Strategically located at the crossroads of the East and the West, Singapore continues to invite a strong pool of foreign talents to its soil for last few decades. The nation has successfully established a robust trading reputation for itself. One plausible reason why the city-state stands forth among its neighboring peers when it comes to starting a business is because of its simple and fuss-free Singapore business incorporation process.

Why Choose Singapore for a Business Incorporation?

There are a few of the key reasons that make a nation a thriving land for global investors. Enforcement of stringent Intellectual Property law, attractive tax regime, and pro-business government policies are to name a few.

The companies from European and American countries choose to set up their Asia-Pacific bases here. Conversely, Asian companies from India, China, and other countries, incorporate companies in Singapore to gain access to the markets of giant economies like USA and Europe.

Foreigners intending to reap the slew of benefits that the nation has to offer to its subjects, usually prefer to set up their businesses in the form of private limited companies. Benefits such as Singapore’s wide network of Double Taxation Avoidance Agreements and Free-trade Agreements are worth mentioning.

Setting up a branch office is a lucrative option for those who wish to expand the business of their overseas parent company. Lastly, the representative office is for those foreigners who want to mark their presence in this South East Asian financial hub without having any intention to conduct any business activity before surveying the market.

Singapore Company Registration:

The Accounting and Corporate Regulatory Authority of Singapore (ACRA) oversees all functions relating to Singapore company incorporation. In general, the process of incorporation of a company in Singapore takes 1-3 days to accomplish and it can be done through electronic means i.e. BizFile portal. For this, you must have a SingPass ID to log in into the BizFile. You being a foreigner, might face problem to obtain SingPass ID. Thus, you are advised to engage an incorporation expert so that you can carry out the process in a smooth manner. These professional incorporation service providers take the burden of the task off your shoulders. The process of incorporation is quite easy.

Recruiting Manpower:

Singapore provides an edge to carve out the career of the local and foreign talents alike. Consequently, the nation possess a strong pool of highly educated, experienced, motivated, and productive talents from across the world. Entrepreneurs who open a company in Singapore can easily find efficient employees for their business using many online recruitment portals and head-hunting agencies.

Government-aided Assistance and Grants:

The potential business entrepreneurs can tap a plethora of networks that the Singapore government has rolled out to help the businesses grow. This is one of the reasons why Singapore is famed for its bureaucracy.

Businesses in need of funds can turn to government agencies such as Economic Development Board (EDB), Standards, Productivity, and Innovation Board (SPRING) and EnterpriseOne. These agencies are making constant efforts to create a pro-business and supportive business environment that is favorable for small and medium enterprises.

Similarly, these agencies along with the collaboration of Singapore government, are providing financial assistance through fund initiatives such as cash grants, equity financing schemes, business incubator schemes, debt financing schemes, and tax incentives.

Entrepreneur Pass (EntrePass):

Entrepreneur Pass is a type of work visa that facilitate the entry and stay to entrepreneurs who will start and operate a business in Singapore. EntrePass is issued by the Ministry of Manpower upon successful submission of a sound business proposal. For this purpose, an entrepreneur must have at least 30% shares of a company with a paid-up capital of S$50,000. The initial validity of the pass is up to 2 years and afterwards, can be renewed for 3 years. This pass allows the holders to bring their spouse and children below 21 years to Singapore by applying for Dependant’s Pass.

Singapore Taxation Regim:

When you compare tax system of Singapore with many other jurisdictions, you will find the regime to be attractive in terms of tax rates, benefits, allowances and policies. The headline corporate tax rate of Singapore is 17%. The existence of a wide network of double taxation treaties, no tax on capital gains, full and partial tax exemptions schemes for start-ups and existing companies and many more are the few instances. It attracts foreign entrepreneurs and corporate to visit the country and incorporate a company in Singapore so as to take the tax advantages. It is apparent that the tax is the prime factor that determines the net revenue income of a business. The Inland revenue Authority of Singapore (IRAS) oversees the regulations and functions of tax including Singapore tax filing.

Singapore is often regarded as a ‘tax haven’ for a set of progressive policies and benefits that the nation’s tax system offers to its residents. The Inland Revenue Authority of Singapore (IRAS) has imposed relatively low headline tax rates for Singapore corporate income tax, personal tax, and Goods and Services Tax (GST) in the world context.

It is obvious fact that when you are paying less tax, you are likely to retain a higher portion of the income with you. As a result, Singapore has witnessed a major upsurge of foreign talents who visit the island country to take the plunge into its myriad tax benefits.

Singapore Corporate Tax:

The corporate tax system of Singapore is pro-business in nature. The headline tax rate has been reduced consistently over the years and currently, it has been fixed at 17%. It is a part of the government’s initiative to make the country a lucrative investment destination. Apart from having lower tax rates, the system has a host of tax incentives and allowance facilities that a business can opt for.

Single tier tax system:

In simple term, there is no double taxation for shareholders in Singapore. Corporate income tax paid by the company on its chargeable income is the final tax. Dividends paid to the shareholder by a company are not subject to tax. The absence of a tax on capital gains is another milestone that one can achieve in Singapore tax system. Profits on sales of fixed assets and foreign exchange are considered as capital gains.

General Tax incentives:

Full tax exemption for start-ups and partial tax exemptions for existing companies are the two main tax incentives that are meant for Singapore tax residents. Under the full exemptions scheme, a newly-incorporated company does not need to pay tax on the first S$100,000 taxable income for each of first three years. To enjoy this exemption benefits, the company should be incorporated in Singapore, a tax resident of Singapore, and the number of shareholders should not be more than 20.The existing company with less than S$300,000 annual revenue can pay only 8.5% tax. This comes under partial tax exemption benefits of Singapore taxation.

Double Taxation Agreements:

Singapore has a wide spanning network of tax treaties with various nations. Currently, the country has more than 60 comprehensive and 7 limited Double Taxation Agreements (DTAs) in force. The main objective of DTAs is to help businesses avoid double taxation of their income and gain access to a platform to settle tax disputes.

Annual Singapore Tax filing:

Singapore Tax filing due dates for corporate taxpayers are 30 November (Paper filing) and 15 December (e-filing) of every fiscal year . Every company has to submit a complete set of returns, including Form C, audited/unaudited accounts, and tax computation.

Personal Income Tax:

Personal income tax is taxable to the individual’s income earned in Singapore. The tax rates start from 0% to 20%. This tax is applicable for Singapore citizen, permanent resident and the foreigner (who is not a director of a company) who has stayed / worked in Singapore for 183 days or more in the previous year. 15 April (Paper filing) and 18 April (e-filing) of every fiscal year are the last dates for filing personal tax in Singapore. The tax amount is assessed based on a preceding year basis.

Singapore Property Tax:

The IRAS charges property tax based on the annual value of the property. The tax is applicable for all types of property owners including private properties, HDB (Housing Development Board) flats, offices and vacant lands. The property tax rates of the owner-occupied houses and non-owner occupied houses are calculated separately. The current rates of the owner-occupied property are in the range of 0% to 16% whereas the rates of non-owner occupied properties range between 0% to 20%.

Goods and Service Tax (GST):

The term GST stands for Goods and Services Tax and it is also referred as VAT (Value Added Tax) in many other countries. The current rate of GST is 7%, which is relatively lower than most of other jurisdictions. GST registration Singapore is mandatory to the companies whose expected annual revenue exceeds 1 million SGD.