Over the past few decades, Singapore has emerged as a frontier for business incorporation and growth. Singapore has become a magnet for multinational corporations and startups seeking a secure and reliable environment to conduct business operations. If you consider your corporation one of those seeking to start its activities in Singapore, here are a few terminologies you should get acquainted with before setting your business roots in Lion City.
1. Accounts Payable (A/P)
A/P refers to the amount a business owes to its creditors for purchases made on credits. When you receive an invoice for a product or service and have not yet paid it, the amount is logged as a liability in the accounts payable ledger.
2. Accounts Receivable (A/R)
A/R represents the credit owed to the company by its clients. When you issue an invoice for your product or service, and the payment is pending, it becomes accounts receivable.
3. ACRA
ACRA is the government body in Singapore that serves as a legal framework for businesses to comply with. ACRA maintains records of all enterprises in the country.
4. AGM
AGM is a mandatory meeting where the company shares its financial status with shareholders, who approve financial statements and pass resolutions. AGMs in Singapore must occur within six months after the financial year ends.
5. COR
The certificate of residence is a document issued by IRAS to confirm a company’s tax residency in Singapore. This certificate allows the company to access tax exemptions.
6. ECI
ECI is the income of a company after deducting tax-allowable expenses. Singapore companies must submit their ECI to IRAS within three months from the end of the financial year.
7. Enterprise Singapore
It is a Singaporean government agency focused on fostering business growth and development. It plays a vital role in facilitating access to grants, loans, and tax incentives for all companies established in Singapore.
8. EPS
Earning per share is a financial metric representing the portion of a company’s profit allocated to each outstanding share of its common stock.
9. Form C-S/C
It is a simplified income tax report that Singaporean companies must file with IRAS.
10. GST
Good service tax is a value-added tax in Singapore that applies to most goods or services traded within the country.
11. IMDA
IMDA is a Singaporean government agency that supports and develops the media sector. IMDA provides various programs and initiatives to enable companies in the media sector by providing grants, funding, and other growth opportunities.
12. IRAS
IRAS is the government agency in Singapore responsible for administrating and enforcing tax laws in Singapore. IRAS manages the collection of various taxes. Its main objective is to ensure compliance with tax regulations for businesses.
13. Micro Enterprise
A micro-enterprise is a small company with ten or fewer employees eligible for SME Micro Loans from Enterprise Singapore.
14. UEN
UEN meaning Unique Entity Number is a nine or 10-digit number issued by ACRA to every business in Singapore. To obtain a UEN for your company, you must go through the standard company registration process with ACRA.
15. XBRL
XBRL is a file format that is the standard file format when submitting any financial documents to ACRA. Companies must ensure that their financial information is accurately represented in the XBRL format and comply with relevant accounting standards set by ACRA.
Why is it important to get acquainted with these terminologies or abbreviations?
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To ease the understanding of the regulations:
Singapore has its own set of rules and regulations set for businesses. Familiarity with local terminologies ensures you’ll easily navigate these rules more efficiently, ensuring compliance with relevant authorities.
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To demonstrate professionalism:
Knowing local terminologies validates your serious dedication to conducting your business in Singapore. It creates a positive and professional impression in front of the locals, bringing in many networking opportunities.
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Effective communication:
Understanding the meaning and importance of these abbreviations and terminologies enables you to communicate effectively with local entrepreneurs and officials. Consequently, it decreases the risks of misunderstandings.
Conclusion:
Singapore’s vibrant and dynamic business landscape presents numerous opportunities for companies looking to expand or establish their regional presence. Familiarizing oneself with common Singaporean business terminologies and abbreviations is essential for seamless communication, compliance with regulations, and building strong business relationships. By understanding these key concepts, businesses can navigate the local business environment more effectively and position themselves for success in the thriving economy of Lion City.
