Singapore is the ideal global business hub for any investor keen on making their mark on this side of the world. It’s strategic location, strong trade and investment and easy business policies make it the most competitive Asian country and the easiest place in the world to do business (as ranked by the World Bank).
Singapore’s many free trade agreements, network of double taxation avoidance agreements and investment guarantee agreements all contribute and lend a hand to protecting your business innovations and ideas, thanks to Singapore’s strict policy when it comes to intellectual property.
Why Setup a Company in Singapore
Singapore has consistently been ranked as the easiest place for set up company or setting up business, do business and one of the most competitive economies worldwide by key ranking reports by top institutions like the World Bank and the World Economic Forum for starting a business in Singapore. You can easily setup a company in Singapore in just an hour. The main source of revenue is exports of consumer electronics, information technology products, pharmaceuticals, ports and financial services.
The city-state is safe and orderly for opening a company in Singapore, and is also recognized as one of the cleanest and greenest cities in the world. It has an efficient and affordable public transport system, along with world-class healthcare services. Singapore’s primary, secondary and tertiary educational systems all meet international standards, making it an esteemed education hub and great place to raise a family and setting up a business.
Summary
In summary, you should choose Singapore and set up company in Singapore today because:
- Rated #1 in the world by World Bank for ease of doing business. You can easily set up company Singapore without physical presence.
- Rated #1 as the most politically stable country in Asia
- Rated #1 as the best labor force in the world
- Ranked the third wealthiest nation in the world by Forbes Magazine
- There are no dividend or capital gains taxes in Singapore
- There is no estate/death/inheritance tax in Singapore
- Low personal tax rates start at zero percent and max out at 22 percent above $320K. There is no capital gain or inheritance tax. Individuals are taxed only on the income earned in Singapore.
- Government grants, up to 70 percent of costs, provided for companies in certain industries keen to adopting IT solutions and equipment to enhance business processes.
- No auditing is required for a company which qualifies as a small company.
- Singapore has no restrictions on foreign ownership of business. The repatriation of profits and the import of capital are freely allowed. Shareholders, including investors who receive dividends out of company profits, are exempted from Singapore tax. Singapore is one of the best places to set up company and run your business.
Ready to setup a company in Singapore and want to know more about how to start a company or how to set up a business in Singapore?
Contact us today for setting up company Singapore at [email protected], we can get your Singapore company set up in just an hour.
Type of Business Structures in Singapore
Making the right choice of business structure is one of the crucial steps when incorporating a company in Singapore. For one, this decision will have an impact on how much you pay in taxes (taxes payable). For another, it will affect the amount of paperwork your business is required to do (incorporation procedures), the personal liability you face, and your ability to raise money (financing).
Generally speaking, you can decide the type of business entity of your business based on three factors: liability, taxation, and record-keeping. Let us have a quick look at the differences between the most common forms of business entities:
1. Company
a. Private Company Limited by Shares
• Has a maximum of 50 shareholders.
b. Exempt Private Company (EPC)
is one which:
• Has a maximum of 20 shareholders.
• No corporation is a shareholder.
• The Minister has deemed to be an EPC under the Companies Act.
c. Public Company Limited by Shares
• May have more than 50 shareholders.
• May raise capital by offering shares or debentures to the public.
• Must register a prospectus with the Monetary Authority of Singapore (MAS) before making any public offers.
d. Public Company Limited by Guarantee
• Is usually formed to carry out non-profit making activities such as promoting arts, etc.
• Is one which has members instead of shareholders. These members agree to pay a fixed sum in case the company is wound up
2. Partnership
As the name implies, a partnership does not exist without its partners. The partnership ends upon death, retirement, or insolvency. In Singapore, there are three types of partnership structures:
a. Limited Liability Partnership (LLP)
Introduced in 2005, the LLP is the most recent and most advanced business structure in Singapore as it is a combination of the features of partnerships and companies. An LLP allows owners to have the flexibility of operating as a partnership together with many benefits similar to those found in a private limited company. Furthermore, an LLP must have a minimum of two partners at all times and it is not suitable for business with trading activities.
b. Limited Partnership
Unlike the LLP, an LP is registered under the Limited Partnerships Act and it does not have a legal personality separate from its partners. In other words, it cannot sue (or be sued) and does not have the right to own property in its own name. A LP consists of at least one general partners and one or more limited partners. General partners are fully liable with their personal assets and can participate in the management of the LP. Limited partners, on the other hand, are only liable up to the amount they have contributed and do not have the power to bind the LP.
c. Sole Proprietorship
Under this type of business structure, the business partners are personally liable for the business liabilities and debts. In other words, the partners share responsibility as one is held accountable for the actions of a fellow partner.
3. Foreign Companies
In Singapore, foreign companies can have the option to register either a subsidiary, or a branch office, or a representative office.
a. Representative Office
Precisely speaking, a Representative Office is not a business entity per see but an administrative arrangement of a foreign company. It is primarily set up for non-commercial activities – a Representative Office cannot perform any profit yielding activities.
b. Branch
A branch office is registered in Singapore as an extension of its parent company and not as a separately incorporated entity. The liabilities of a branch office extend to its parent company.
c. Subsidiary Company
In Singapore, a subsidiary has a distinct legal identity than the parent foreign company and is treated as a local tax-resident. The parent company, local or overseas-based, owns more than 50 percent of the voting stock. The parent company’s liabilities are limited and its assets always remain protected. The subsidiary can have their own corporate bank accounts, operating capital and they can own assets.
Picking the right business entity will not only allow an entrepreneur to reduce liability exposure minimize taxes, it also ensures that the business can be financed and run efficiently. In other words, the right business structure offers the right mechanism to business owners about how the business operations will continue and it clarifies the ownership of all participants in the venture. If you are unsure which business structure suits your business idea, contact us today – we can help you to sort out the right business entity in Singapore!
