From environmental concerns to food security to gender inequality, the issues that non-profit organizations in Singapore address are diverse. To-date, there is an estimated 140 international non-profit organizations in Singapore according to the Economic Development Board. As evidenced by the increase in non-profit organizations over the years, Singapore offers a conducive environment for such organizations to grow and thrive. It also can host your new ideas and programs that can benefit today’s world.
Before deciding on setting up your non-profit organization in Singapore, here are the five things you should know.
Why choose Singapore as the location for your non-profit organization?
Singapore is known to have a stable political and legal environment, making it an ideal location in the Asian region for a non-profit organization’s base. Moreover, as a vibrant business hub, Singapore has an estimated 40,000 international companies. These companies are often on the lookout for collaborations in areas such as corporate sustainability and social entrepreneurship. Furthermore, a non-profit organization can potentially gain access to an affluent donor base. This is because Singapore and the neighboring region takes the lead hosting the highest number of High Net Worth Individuals and accompanying wealth in the world, according to the World Wealth Report 2017 from Capgemini. This is complemented by social finance intermediaries such as the Asian Venture Philanthropy Network and the Impact Investment Exchange Asia to support non-profit organizations.
What is defined as a non-profit organization in Singapore?
A non-profit organisation is commonly referred to as a Voluntary Welfare Organization (VWO) in Singapore. Offering services which benefit the community at large, a non-profit organization does not earn any commercial profits, and in most cases is prohibited from earning funds. Many international non-profit organizations from various industries have decided to make Singapore their Asian base. For instance, the World Bank has an Urban Hub in Singapore. Set up in 2015, the Urban Hub investigates infrastructure and urban development issues. There is also the International Air Transport Association, commonly known as IATA, which delivers essential air travel systems and services, and manages its activities in the region. IATA started operating in Singapore in 1969. In terms of conservation, the World Wide Fund for Nature – one of the world’s largest and experienced conservation organizations – chose Singapore for their Asia-Pacific office in 2006.
How to setup a non-profit organization in Singapore?
In Singapore, a non-profit organization has several entity setup options, namely registration as a public company limited by guarantee, a society or a charitable trust.
The Accounting and Corporate Regulatory Authority describes a public company limited by guarantee as one that conducts non-profit making activities for national or public interests. In order to satisfy the requirements to be incorporated as a public company limited by guarantee, the non-profit organization must have a minimum of two directors, two members, and a qualified company secretary. It is worth noting that one director and the company secretary must be a Singaporean resident i.e. either a Singaporean citizen, a Singaporean permanent resident, or an Employment Pass or Dependant Pass holder. The non-profit organization will have members in lieu of shareholders. Once a non-profit organization has been set up as a public company limited by guarantee, it must prepare a Memorandum & Articles to outline its objectives and by-laws, hold Annual General Meetings, have accounts audited every year, and file for annual returns.
The Registry of Societies defines a society as being a club, company, partnership, or association of ten or more individuals that is not already registered under any other law. This type of entity is suitable for non-profit organizations that do not largely rely on donations or outside funding. The non-profit organization should be led by the President, Secretary, and Treasurer. These three officers should be Singaporean citizens or Singaporean permanent residents. In order to register as a society, the non-profit organization should provide information that includes details on the organization and members, contact information, and SingPasses for the President, Secretary, and Treasurer. The non-profit organization should also furnish its sources of funds, expected membership size, and any foreigners to be employed. Following its establishment, the society should have its accounts audited every year and filed for its annual returns.
A charitable trust refers to a legal instrument whereby no particular person can be designated as a beneficiary. Instead, the purpose must promote a charitable cause that benefits permissible beneficiaries of the public. A charitable trust is usually set up by a person, also known as trustee, who would like to pledge a portion of his or her assets for a charitable cause in a structured manner. In order to set up a charitable trust, there must be a trust deed that dictates how the trustees should work, and a board of trustees made up of at least three people. A charitable trust is often set up for the administration of a scholarship or bursary. Learn more about the common types of trust in Singapore here.
Are there tax exemptions for non-profit organizations in Singapore?
It is worth highlighting that a non-profit organization which has the Institution of Public Character status can get tax-deductible donations. These donations can be in the form of cash, shares, computer, artefact, or land and buildings. In order to have the Institution of Public Character, the non-profit organization should first register itself as a charity. The Charities Regulations stipulate that a non-profit organization can be registered as a charity if it is able to show that its aims are exclusively charitable, and be beneficial to the Singaporean community. The non-profit organization should be led by three governing board members where two must be either Singaporean citizens or permanent residents.
Is there funding available to non-profit organizations?
Administered by the National Council of Social Service, the VWOs-Charities Capability Fund aims to help non-profit organizations boost their governance, management, and operational efficiency. The funding comes in the form of a training grant, a consultancy grant, a shared-services grant, and an ICT grant. Click here to learn how to apply.
In light of these five reasons, it is evident that Singapore is a great host for your non-profit organizations and initiatives. With several issue areas and non-profit workers in the country and the region, navigating the initial stages to register non-profit in Singapore is clear and successful.