Singapore is one of the world's most developed business centers, which has contributed to its appeal to foreign investors. Singapore, as a link between East and West, has become a logistics center and a profitable platform for establishing a logistics company in Asia. Most entrepreneurs consider expanding their business in this jurisdiction for a variety of reasons, including favorable tax incentives, political support, ease of registration, and central location. ACRA is the company registrar and supervisory authority.
The primary benefits of forming a company in Singapore
- A robust startup ecosystem with numerous funding opportunities. Several government-adopted strategies to encourage innovation and attract foreign entrepreneurs. Competent reserve personnel who speak English.
- Banking industry developed – corporate accounts can be opened in USD, EUR, GBP, and other currencies.
- High-speed communication networks, dependable sea and air transportation, and emerging markets.
- Upwards of 70 barter treaties were signed to optimize cross-border commerce. There are no restrictions on funds repatriation.
- Tax breaks – no taxes on shareholder dividends or capital gains. The inheritance tax rate is low.
- Strict anti-corruption policy at all levels – Singapore is regarded as one of the world's least corrupt countries.
- Entrepreneurship assistance – companies that meet all of the requirements are exempt from paying taxes on the first $100,000 USD of ordinary taxable income.
Organizational structures to consider when establishing a business in Singapore
In Singapore, any adult can register a company and expect to own 100% of it (including foreign investors).
In Singapore, there are several main types of businesses that can be registered and receive maximum tax benefits:
- Limited Liability Company, either private (Pte Ltd) or public (PLC).
- Full and limited partnerships.
- Limited Liability Company (LLP).
If a non-resident company wishes to enter this jurisdiction's market, it must establish a branch or subsidiary.
Pte Ltd registration in Singapore
Pte Ltd registration in Singapore entails the formation of a business with its own legal entity. The number of shareholders in such an organization can range from 1 to 50, and they have limited liability for Ltd's obligations. At least one of the directors must be from the area. The company is entitled to all of the state's tax breaks.
The benefits of forming a Pte Ltd in Singapore
- It is a distinct legal entity with the authority to engage in commercial transactions, sue, and raise capital. The liability of the company is distinct from the liability of its shareholders.
- Personal and business investments are distinguished. The shareholder is responsible for the equity accumulation. In Singapore, transferring shares of a company is possible by selling all or a portion of the founder's shares.
- A simple process for transferring shares and changing the composition of shareholders that ensures the continuation of activities indefinitely.
- Dividends distributed in appropriate proportions to shareholders will not be taxed under a single-tier tax policy once corporate income taxes are established.
Formation of a partnership in Singapore
This type of business relationship is governed by a partnership agreement, which is signed by two or more partners who share the company's profits and have a common goal. For non-resident investors, the jurisdiction suggests three types of partnerships.
- The maximum number of participants in a general partnership is 20. Individual taxation applies to partners, the rate of which is determined by their share of the general partnership's income. They bear unlimited liability for their liabilities with their assets. Partners may be held accountable for the activities of other partners.
- Limited Partnership (LP) – As part of their initial equity investment, silent partners are liable for obligations. They do not have the authority to make decisions or participate in company management.
- This format is very effective for professional collaboration (such as lawyers and accountants).
Singapore sole proprietorship registration requirements
The structure is appropriate for small retailers. The main benefit is gaining complete control, which grants the right not to share profits while meeting the minimum requirements. The income tax rate will be the same as it is for individuals. An individual entrepreneur who is registered is exempt from filing annual tax returns.
The requirements for registering a subsidiary in Singapore
You will need the following items to establish a Singapore subsidiary:
- a scanned copy of the parent company's registration certificate;
- verification of the legal address;
- the Registrar of Companies confirms the directors;
- confirmation of an authorized person's right to sign documents
- information on the subsidiary's executives
Singapore branch opening requirements
The branch is not a separate legal entity from the parent company. Based on the parent company's Charter, the director can make independent decisions about the organization's operational activities. When establishing a branch, keep in mind that it will not be eligible for local government tax breaks.
You will need the following documents to register a branch:
- certified scanned copies of a foreign company's CCI and MAA;
- information on a foreign company's directors;
- appointment memorandum for two agents confirming their eligibility to work in the Singapore branch;
- the Registrar requires detailed information about the address registered in the jurisdiction.
A Singapore representative office is a business structure that does not have independent legal status and therefore cannot engage in profit-making commercial activities in this jurisdiction.
You will need the following items to open RO:
- a filled-out application form;
- copies of the parent company's certificate of incorporation;
- copies of the parent company's most recent financial and audited accounts;
- a signed undertaking by the parent company confirming that the representative office will follow Singaporean laws.
How to Form a Company in Singapore
The first stage in starting a company in Singapore is to enroll a brand name. You can retain a domain name for close to 120 days. Following that, you must prepare the necessary documents and register with ACRA.
An incorporated business must open a bank account in order to manage its finances and conduct transactions. Because the country is stable both politically and economically, banks can confidently provide guarantees for the safety of their clients' accounts, guarantee a high level of confidentiality, and offer a variety of applications that facilitate and speed up the interaction between the bank and the client.
The jurisdiction's financial institutions are diverse, with varying profile entrance and commission rates. The requested minimum deposit, transaction fees, currency, and other factors all have an impact on the commission amount. Company executives must be present in person when opening an account with a Singapore financial institution.
To open a bank account remotely, you must consult with specialized specialists. Furthermore, a license specific to the type of entrepreneurial activity is required in order to conduct business.
The fundamental requirements for forming a company in Singapore
- Shareholder availability: minimum one, maximum fifty.
- At least one resident director must be present.
- A secretary is present.
- The presence of a minimum paid-up capital of one Singapore dollar.
- Local personnel are available.
Launch of a startup project
The government encourages new businesses by offering numerous grants and tax breaks to both residents and non-residents. Singapore has emerged as a popular location for venture capital funding. Furthermore, many entrepreneurs want to establish an offshore business in this jurisdiction. This is because of the low tax rate and significant discounts available during the first few years of business activity in the country.
There are several main ways to fund a startup.
- Crowdfunding refers to group contributions suitable for small businesses.
- Individuals who invest money in order to gain a larger share of a company are known as business angels.
- Venture capitalists are a type of investor who is willing to put money into innovative start-ups that have a high growth potential.
Aspects of taxation
Income earned/received in Singapore or from foreign sources and transferred to Singapore is taxed in Singapore.
The main types of taxes are:
- The Goods and Services Tax (GST), which has a rate of 7%.
- The corporate income tax rate is 17.5%.
- Income tax rates range from 0% to 22%.
At the end of each fiscal year, accounts must be prepared and filed. Selected auditors conduct audits and provide opinions on whether the audits are carried out in accordance with the jurisdiction's auditing standards.
Our company provides company registration services in Singapore for $1400 USD. We will register a legal entity at that price if you find a lower price.
The registration process can be completed remotely. Those who wish to attend in person can do so by visiting our Singapore office and receiving answers to all questions directly in the country of incorporation.
Jurisdiction is a strategic location with a favorable tax policy. The state grants foreigners the right to 100% ownership of businesses while also providing a favorable tax regime. All of this makes Singapore an appealing location for launching an Asian startup.
As a general rule, you must submit the following documents with your application to open a business in Singapore:
- name of the company;
- a brief description of the planned activity;
- information about shareholders and directors;
- registered address;
- details about the company constitution
A non-resident may establish a company in the Republic of Singapore in accordance with applicable law (requiring the appointment of a local director).
- Singapore company registration deadlines