A corporate bank account is an account a business can use to store business funds, pay bills, manage finances, and make investments. Mixing your personal and business finances isn’t a good idea.
Therefore, a business owner should keep the business funds separate from their personal finances to succeed in a business role and effectively manage the company’s finances. A corporate bank account is an essential part of every business because it enables businesses to store and manage their business finances separately and more efficiently.
This article will explain what a corporate account is, the importance of corporate bank accounts for businesses, the benefits of corporate bank accounts, the requirements for opening a corporate account in Singapore, and choosing the best corporate account for your business needs. Let’s get started!
What is a Corporate Account and Why It Holds Huge Importance for Businesses
A corporate account is a bank account that a business or organization uses to manage financial transactions. These accounts are used for multiple business purposes to make payments to payroll, suppliers, and customers. Also, they are used to make investments and receive money from clients. A corporate account is a vital part of business operations, allowing businesses to keep track of their financial activities.
The importance of corporate accounts for businesses can’t be overstated. Every kind of business can benefit from having a corporate account regardless of business size, operations, or type of services offered.
By opening a corporate bank account in a leading financial institution, businesses may feel relaxed and secure knowing that their funds are safe and they can access multiple advanced features and services needed to manage their business finances effectively.
Moreover, these catch-all bank accounts offer organizations an excellent opportunity to make investments, improve the business’s credibility, and grow their finances. In essence, having a corporate account is crucial to running a successful business.
Benefits of Opening a Corporate Bank Account in Singapore
There are several potential benefits of having a corporate bank account. Let’s explore them!
Maintains Professional Image
A corporate account is highly beneficial because it makes your business look more professional and improves its credibility. When customers, investors, and vendors see that a company has a separate corporate account in its name, it gives them proof that you’re a legitimate business. In addition, having a corporate account helps business owners get better deals from suppliers and vendors.
Boost the Company’s Credit Rating
If you do not have a corporate account, you’ll have to rely on your individual credit rating when applying for loans. Having a corporate bank account and using it for all transactions can improve the company’s credit rating. Banks are more lenient when they give loans to corporate accounts, especially if the business has a good credit rating.
Offers Investment Opportunities
Another excellent benefit of opening a corporate account is that it offers businesses the opportunity to invest in stocks, mutual funds, bonds, and other financial instruments. By investing in these products, companies can expand their business, grow revenue, and increase wealth. Hence, it is a valuable tool for companies looking to raise their capital because this account provides higher returns than traditional savings accounts.
Simplifies Tax Returns
A corporate account is highly useful and convenient as it allows you to clearly evaluate your income and expenses. This provides an accurate tax return by preventing you from mixing business and personal expenses. Moreover, if you ever have to give your bank statements to an authority or third party, it’ll be easier because your personal and business finances are kept separate.
Offers Liability Protection
A corporate account separates the company’s funds and assets from the business owners, which is one of the excellent benefits of this account. So, if your business fails, you won’t be held liable for profit loss. Instead of a person, the company as a whole is responsible for it. If you use a personal bank account, you don’t get these protections.
Gives Accessibility and Better Control Over Finances
Last but not least, a corporate account is highly accessible, allowing businesses to access the funds and make transactions quickly, anywhere, at any time. Mobile banking apps and online banking portals are behind this accessibility feature.
Furthermore, you can have more control over your company’s finances, which allows you to manage financial activities efficiently. With a corporate account, businesses can track their finances in real-time, identify possible issues early, and take timely action.
Eligibility Criteria to Open a Corporate Bank Account in Singapore
Anyone can open a corporate bank account in Singapore, whether a Singapore resident or foreigner. However, here are the eligibility criteria that must be met to open a Singapore corporate account.
- The applicant’s company should not be subjected to any criminal cases or lawsuits.
- You can open the account both online and offline, depending on the bank or financial institution you choose.
- To open an account offline and for a foreign entity, most Singapore banks demand the physical presence of business owners and controlling directors to sign the paperwork.
- The directors and beneficial owners of the business should not be subjected to a lawsuit or be declared insolvent.
- When starting a business, the owner needs to get permission from relevant authorities. The permission is submitted to the bank during the account opening process.
Documents Required to Open a Corporate Bank Account in Singapore.
Listed below are the documents required to open a corporate bank account in Singapore:
- Completed account opening form
- Proof of company address
- Identity proof documents of shareholders and majority directors: Passport or NRIC
- Proof of company, such as a business plan or financial statements
- Residential address proof of directors and beneficial owners
- Board resolution of company approving the opening of corporate account
- Incorporation documents of a company, including company registration certificate, certificate of incorporation, articles of association, and memorandum
- A list of signatories allowed to use the corporate bank account
- Lastly, provide any additional documents that your chosen bank may require.
All the above documents must be correct, authorized, and certified by the company’s director or secretary.
Addressing Common Challenges Faced During Corporate Account Opening Process
Let’s uncover the potential challenges businesses may face during the corporate account opening process and their solutions!
- Singapore banks have strict compliance checks and KYC requirements to open a corporate account. So, you should beforehand prepare detailed information about the company’s beneficial owners and shareholders depending on CRS classifications.
- Some business types can face close scrutiny, especially if considered high-risk. Therefore, a business owner should provide a comprehensive business plan that clearly shows business activities and their adherence to regulations.
- Most traditional banks require the physical presence of the company’s shareholders and directors for account verification. It can be challenging for companies with international stakeholders. In such cases, consider choosing a bank or neobank that offers a digital process or always check the requirements beforehand.
- The corporate account opening process can take longer than expected, especially if you’re opening an account with a traditional bank for a foreign entity. Therefore, start the account opening process earlier by keeping timelines in mind or choose the digital alternative or neobank that offers a smooth and timely account opening process, such as Fazz Business.
Choosing the Right Corporate Account for Your Business
Whether you are a startup or an established player, here are the things you should consider to ensure you choose the best Singapore corporate account for your business.
- Make sure the bank or financial institution you choose possesses crucial attributes that contribute to the bank’s reputation, such as confidentiality, reliable services, creditworthiness, international presence, and data protection.
- Compare the fees, initial deposit, and minimum balance requirements of banks. It’s best to choose a bank that is transparent in pricing and charges no hidden fees.
- Determine if the bank offers mobile and online banking, transfers in multiple currencies, and financial management to simplify the process of making payments, tracking deposits, and sending invoices.
- It is also essential to consider how long the bank takes to open a corporate account and its account opening process. Choose the bank that ensures a smooth application process without any complexity and long timeframe.
A corporate account is crucial to running a successful business as it enables businesses to manage their financial operations securely and effectively. If you need the best corporate banking solutions for small and mid-sized businesses, try Fazz Business Account. Fazz business account is built for fast-growing startups and Web3 companies that are seeking to open a corporate account in Singapore and ease their financial burden. It comes with all the features of a traditional corporate bank account and more.
Traditional banks charge a lot of fees on corporate accounts and have complex account opening processes. However, Fazz Business, a leading neobank licensed as a Major Payment Institution in Singapore, offers simplicity in corporate accounts. With no minimum balance requirements, no hidden bank fees, fast transfers, and lower exchange rates, our business account allows you to seamlessly make low-cost payments in 50+ currencies.