For businesses that hope to move into Singapore, it is critical to follow several specific steps to allow you to set up a legal business
Singapore have always been top ranking globally in terms of ease of doing business. One of the main reasons is the speed of incorporating your own business entity and the light requirements to do so. If managed properly, your legal entity can be operational ready within 1 business day, of course some preparation work is necessary. The procedure is fully automated as the Accounting and Corporate Regulatory Authority of Singapore (ACRA) ensures total efficiency in their platform to facilitate such procedure. Some basic requirements to take note of when setting up a company in Singapore:
- A valid business name.
- Paid-up capital of $1.00.
- Appoint a named company secretary.
- At least one resident director.
- A registered business address.
- A corporate bank account.
Besides having to think of a great name for your business and coming out with that $1.00 capital (a higher amount is definitely recommended), everything else in the list can be fully outsourced to a professional services provider. This is actually possible and what makes it even more attractive is that the entity can be remotely managed, you can still ensure all compliance matters are sorted with the help of a professional services provider. That beats the need to recruit your own resources at the initial stage, outsourcing is the way to go. Refer to our Step-By-Step Guide To Setup Your Company in Singapore for a more detail overview.
Attractive Tax Framework
At 17% flat corporate tax rate, you can honestly expect to be enjoying one of the lowest tax rate in Asia, if not the world. Singapore’s tax policies are one of the most straightforward and affordable to any business making it impossible to fail in this country. There is tax exemption scheme for new startup companies in Singapore announced in the Budget in 2018 taking effect from YA 2020.
As of year of assessment 2020 onwards, there will be a i) 75% exemption on the first S$100,000 of normal chargeable income; and ii) a further 50% exemption on the next S$100,000 of normal chargeable income. Meaning to say the total tax rate applicable on your initial S$200,000 worth of taxable income can be as low as 6.3% (est S$12,750) in total, anything over and above will be at the usual 17% applicable tax rate.
Besides that, certain income is deemed non-taxable like for example, i) dividend paid out, ii) capital gains and iii) foreign sourced income. Due to such attractive tax policies, venture capital and private equity funds made Singapore their main consideration when setting up a holding company to invest in startups in Asia and all over the world. Naturally making Singapore a hub for startups looking to impress investors to get that seeding fund for a start, and the series of investments after.
Strategic and efficiency
Singapore is one of the most efficient developed countries in the world with a robust aviation infrastructure connecting the country to the rest of the world, as well as a trustworthy domestic transportation system the commutes its population efficiently all around the country. Singapore has a world class airport with more than 80 airlines connecting the country to over 300 countries/cities all over the world making it one of the most connected country in South East Asia.
That strategic location is not only commercially efficient, but also one of the safest from a geographic point of view. Singapore is one of the few countries that is completely sheltered from all-natural disasters, the four seasons, and is so predictable weather wise making it easy for business to continue functioning without much of a concern of it being disrupted by the forces of nature.
Access to an eco network of resources expanding overseas
Being a region hub and well connected to the world have its benefits when you setup in this country. There are government agencies setup specifically to help, guide and render assistance to Singapore companies who are looking to establish their presences in other parts of the world. Agencies like the Economic Development Board (EDB) have industrial teams who are experts in specific industries and can help connect you up with a credible contact in your country of choice to explore your options. Enterprise Singapore manages startup financial schemes that provide a series of grants for startups to help them improve the efficiency and productive of their business, or giving them a financial boost when exploring into a new territory to conduct market research with.
Aside from these, Singapore is an investor haven due to its friendly tax policies that have attracted thousands of Private Equity and Venture Capital funds to establish a permanent presence here looking for that special gem of a company to invest in. Needless to say, that directly attracts many startups to relocate their businesses here as well creating a massive startup eco network in this country if not regionally. It was once said that it is impossible to fail here in Singapore, does seem legit by looking at the huge volume of corporate transactions that takes place here on a monthly basis.
Singapore is a country with limited resources, but it has managed to achieve world-class economic growth by focusing on its core proficiencies. Singapore’s current strengths are excellent infrastructure, a technologically advanced industrial sector, pro-business policies, excellent global reputation, and pro-growth, reform-oriented economic policies.
While it can be stressful to start a new business, Singapore is a very attractive choice because the country makes it easy to plant roots for your business and thrive. It is a world-class economy and a rich culture, full of opportunities for people with innovative ideas and the drive to create a successful business. With many programs focused on supporting foreign startups, in particular, it’s fast becoming a popular home to entrepreneurs from around the world.