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Registration as a Charitable Trust in Singapore

Updated time: Jul 31, 2018 , 12:17 (UTC+08:00)

A trust is an arrangement, set out in a written document (called the trust deed), where an owner or founder hands over property and/or funds to a group of people (called trustees) who administer the assets for the benefit of other people (called beneficiaries) for a stated objective. A charitable trust is a type of trust that promotes a purpose and does not primarily benefit specific individuals.

Who should register a charitable trust?

  • A charitable trust or foundation in Singapore is a legal entity which can be set up by anyone who has decided they want to commit to setting aside some of their assets or income for charitable causes and who wishes to take a structured and ongoing approach to giving.
  • A common use of a charitable trust is for the administration of a scholarship or bursary.
  • It is not usually a useful structure if it will be exposed to a significant risk of liability arising from its operations and transactions (eg when the organisation intends to own or lease real estate such as a sports facility, or to enter into a number of contractual relationships etc).
  • It is useful where the trustees are primarily to hold and invest funds or other similar property and to disburse the income from available funds.

Benefits and drawbacks

  • Limited public disclosure – no need for an auditor or audited financial statements unless these are required by the trust deed
  • Expensive and time-consuming to establish and requires professional assistance
  • No independent legal personality
  • Control is with the trustees – no accountability to a wider membership base

Statutory requirements

  • Must have a board of trustees
  • Must have a trust deed – the constitution of the charitable trust – which sets out the framework within which the trustees must operate
  • Trusts are licensed by the Monetary Authority of Singapore (MAS) and are governed by the Singapore Trust Companies Act. You should seek professional advice if you are interested in registering a charitable trust in Singapore.

Applying for charitable status

After a non-profit entity (society, company limited by guarantee, trust) has been registered and obtained a legal status in Singapore, it is possible to secure charitable status. When reviewing the application for charitable status, the Commissioner of Charities will look at whether the objectives of the organisation are acceptable as charitable.
Being a charity is a matter of status, not of organisational structure. Charitable status brings certain benefits such as:

  • all registered charities in Singapore enjoy automatic tax exemption;
  • it gives a standing and credibility to the organisation; and
  • charitable status is beneficial for fund-raising. Many grant-giving trusts and foundations can only give funding to recognised charities. “Charity” is a very emotive word and can be very persuasive in encouraging the general public to donate.

Charitable purposes can be classified into 4 main categories:

  • The relief of poverty
  • The advancement of education
  • The advancement of religion
  • Other purposes beneficial to the community, with the following purposes explicitly recognised as charitable.
    • The advancement of health
    • The advancement of citizenship or community development
    • The advancement of arts, heritage or science
    • The advancement of environmental protection or improvement
    • The relief of those in need by reason of youth, age, ill-health, disability, financial hardship or other disadvantages
    • The advancement of animal welfare

All charities in Singapore are governed by the Singapore Charities Act and must be registered with the Commissioner of Charities within 3 months of being
set up. Processing time is about three months. There is no charge for registering a charity under the Charities Act.

Statutory compliance

On acquiring charitable status the following compliances must be adhered to. All charities must:

  • submit financial statements and an annual report detailing activities conducted and proposed future plans;
  • ensure that accounting and donation records are maintained properly;
  • submit annual returns;
  • hold AGMs; and
  • disclose fund-raising information online.

Tax exemptions

To grow Singapore as a philanthropy hub, automatic tax exemption is now available for all registered charities.