Singapore is a small island city-state in Southeast Asia, right at the crossroads of sea trade routes between East and West. The Singaporean authorities have spent decades making their country a major financial and business hub where all the most important international corporations open their subsidiaries. International investors are attracted not only by Singapore’s good business reputation, but also by the islands’ convenient infrastructure, highly qualified and motivatedworkforce, and effective legal protection for businesses, including protection of intellectual property rights.
Other key advantages of this jurisdiction include:
However, our article would be incomplete if we omitted a few disadvantages of this jurisdiction:
Having weighed all the pros and cons, an investor might decide that opening a company in Singapore is very profitable as you conduct your business in a jurisdiction offering legal tax optimisation tools and at the same time having advantages typical of an offshore zone
Singapore has a simple or so-called single-tier tax system. What does it mean? In this system, corporation tax is paid only at the company level, while dividends distributed to the shareholders are tax-exempt.
Capital gains and a part of the company’s revenue are not taxed either, provided they are earned outside the country and not brought to Singapore afterwards. Thus, the country with an impeccable business reputation offers international businesses the same opportunities as traditional tax havens in the Caribbean: zero taxation on overseas revenue and confidentiality.
Singapore has signed double taxation treaties with 80 countries worldwide.
The standard corporation tax rate in the country is 17%. The Singaporean government supports businesses by providing tax reliefs to start-ups.
The standard VAT rate in Singapore is only 7%. Property tax and stamp duty are levied on property-related transactions.
Before registering a company in Singapore, a savvy entrepreneur needs to research carefully which economic areas are already developed in the country, and which are rapidly developing at the moment.
A great number of contributions to the country’s budget come from taxes from the service sector, including specialised and financial services, information and communication technologies, and tourism. Annually, this sector accounts for at least 75% of revenues.
The service sector is followed by industry and construction. Now, only the most profitable areas of the production sector have remained afloat in Singapore: electronics, high-precision engineering, chemical industry, biomedical technologies, and aerospace industry.
The fast-growing sectors of the Singaporean economy are of the greatest interest to foreign businesses:
The government supports the above-mentioned sectors. For example, the authorities are interested in the growth of the agricultural sector to lower the amounts of imported food.
Just like in other economically developed countries, Singapore offers multiple legal structures:
Number of Shareholders
Natural/legal person or a limited partnership
Limited Partnership / LP
Natural person, local or foreign company
Limited Liability Partnership / LLP
Natural person, local or foreign company, another LLP
Depends on the type of a Singaporean company
The most common legal structure in Singapore is a company, the most popular types of companies in the country are the following:
All four types limit the liability of the founders towards the company’s debts:
Most often, international entrepreneurs choose an exempt private company to register their business in Singapore. It is suitable for most types of commercial activities in the region, and it allows you to successfully resolve issues related to immigration, recruitment, registration of intellectual property rights and attraction of investment capital.
An exempt private company imposes some limitations:
To give you a clearer overview, we are going to consider the process of starting a business in Singapore using the example of an EPC.
Before sending the documents to the ACRA (Accounting and Corporate Regulatory Authority), you will first need to take the following steps:
If you contact qualified agents specialising in setting up companies in Singapore, they will prepare, approve and send the necessary documents for you to sign after which they will register the chosen legal structure. They cover the following services:
Singapore deserves its place in the top three easiest jurisdictions for doing business. The registration procedure itself takes less than an hour. Corporate advisors usually need from one to two weeks to complete the whole process, which includes collecting the necessary information, verifying the information provided and having the registration documents signed.
To run your business in Singapore, you need to register with the tax authorities and open a current account with a Singapore bank. The latter is quite difficult for companies with international founders, especially if the business was set up to operate overseas and does not have a physical and economic presence in Singapore. It is not uncommon for such firms to use payment systems instead of banks or open an account with a financial institution overseas, as foreign banks treat Singaporean companies favourably.
The Singaporean authorities do not require too much reporting from private businesses, but all registered companies, regardless of where they operate, prepare and submit four annual reports to the authorities:
The range of tasks that Imperial & Legal’s specialists handle on an everyday basis has long extended beyond the United Kingdom. If you are planning to enter international markets and Singapore is the most suitable jurisdiction for you, we can help you start a new company as quickly and cost-effectively as possible.
Imperial & Legal’s team will provide support for VAT filings, opening a Singapore bank account or using an international payment system, obtaining business or work visas, organising relocation to Singapore, and preparing annual accounts. With quality legal support, you will be able to fully focus on the main task, the development of your business abroad.
No, they cannot. To set up a business in Singapore, they need to appoint a director and employ a licensed corporate secretary, and both of them must be Singapore residents.
Because of the numerous unique advantages this legal structure offers:
You will need to collect the following documents:
Your costs of registering and running a business in Singapore depend on numerous factors:
The most affordable option would be to start an exempt private company without any actual presence in Singapore other than the registered office and local director and secretary and with a bank account in a foreign bank. In this case, your costs will start at $3,000 per annum.
If you need more precise calculations based on your specific circumstances, book a consultation with Imperial & Legal.
We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.
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