It’s considered to be the fourth most important financial centre in the world, and the third place in the world regarding the proportion of income per capita. Recently, Singapore has become the most sought after Asian offshore destination of the 21st century. Singapore is one of the most politically stable countries in the world with a minimal extent of corruption. Offshore investors are provided with the services of most major international banks, financial institutions, investment management companies, accountants and law firms. The Singapore government creates an attractive environment for foreign investment through favourable tax and financial incentives.
Founding a company and business in Singapore
- Singapore isn’t one of the classical offshore jurisdictions, but the foundation of a company brings significant benefits.
- Simplicity and speed. The whole process of setting-up a company is very simple and set up so as to avoid stagnant bureaucratic procedures.
- The tax system in Singapore is governed by the territorial principle. This means you only pay taxes if the profit is derived from the business activity in Singapore. So when the company's profits come from outside Singapore, the company isn’t required to pay taxes. In the case of onshore trades, the basic rate for corporation tax is 17%. However, the government offers tax relief for newly established companies. In the first three years, profits of up to $ 100,000 are completely exempt from taxes, with income up to $ 300,000 the rate is reduced to half. In Singapore, a zero tax on capital gains and dividend payments is introduced. Singapore is like made for offshore business!
- Singapore law offers very liberal rules regarding the foreign business ownership.
- Since Singapore is a modern financial centre, there are many large financial institutions and consulting firms.
- Company ownership in Singapore is a prestigious issue in the eyes of partners as well as clients.
- Long-term political stability is also very important.
- The primary type of company is a Private Limited Company, for which it’s sufficient to have one partner, who may be a resident of any country. However, one director who is a citizen of Singapore is required. A secretary must also be a resident according to the law.
- The company must have a registered office at its physical address, a PO Box is not allowed in this case.
- The company register is publicly accessible, so it’s possible to use the so-called service nominee for greater anonymity.
Anonymity. Everyone - and the businessman in particular - believes and honours the right to privacy. That's our opinion!
And as a bonus at the end - Singapore is a signatory to many agreements avoiding double taxation.
The World Bank has rated Singapore as the state with the best access to set-up and run business
According to US CNN and London research company WealthInsight, Singapore will take up the position of the largest tax haven by 2020.
According to analysts, the Asian city state is the fastest growing tax haven. Besides the low tax burden in Singapore, the fact that Asia is creating more and more wealth is helping. In addition, the concentration of movable individuals is growing rapidly in China, Indonesia and other Asian countries.
SINGAPORE, a small Asian tiger, is the country where it’s the easiest to start business. It doesn’t mean that it’s the best in all ten evaluation criteria. It unbeatably leads in terms of international trade, it’s in top position regarding investor protection or ensuring compliance with contracts, but regarding the registration of property it’s in 36th place.
In general, revenue generated outside Singapore isn’t subject to local taxation.
A tax return is mandatory and must be submitted every year even when the company doesn’t show any activity.
Founding a company in SINGAPORE:
- Minimum number of directors - 2. The director may be an individual, with one of the directors - being a Singapore resident. This director is responsible for ensuring that the company's activities are in accordance with Singapore law.
- Minimum number of shareholders – 1. They may be individuals and legal persons - residents of any state.
- The minimum amount of share capital isn’t set.
- The business name of a limited liability company must contain words (Private) Limited or (PTE) LTD.
- The register of shareholders and executives isn’t publicly available
- Resident companies are levying income tax from sources located in Singapore, as well as from foreign sources. The rate of income tax is 26%.
- Non-residents are taxing income tax only from sources in Singapore and applicable international double taxation conventions are not applicable to them.
- An annual report containing the data on any changes of directors, shareholders and secretaries, the company name and registered office must be submitted to the Commercial Register. The annual financial statement and the auditor's report and copies of those statements must be available at the company’s registered office.
- The general income tax rate is 0-20%. All income derived from sources in Singapore is taxed, as well as income from sources located outside Singapore if transferred to Singapore.
- Singapore's international double tax agreements are signed with the following countries: Australia, Bangladesh, Belgium, China, Denmark, Philippines, Finland, France, India, Indonesia, Israel, Italy, Japan, South Korea, Canada, Malaysia, Netherlands, New Zealand, Norway, Thailand, Taiwan, Sri Lanka, Sweden, Switzerland, Great Britain.