairs and outgoings (E x 20%)

    Net Assessable Value (E-F)

    Other Taxes

    According to the Stamp Duty Ordinance – First Schedule, there are certain documents imposed with Fixed Duty from $3 to $100 while others are with Ad Valorem Stamp Duty at a rate between 0.1% and 8.5%. For local bets on local horse races, the betting duty is charged on the net stake receipts at progressive rates from 72.5% to 75%. There are no tax or excise duties on exports. As for imports, they are generally tax-free except for motor vehicles for use on the road. The four types of dutiable commodities such as liquors, tobacco, hydrocarbon oil and methyl alcohol are subjected to excise duties.

    The chargeable amount is arrived after deducting dividends and rebates on bets from the total bets. For local bets on non-local horse races, betting duty is on the net stake receipts at a standard rate of 72.5%. The chargeable amount is arrived after deducting dividends, rebates and extra amounts from the total bets. According to IRD, the extra amount is the “amount payable by the horse race betting conductor to overseas operators in relation to the conduct of authorized betting on each bet type in a non-local horse race in excess of 1.5% of the turnover on that bet type.” There is also betting duty charged on authorized cash sweeps, lotteries (Mark-six) and football matches at the rate of 30% on the amount paid, 25% on the proceeds and 50% on the net stake receipts respectively.

    Immigration

    Under the General Employment Policy (GEP), the visa can be applied for non-mainland residents that are qualified professionals who possess valuable skills, knowledge or experience. The applicant’s offer of employment has to be confirmed. The applicant’s academic qualifications or work experience has to be relevant to the job and cannot be readily taken up by the local work force. The GEP visa has neither quota nor sector restrictions. The GEP visa holders may apply to bring in their spouse and unmarried dependent children under the age of 18. These dependents are allowed to work or study in Hong Kong.

    There is also an Admission Scheme for Mainland Talents and Professionals (ASMTP) to Hong Kong for employment as professionals. This is eligible for Chinese residents of the Mainland of China who possess special skills, knowledge or experience of value to and not readily available in the HKSAR. The ASMTP is quota-free and non-sector specific.

     

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  4. Tuesday, 23rd May 2017

    Singapore Key Industries, Employment, Payroll & Tax, and Immigration

    By jolin Nguyen in Global Key Industries, Employment, Payroll & Tax, and Immigration

    Singapore Key Industries, Employment, Payroll & Tax, and Immigration

    Singapore

    Key Industries

    Singapore aims to build a conducive business environment. Besides being committed to the development of an infrastructure hub, Singapore aims to grow and maintain other key industry capabilities. Singapore has leveraged its expertise in project development, structuring and financing, as well as its strategic location to build an infrastructure hub. To ensure that the demand for the infrastructure hub industry is met, the Singapore government has partnered companies and educational institutions to develop talent for the industry. Similarly, with Singapore’s strategic location, it serves as an important hub for setting up operations in the Logistics and Supply Chain Industry. Singapore is ranked fifth in the 2016 Logistics Performance Index across 160 countries. Additionally, Singapore has business-friendly customs and import/export procedures in place to facilitate business operations.

    Singapore has acknowledged that the Consumer Electronics market has played a key role in driving its economic growth. This industry is supported with the government’s heavy investment in Research and Development, as well as a pool of qualified local and global talent. Singapore possesses a sound Intellectual Property (IP) regime. According to the World Economic Forum’s Global Competitiveness Report 2016-2017, Singapore is ranked fourth in the world and top in Asia for offering the best IP protection.

    The Singapore government has supported the Healthcare Services Industry’s growth with initiatives such as upgrading healthcare providers’ skills. The drive for innovation in healthcare solutions and healthcare infrastructure development ensures that Singapore’s healthcare ecosystem will continually provide quality and safety standards. Likewise, Singapore’ food and beverage companies practices international manufacturing standards and stringent food safety procedures. This means opportunities for partnerships or franchises with local brands in the Food Products and Services Industry to aid in operations support, training staff and branding to developing quality and reliable food products.

    Lastly, the Textile and Fashion Industry has been actively developed by the Textile and Fashion Federation (Taff). According to International Enterprise Singapore, home-grown brands are increasingly gaining traction as international brands. Therefore, companies can tap on a global network of production facilities by sourcing from Singapore. As for the Furniture and Furnishing Industry, the Singapore Furniture Industries Council aims to strengthen Singapore as a premier furniture hub from initiatives in trade, talent and design development. According to the World Bank’s ease of doing business ranking, Singapore has been ranked second in 2016. Singapore’s government initiatives and strong economy provides sound incentives for investing and setting up businesses in the country.

    Employment

    Employment in Singapore is regulated by the Ministry of Manpower (MOM)’s Employment Act that covers all local and foreign employees, with a few exceptions. There are certain key notes for employment in Singapore. Within 14 days from the employee’s start date, employers must issue the required key employment terms. Employers need to provide itemised pay slips stating the breakdown of the salary components within three working days from or upon salary payment. These pay slips and employee records are required to be kept by the employer. Current employees’ latest two years records must be kept, while ex-employees’ latest two years records must be kept for a year after the end of employment.

    As for termination, either the employer or employee can terminate an employment contract. If the contract specifies a notice period, it is mandatory to give notice to the other party in writing or pay compensation in lieu of notice. In absence of the notice period in the contract, the employment act serves as a guide for the notice period. If there is mutual consent between both parties, notice can be waived.

    Payroll and Tax Regulations

    In Singapore, employers are required to contribute to employees’ Central Provident Fund (CPF) – a mandatory social security savings scheme. The employee’s portion of the CPF contribution has to be deducted from the employee’s salary. The CPF applies to employees who are Singapore Citizens or Singapore Permanent Residents (SPR).

    Employees are required to contribute monthly to the Self-Help Group (SHG) funds, unless the employee opts out. All Singapore Citizens or SPRs employees belonging to the Chinese community has to contribute to the Chinese Development Assistance Council (CDAC) Fund. Singapore Citizens or SPRs employees belonging to the Eurasian community need to contribute to the Eurasian Community Fund (ECF). Muslim employees who are Singapore Citizens, SPRs or foreign employees are required to contribute to the Mosque Building and Mendaki Fund (MBMF). Finally, employees of Indian descent, except those on the Foreign Worker Levy (FWL) scheme, are to contribute monthly to the Singapore Indian Development Association (SINDA) Fund.

    The Inland Revenue Authority of Singapore (IRAS), a statutory board under the Ministry of Finance of Singapore is responsible for collecting personal income tax, corporate tax, property tax, goods & services tax, betting taxes and stamp duty. The rest of the taxes such as motor vehicle tax, customs & excise duties, foreign worker levy and the airport passenger service charge are collected by various other government agencies.

    Corporate Income Tax

    Income tax is chargeable on income of companies and individuals. As of 2017, the standard Corporate Income Tax (CIT) rate is 17%. IRAS offers partial tax exemption for companies and tax exemption scheme for qualifying new start-up companies. IRAS offers partial tax exemption where 75% of the first $10,000 of chargeable income and 50% of the next $290,000 of chargeable income is exempted from tax.

    Partial Tax Exemption

    Chargeable income

    % exempted from Tax

    Amount exempted from Tax

    First $10,000

    75%

    $7,500

    Next $290,000

    50%

    $145,000

     

    There is also a tax exemption scheme for qualifying new start-up companies that can claim for full tax exemption on the first $100,000 and 50% tax exemption on the next $200,000 for each of the first three consecutive Years of Assessment (YAs). From the fourth YA onwards, partial tax exemption will apply.

    Tax Exemption Scheme for New Start-Up Companies

    Chargeable income

    % exempted from Tax

    Amount exempted from Tax

    First $100,000

    100%

    $100,000

    Next $200,000

    50%

    $100,000

     

    As for the CIT rebate in YA 2017, 50% rebate will be granted, capped at $25,000; while in YA 2018, 20% rebate will be granted, capped at $10,000.

    CIT Rebate

    Year of Assessment

    Corporate Income Tax Rebate

    Capped at

    2018

    20%

    $10,000

    2017

    50%

    $25,000

     

    Income accrued in or derived from Singapore, and income received in Singapore from outside Singapore is taxable income. Deductions such as business expenses, capital allowances and reliefs reduce taxable income, which leads to lower taxes. The taxable income is:

    • Profits from trades or businesses;
    • Dividends, interest and rental income;
    • Royalties, premiums and any other profits from property; and
    • Other revenues

    Individual Income Tax

    There are differences in taxes for residents vs. non-residents. Tax resident for a current YA are Singapore Citizens or Singapore Permanent Residents (SPRs) residing in Singapore excluding temporary absences; or foreigners who has stayed / worked in Singapore for 183 days or more in the year before the YA, excluding a company director. Resident tax rates are progressive where higher income earners pay higher tax, with the current highest personal income tax rate at 22%. Resident tax rates will receive 20% personal income tax rebate, capped at $500 for YA 2017.

    Resident Tax Rates from YA 2017

    Chargeable Income

    Rate (%)

    Tax ($)

    First $20,000 

    0%

    $0

    Next $10,000

    2%

    $200

    First $30,000 

     

    $200 

    Next $10,000

    3.50%

    $350

    First $40,000 

     

    $550 

    Next $40,000

     7%

    $2,800

    First $80,000 

     

    $3,350

    Next $40,000

    11.5%

    $4,600

    First $120,000 

     

    $7,950 

    Next $40,000

    15%

    $6,000

    First $160,000

     

    $13,950 

    Next $40,000

    18%

    $7,200

    First $200,000

     

    $21,150 

    Next $40,000

    19%

    $7,600

    First $240,000 

     

    $28,750

    Next $40,000

    19.5%

    $7,800

    First $280,000 

     

    $36,550 

    Next $40,000

    20%

    $8,000

    First $320,000 

     

    $44,550

    In excess of $320,000

    22%

     

     

    Non-residents tax rates for employment income is at a flat rate of 15% or the resident progressive tax rates shown above, whichever results in a higher tax amount. Generally, director’s fees and other income taxes are at the 22% rate for YA 2017. Non-residents are not entitled to tax reliefs.

    Other Taxes

    Besides the Corporate and Individual Income Taxes, there are other taxes which include the Goods & Services Tax (GST). GST is collected by the Singapore Customs, taxed on consumption – including import of goods and services. The standard rated supplies are taxed at 7%. Customs & Excise Duties is collected by the Singapore Customs mainly on liquor, motor vehicles, petroleum, and tobacco products. Nevertheless, export duties are not levied on goods exported from Singapore. To regulate the employment of foreign workers in Singapore, a monthly Foreign Worker Levy is imposed for each Work Permit holder employed. Stamp Duty is a tax on dutiable commercial and legal documents relating to stocks, shares and immovable property.

    Property Tax Rates are progressive on owner-occupied and non-owner occupied residential properties. Non-residential properties such as commercial, industrial buildings and land are taxed at 10% of the annual value. Motor Vehicle Taxes are taxes excluding import duties on motor vehicles to curb car ownership and road congestion. Casino Tax is levied on the casinos’ gross gaming revenue while Betting Taxes are duties on private lottery, betting and sweepstake.

    Immigration

    Foreigners require work passes and permits to work in Singapore. The Employment Pass (EP) is for professionals, managers and executives (PMEs) possessing the necessary acceptable qualifications, earning at least $3,600 a month. The application for the Employment Pass must be made by a Singapore-registered company, which can act as a local sponsor.

    Foreign entrepreneurs who want to start a business in Singapore and own at least 30% of the shares in the company can apply for the EntrePass. The business has to be a private limited company registered with the Accounting and Corporate Regulatory Authority (ACRA), with at least $50,000 paid-up-capital in a Singapore-based company bank account.

    The Personalised Employment Pass (PEP) can be applied for EP holders earning a fixed salary of at least $12,000 per month or foreign professionals earning $18,000 per month. The PEP holder will not be tied to an employer and can generally hold a job in any sector as long as MOM is notified. To continue holding the PEP, holders must earn at least $144,000 per calendar year and not be unemployed in Singapore for more than six months at any time.

    S Pass can be applied for mid-level skilled foreign employees. Applicants must earn at least $2,200 a month, where more experienced workers would require higher salaries to qualify. These applicants should have a degree, diploma or relevant technical certificates as well as possessing appropriate level of relevant work experience. There is a quota and monthly levy for employees on the S Pass and employers need to maintain medical insurance for S Pass holders.

    Semi-skilled foreign workers in the construction, manufacturing, marine, process or services sector is eligible for Work Permits in Singapore. Eligible Employment Pass or S Pass holders can apply for a Dependant’s Pass to bring their spouses and children to Singapore.

     

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  5. Tuesday, 11th October 2016

    Employee on boarding – Starting them off on the right note

    By jolin Nguyen in Onboarding Techniques

    Employee on boarding – Starting them off on the right note

    board-1273117_1920

    Employee on boarding is important as to help new employees assimilate to their new jobs, the organization, environment and the culture. It is necessary to deliver information (e.g., about the organization, group) and making sure that the new employees are certain of that information and also, uncover additional doubts, concerns and expectations.

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  6. Tuesday, 4th October 2016

    Honest advices to Millennials in the workplace

    By jolin Nguyen in Talent Management

    Honest advices to Millennials in the workplace

    14567602125_bb7be178bf_z_1

    PHOTO: Flickr by Abd allah Foteih

    Almost all the new and young talent just out of college hope that they can realize their ambition when they enter the workforce. However as time passes, the differences in achievements between them would increase tremendously. Why do university graduates with similar IQ and ability have such a big difference in achievement? 

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  7. Thursday, 1st September 2016

    Determinants of strategic leadership

    By jolin Nguyen in Leadership

    Determinants of strategic leadership

    Schoemaker, Krupp & Howland (2013) expressed that the determinants of strategic leadership are those components which contribute essentially to success of strategic decisions. Business leaders may expect positive results from strategic leadership and strategic decision making if these components are utilized correctly, at the right time and place.

    There are a couple of difficulties that acts as one of the performance determinants. One of those is the adaptation to the environment. Organisations need to figure out how to adjust under various conditions of uncertainty and insecurity. The difficulties involve the organisation’s reaction to various external variables, for example, political, economic, and technological, etc. The external environment should be interpreted and understood clearly by the organisational bodies (J.Davies & B.Davies ,2004).

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  8. Monday, 13th June 2016

    Singapore Salary & Employment Outlook 2016

    By Admin in Career Advancement, Staffing

    Singapore Salary & Employment Outlook 2016

    According to the AYP-Group Employment Outlook and Salary Guide 2016, salaries for most jobs are projected to be relatively more stable in 2016, compared to last year. The report also pointed out five key attitudes an employee needs to thrive in the job market over the next ten years: innovation; cognitive reasoning; emotional resilience; constructive communication; and collaboration.

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  9. Tuesday, 26th April 2016

    10 great career advices that will propel your career to greater heights

    By Admin in Career Advancement

    10 great career advices that will propel your career to greater heights

    Everyone needs good advices from friends and mentors from time to time. How about 10 great career advices or behaviours that could launch your career? We like to share with you the following answer from Quora on “What is the single greatest piece of career advice you’ve ever received? Why?” and answered Nelson Wang.

    Over the past 9 years I’ve worked at large companies like Cisco and VMware and have joined smaller start-ups like Box (now a public company and Optimizely as well. I’ve also worked at MTV, a small boutique law firm and UCLA. No matter where I’ve worked, I’ve noticed a recurring pattern of what creates success at work and have worked on a list over the last 9 years. I’ve never shared this list before – until now. The more I’ve followed these, the more success I’ve found. I hope it helps you too. Here’s the list of the top 10 behaviors that could launch your career.

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  10. Friday, 11th March 2016

    Taking the lead in leadership

    Organisational Leadership: Why leaders are essential

    By AYP Editorial Team in Leadership, Search

    Taking the lead in leadership

    What is leadership? Bethel (1990) explains leadership has the capability to affect others. In the late 1980s, organisations viewed leadership as an engine of change. Today, leaders within the organisation must change along with the organisation as it eventually develops and matures (Bass, 2000).

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