If you decided to incorporate a company in Singapore, it is necessary to know the distinctive features of a company set up in this jurisdiction. In this article we are going to discuss some issues pertaining to company formation, possible structures and advantages of incorporating your new business in Singapore.
First of all we would like to draw your attention to various types of companies in Singapore:
- Sole trader. There are very few requirements for this type of this ownership, moreover the process of establishment is quite simple. YB Case experts are ready to assist you in establishing yourself as a sole trader;
- Partnership. There are several types of partnerships, such as general and limited partnership, as well as a partnership that is not considered a legal entity; for assistance with setting up a partnership in Singapore, please do not hesitate to contact with our experts;
- Limited liability company can be private or public. This type of legal structure is the most popular for those who intend to start a business in Singapore;
- Setting up subsidiaries, branches and representative offices in Singapore. Such structures are appropriate for foreign legal entities that desire to establish representation in Singapore.
As for shareholders and directors of a Singapore company, they can be individuals or legal entities. There must be at least 1 shareholder (with the maximum of 50). It is required by law that at least on of the directors is a Singapore resident. If you have any difficulties in this matter, our company is ready to assist you in employing a local qualified director for your company in Singapore.
Opening a company in Singapore
According to the World Bank ranking in last nine years this jurisdiction has been ranked number one in terms of ease of doing business. Requirements for company registration in Singapore are quite simple and transparent:
- Selection and reservation of a company name;
- Preparation of all relevant documents for company registration. It is a company name, description of business activity, allocation of shares, legal address and other relevant information;
- Shareholder/s identity documents;
- Company registration at ACRA (Accounting and Corporate Regulate Authority) ;
- Opening a bank account in Singapore. YB Case is ready to assist you in setting up an interview with banks;
- Obtaining a business license in Singapore;
- Registering with the Tax Office of Singapore and obtaining a GST number in Singapore.
Advantages of a Singapore company formation
Singapore has one of the most efficient and non-bureaucracy legal framework in the world. It is a jurisdiction with one of the most developed infrastructures and has one of the lowest tax rates. Corporate income tax is one of the main taxes that are levied on Singaporean companies, and the tax burden is quite low compared to other places throughout the Asian region, we can say that this is one of the main reasons why investors prefer Singapore for developing their business. The corporate income tax is 17%, but there may be a partial exemption that applies to the first 300,000 SGD of chargeable income (please note that in early 2021 the partial exemption will apply to the first 200,000 SGD of the chargeable income).
There are other reasons. For example, continuous succession - the company exists until certain circumstances occur (such as the decision to liquidate the company). Easy capital raising, so the company can increase its capital by admitting new shareholders or by issuing more shares to existing ones.
There is a possibility of 100% foreign ownership. This jurisdiction allows a foreigner to hold 100% of the shares of a company registered in Singapore. Moreover, there are no restrictions on the amount of capital that you can invest from your jurisdiction in a Singapore company. It is important to note that there are no prohibitions or constraints on the movement of foreign currencies both in and out of the jurisdiction. And there are also no constraints on the repatriation of profits.
State support for startups. Singapore has a government policy aimed at the growth and development of innovation. If you intend to start a business in Singapore, the government provides many grants and benefits.
If you are planning to set up an investment fund in Singapore, please note that over the past decade Singapore has become attractive as a place for venture funding. Today it is a very attractive place in Asia for the formation of venture funds.
Another attractive point is the rule of law. Modern legal framework is based on Common law and provides a strong protection for your business as well as intellectual property registered in Singapore.
Main sectors of economy in Singapore are:
- Consulting services, IT, FinTech;
- Establishment of investment holding companies in Singapore;
- Maritime logistics;
- Undoubtedly Singapore is one of the most advanced countries in the field of IP support;
- Another profitable business sector in Singapore is real estate;
- Financial sector. There is a large number of financial enterprises with both local and foreign capital that have been established and are operating in the jurisdiction.
If you are interested in setting up a business in Singapore, YB Case experts are at your disposal. We will provide with full support at all stages of incorporation of a company in Singapore, as well as assist you with opening a corporate bank account.