Commencing on a journey as an entrepreneur can be full of thrills and challenges, and making the right decisions dictates whether this journey will be smooth or bumpy. One major decision that entrepreneurs must take after they’ve registered their business is choosing the right location to open a business account.
Whether the business owner is a native or hails from foreign shores, the decision to establish a business from the scratch is crucial. When a non-resident or foreign entrepreneur opts to open a business bank account, it is commonly referred to as an offshore account.
● What exactly is an offshore account?
Offshore bank accounts are held in a country different from the account holder’s residence. They are immensely beneficial for businesses that frequently engage in international trade, as they serve as a means of holding savings and investments. Below are some reasons why entrepreneurs should consider opening offshore accounts in Singapore:
1. Ease of Conducting Transactions in SGD: If a business is operational in Singapore, opening an offshore business account can turn out to be one of the most profitable decisions an entrepreneur can make. Businesses can easily conduct business transactions in SGD while saving considerably on foreign exchange fees.
2. New Investment Opportunities: Singapore is one of the strongest economies in Asia, and it offers an array of opportunities for businesses to flourish. Courtesy of Singapore’s economic and political stability, the island nation is a relatively low-risk investment wonderland.
Furthermore, investing in different foreign instruments can help entrepreneurs lessen losses by diversifying their investments and easily allocating funds for different international operations.
3. A Plethora Of Business Tools: Many notable banks and fintech institutions are functional in Singapore, and they offer the convenience of opening offshore accounts. In addition, they even offer multiple business tools that can integrate with a company’s business account and simplify the accounting process. Some of the tools and services include:
● Digital Banking: All the leading banking institutions in Singapore offer digital banking services to businesses that eliminate the need for the business account holder to be physically present in Singapore to conduct transactions and manage the business account.
● Multi Currency Cards and Account: Multicurrency accounts enable businesses to store funds in different currencies for as long as they want, sparing businesses from paying the currency exchange fees every time they receive a payment that is in a currency other than SGD.
● Corporate Cards: Corporate cards have nearly eliminated the requirement for setting up a separate reimbursement system. They allow employees to make payments from the company’s business account. The business administrator can monitor the spending, set spending limits, and restrict certain types of transactions, which ensures that the process of assigning corporate cards is completely transparent and secure.
● Expense Management Tools: For those companies that still rely on manual reimbursements to compensate employees for out-of-pocket expenses, expense management systems can automate the process. It saves time and effort for the financial teams and employees alike.
● Automated Accounts Payables and Receivables: Maintaining good business relations is important for business growth, and automated accounts payable and receivable systems ensure that a business never misses a due date.
Things that entrepreneurs must consider when opening an offshore account:
Although Singapore is known to be a tax haven, businesses are obligated to file tax returns in each fiscal year. Before opening a business account in Singapore, an entrepreneur must ensure that they have the means of sustaining this process.
Banks that allow foreign businesses to open an offshore account charge different fees for the maintenance and functionality of the business account. While opening a business bank account, a business owner should carefully understand all the terms and conditions while getting themselves acquainted with all the types of expenses that they would have to incur.
Lastly, a business owner should investigate how robust security offers different banks have. They should compare all options available before fixating on one.
To conclude, business owners have gotten a golden opportunity to maximize their profits by taking their business to a global stage. Opening an offshore business account is the first step in this process. A business owner can consider opening an offshore account because Singapore has a robust economy, there are different banking tools available, and entrepreneurs can take advantage of different investment opportunities.