Corporate account meaning: A guide for Singapore businesses

Every entrepreneur remembers the day their "side hustle" or "big idea" officially became a legal entity. It’s an exciting milestone, but it usually comes with a sudden realization: your personal bank account is no longer fit for business purposes. In the eyes of the law and the tax authorities, your business is now a separate "legal person," and it needs its own financial home.

In this guide, we’ll review exactly what’s the meaning of a corporate account, why it’s often beneficial to have one for businesses in Singapore, and how to open one. We’ll also touch briefly on how you can leverage modern non-banking solutions like Wise Business to avoid many of the hefty fees and constraints that come with traditional corporate banks.

What is a corporate account?

At its core, a corporate bank account refers to a specialised financial account opened exclusively in the name of a registered legal entity, such as a Private Limited (Pte Ltd) company.

Importantly, unlike a personal account, which belongs to you as an individual, a corporate account belongs to the business itself.

It is used to receive revenue from customers, pay salaries to employees, and settle invoices with suppliers. Because it is held in the legal name of the business, it ensures a clear "audit trail", which is an essential component for accurate bookkeeping and mandatory tax reporting to the Inland Revenue Authority of Singapore (IRAS)¹.

Corporate account vs business account

While the terms are often used interchangeably, there are technical nuances it would be good to be aware of before opening an account.

• Ownership Structure: A corporate bank account usually implies the account is for an incorporated entity with a board of directors. A standard "business account" is a broader term that might also apply to sole proprietorships or partnerships, where the legal distinction between owner and business is less rigid².
• Advanced Features: Corporate accounts often come with tools that basic accounts lack, such as bulk payroll integration, multi-user access levels, and trade finance options.

Key benefits of a corporate account

Picture this, you’ve just landed a major contract with a supplier in London. When it comes time to receive your payment, you realise the name on your personal bank account doesn't match your business’s legal name (the name you’ve indicated on your invoice). It doesn’t look professional, and in some cases, could even trigger compliance red flags. Using a company-named corporate account builds immediate trust with international partners, which is vital for sustaining repeat business from them.

Aside from from the trust factor, here are a few other benefits offered by corporate accounts:

Asset Protection: By keeping funds distinct, you ensure your personal savings aren't at risk if the business faces legal challenges or insolvency. Under the Companies Act, an incorporated company is responsible for its own debts³.

Streamlined Tax Compliance: Come tax season, having a single statement for all business expenses makes filing corporate income tax far less of a headache. IRAS requires businesses to maintain proper records and accounts for at least five years⁴.

Access to Credit: Financial institutions generally require a history of corporate account activity and audited financial statements before they will consider a firm for business loans or government-backed financing schemes. So, if you intend to apply for business bank loans or some form of business grants at some point in your business journey, a corporate account will stand you in good stead.

Global Expansion: A corporate bank or business account is the first step toward receiving payments in foreign currencies—though, as we’ll discuss, there are now banking alternatives that let you bypass the fees that often come with traditional business bank accounts.

How to open a corporate bank account in Singapore

Opening an account in Singapore is relatively straightforward, provided your business is already registered with the Accounting and Corporate Regulatory Authority (ACRA). However, do note that financial institutions must perform thorough "Know Your Customer" (KYC) checks to comply with Monetary Authority of Singapore (MAS) regulations⁵.

Here’s what to expect in terms of documentation and processes when you open a corporate account in Singapore:

Before opening an account

• Check Eligibility: Some providers have strict residency requirements, often requiring at least one director to be a Singapore resident.
• Pass a Board Resolution: Before applying, your company’s board of directors must formally meet and pass a resolution to open the account and appoint specific individuals as authorized signatories⁶.

Common documents required

While every institution differs, you should generally prepare the following:

• Business Profile: A recent copy from ACRA (BizFile+).
• Constitution: Your company's Memorandum and Articles of Association.
• Board Resolution: A signed document from the directors authorising the opening of the account and naming the signatories.
• Proof of Identity: NRIC or passports of all directors, signatories, and ultimate beneficial owners (UBOs).
• Proof of Business Activity: Contracts, invoices, or a clear business plan to prove the legitimacy of your operations.

Steps involved when opening a corporate account

1. Prepare the Document Pack: Collate your ACRA BizFile, Constitution, and the identification documents for all directors and Ultimate Beneficial Owners (UBOs).
2. Submit the Application:
   • Digital Path: For straightforward local companies, apply via the bank's website using MyInfo Business (Singpass).
   • Physical Path: For companies with foreign directors or complex ownership, you may need to book an appointment at a commercial banking branch.
3. Complete the KYC Interview: Meet with a relationship manager (in-person or via video call) to discuss your business nature, expected transaction volumes, and primary trading partners. Be prepared to answer questions about your source of funds, expected monthly turnover, and the countries you intend to trade with.
4. Initial Deposit: Once approved, activate the account by transferring the required minimum initial deposit.

Best practices when managing your corporate account

• Monitor Fees: Traditional corporate and business accounts often have "fall-below fees" if your average daily balance drops below a certain threshold (e.g., SGD5,000 to SGD10,000).
• Control Access: Assign specific roles to your team members. For instance, give your accountant "view-only" access while keeping "approver" rights for yourself to maintain internal controls.
• Integrate Software: Save hours of manual data entry by connecting your account to cloud accounting tools like Xero or QuickBooks.
• No Personal Spending: It’s tempting to use the business card for a quick personal coffee, but don't. Keeping the lines crystal clear is vital for clean tax audits and maintaining legal separation for your business and personal finances.

Simplify global finance with Wise Business

As we’ve explored in this article, having a corporate account is about more than just having a place to store funds for your business; it’s about drawing a clear line between your business and personal finances, and having a financial solution that supports business growth.

While a traditional corporate account is a staple for local operations, Wise Business helps solve the common frustrations of high conversion fees and rigid banking borders. By providing local account details in major currencies like USD, GBP, and EUR, Wise Business enables you to receive international payments like a local, helping you avoid the hidden costs often associated with cross-border business transactions.

Wise Business serves as an alternative to traditional business account as you can hold, send, receive and exchange 40+ currencies all in one place. You’ll always get the mid-market rate with low, transparent fees. Even better, you can connect Wise Business cards to your account to control team spending in real time and reduce admin.

Here's what you get with a Wise Business account:

• Hold and manage 40+ currencies for all your international transactions.
• Pay foreign currency bills and ad-hoc business travel expenses using the Wise Business card without hefty foreign transaction fees.
• Get your first Wise Business card for free when you open a Wise Business account.
• Always get the mid-market rate with transparent conversion fees.
• Seamless integrations with popular accounting software.

➡️Get started with Wise Business today

Sources

1. Tax Obligations for Companies: IRAS
2. Sole Proprietorship: ACRA
3. Singapore Company Law: Singapore Law Watch
4. Keeping Records for Your Business: IRAS
5. Notice 626: MAS
6. Open a corporate bank account: GoBusiness Singapore