Benefits and problems

Benefits and problems of registering a company in Singapore

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  • Benefits and problems

    Benefits of Singapore company registration

    Singapore corporate registration requirements and procedures

    1. It is easy for our Clients to setup a company in Singapore because:
      • A Singapore LLC can be incorporated within 1 week, with only 1 shareholder and 1 director. Also, there is no residency or nationality requirements for the shareholder;
      • The minimum paid up share capital for the new incorporated company be as low as US$1. Furthermore, there will be no need for our Client to travel to Singapore to complete the engagement;
      • As a result of the above, Singapore is positively ranked as the 10th best jurisdiction in the world for “starting a business” in the 2016 Doing Business Survey;
    2. A Singapore company is likely to enjoy certain tax advantages including:
      • If properly structured, a Singapore resident company will not suffer tax on i) international income ii) all forms of dividends and iii) capital gains;
      • For resident companies, the first three years’ net profits under S$100,000 are tax exempt. The next S$200,000 are taxed at 8.5%, and taxable profits over this amount pay corporate income tax of 17%, the second lowest rate in APAC;
      • Through its network of 76 double taxation treaties global withholding tax is minimized when extracting funds from international subsidiary companies;
      • Due to Singapore’s ASEAN membership, resident companies pay no import duties when trading with other ASEAN member nations;
      • Singapore Government i) offers a multitude of attractive government grants to new companies and ii) allows all tax returns to be submitted online;
      • To calculate your company’s annual corporate tax amount, please use the tax calculator on this IRAS webpage;
    3. Our Clients may also enjoy certain miscellaneous benefits including:
      • Singapore is the most politically stable country in Asia, boasting a reputable regulatory environment. Consequently, business registration in country is the perfect solution i) for signing regional contracts with customers and suppliers; and ii) for registering intellectual property;
      • Singapore boasts a highly skilled labour force with a literacy rate of over 96% and a computer literacy rate of 99%. Furthermore, since Singapore is the most proficient English-speaking country in Asia, international entrepreneurs find it easy to communicate with suppliers and Clients. Also, all official documents are written in English;
      • A Singapore company is perceived positively by customers, suppliers, investors and banks. Furthermore, a Singapore company can be listed on the SGX, ASX and NYSE;
      • Singapore is a paradise for high-net-worth entrepreneurs. With a strategic location for wealthy Asian entrepreneurs, the city is synonymous with luxury and is home to some of the biggest brands in the world, catering to its world-leading population of millionaires;
      • Singapore is ranked as the most innovative city in Asia for entrepreneurs, according to the Corporate Advisory Firm, Solidiance. Singapore’s high rating was thanks to its talented labour force, relaxed regulatory framework and excellent technological infrastructure;
    4. Lastly, Singapore is ranked as the best jurisdiction in the world for “Doing Business” by the World Bank in its 2016 Doing Business Survey;

    Problems with Singapore company registration

    1. All resident firms must have at least one resident director, who can either be a citizen, permanent resident or work pass holder in the country. Furthermore, corporate directors are not allowed;
    2. As a services and export-based economy, Singapore’s growth is dependent on i) the health of the Chinese economy and ii) the health of the USA and EU economy;
    3. All companies must submit annual financial statements to the Inland Revenue Authority (IRAS). Healy Consultants assists our Clients to efficiently and effectively satisfy this annual statutory obligation;
    4. Singapore is an expensive city for a new business, with monthly average labor cost being US$2,600 and monthly average office rental being US$7 per square foot. Both rates are more than double the rates in neighboring Malaysia;
    5. Hiring foreign workers is difficult; the company will have to prove that local workers were not denied the work opportunity.
  • Best uses for a Singapore company

    1. Holding company or regional headquarters: Singapore is an ideal location for setting up your company’s regional headquarters for the Asia Pacific region. In fact, a large number of blue-chip firms are currently managing their Asian operations from Singapore for the following reasons:
      • Singapore’s territorial taxation rules mean that income from i) foreign subsidiaries ii) non-Singaporean operations around the world and iii) capital gains are legally tax exempt;
      • Through Singapore’s network of 76 double taxation treaties, withholding tax is minimized when receiving profits from international subsidiaries and thereby allowing our Clients to avoid double taxation. Refer to this table to view how global withholding tax rates are minimized;
      • Singapore is a great import and export hub because: i) it boasts the world’s 2nd busiest port and the world’s 12th busiest cargo airport ii) it hosts a huge number of international trading companies and supporting banks, a top source of trade finance and iii) it attracts the world’s leading freight forwarders, shipping companies and insurance companies.
      • Thanks to Singapore’s bilingual education system and its focus on English, most skilled Singaporean workers are fluent in English and either Mandarin or Malay. This means that they can communicate effectively with Clients, suppliers and subsidiaries in Asia and around the world;
      • The Singaporean government provides a tax incentive for companies registering their headquarters in the country, reducing the headline rate of tax to 15% for up to 5 years under the headquarters programme; and
      • Singapore is a developed financial hub, increasing the access to capital for businesses established in the country.
    2. International trading company: A resident trading company in Singapore will benefit from:
      • Legal tax exemption on international sales if properly structured;
      • The strength of Singapore’s reputation as a business and financial hub when dealing with Clients, service providers and sources of finance; and
      • Singapore’s status as a major shipping and logistics centre, meaning that distribution is more easily managed here than in many competing jurisdictions.
    3. Following Singapore business registration, Healy Consultants can open a supporting corporate bank account in every country in the world including Germany, Dubai, South Africa, Brazil, Australia, Japan, eliminating the need to register local companies on each continent;
    4. Singaporean companies can be supported by a low cost multi-currency merchant account for e-commerce sales;
  • Similar low tax jurisdictions

Contact us

For additional information on our business registration services in Singapore, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
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