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Setting Up A Business In Singapore

BIZ-IN-S'PORE

Why Singapore?

Singapore is an outstanding and distinguish city to work, live and play. It is a globally connected, multi-cultural city which is different from other countries and has been consistently ranked first as the world’s easiest place to do business. It has stable political institutions, world-class infrastructure, well developed capital markets, highly educated work force, rich cultural traditions, and an attractive tax regime.

THE ADVANTAGES

Attractive Tax Rates:
Singapore offers one of the most efficient and professional corporate and personal tax regimes in the world. Based on Year of Assessment 2012, personal tax is ZERO for chargeable income below S$20,000 and starts at 2% for income exceed S$20,000. The highest personal tax rate is 20% for income exceed S$320,000. For corporate tax, the effective tax rate for taxable profits up to S$300,000 is as low as 6%. For taxable profit more than S$300,000, tax rate is 17%. Capital gains in Singapore are not taxable.

Rated #1 - World's Easiest Place to do Business:
Singapore is ranked #1 for the world’s most conducive place to do business by the World Bank. Singapore consistently achieved a high ranking in multiple fields.

Ranked #2 - Worldwide With Best Investment Potential:
Singapore is ranked second worldwide as the city with the best investment potential for 16 consecutive years by BERI Report 2010-2011.

Best place in Asia to live, work and play:
Singapore is the best place in Asia to live, work and play by Quality of Living Worldwide City Ranking, Mercer survey conducted in June 2010.

 

Other top rankings:
• Singapore is ranked first for having the most open economy for
international trade and investment by the Global Enabling Report
2010.

• Singapore is ranked the most competitive country in the world by
IMS World Competitiveness Yearbook 2010.

• Singapore is the best business environment in Asia Pacific and
worldwide by Economist Intelligence Unit, December 2009.

• Singapore is ranked 4th in the world and 1st in Asia for having the
least corruption in its economy by IMS World Competitiveness
Yearbook 2010.

• Singapore is ranked the most transparent country in the world and
Asia by IMS World Competitiveness Yearbook 2010.

• Singapore is ranked 7th in the world and 2nd in Asia for having the
most motivated workforce by IMS World Competitiveness Yearbook
2010.

• Singapore has no restrictions on foreign ownership of business. The
repatriation of profits and the import of capital are freely allowed.
It is one of the best places to set up your business.

VALUABLE, STABLE & STRONG

Compliance Requirement

All Singapore companies must comply with the statutory filing requirements with Accounting and Corporate Regulatory Authority (ACRA) and Inland Revenue Authority of Singapore (IRAS).  You may engage a professional firm to be your tax and secretary agent to assist you to meet the compliance requirement.

 

Inland Revenue Authority of Singapore (IRAS)

Estimated Chargeable Income (ECI): file within 3 months from financial year end
Income Tax Return: file by 30th November each assessment year

 

Accounting and Corporate Regulatory Authority (ACRA)

Annual General Meeting (AGM) must held within 6 months from the financial year end.

  • Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.
  • Annual Return (AR): AR must be filed within one month after the AGM

 

Other Requirements
  • Goods and Services Tax (GST): registration for GST is compulsory if :
    a) turnover is more than $1 million for the past 12 months;
    b) you are currently making sales and you can reasonably expect the     turnover to be more than $1 million for the next 12 months. 
  • Audited or Unaudited report: every company must prepare either audited or unaudited financial statements; Company needs not be audited if it isan Exempt Private Limited company (EPC) and turnover less than S$1 million.
  • XBRL Filing requirement: Solvent EPCs will are exempted from filing XBRL report. Insolvent EPCs and Non- EPCs are required to file XBRL
  • CPF Contribution: contribution made 14 days after the end of the month
  • Company Registration Number Disclosure: every company is required to have the registration number on all business letters, statements of account, invoices, official notices and publications.
  • Licenses and Permits: Some business in Singapore is subjected to regulation by government authorities such as school, travel agency.
  • Custom Registration: for company involves import, export in and out of Singapore, you will need to obtain a CR No., known as Custom Registration
Incorporation Requirement
  •  Different types of company registration
    LinKz provides a comprehensive range of services relating to business formation, including:
    - Incorporating of a private limited company
    - Incorporating of a limited liability partnership (LLP)
    - Registration of a branch in Singapore
    - Registration of Singapore Representative Office
    - Assist formation of offshore companies (e.g. British Virgin Islands,  Cayman Islands, etc)
    - Connecting or assisting with incorporations overseas entity
    (e.g. Malaysia, Thailand, Hong Kong, China, Indonesia, etc)

Our work does not end with business setup. We support every stage of a business development from company incorporation to regional expansion.  We provide one-stop solutions to business.

 

  • Benefits of Incorporating a Private limited company
    - Private limited company is the most preferred and common business
    form in Singapore. The majority of companies in Singapore are
    registered as companies limited by shares. The reasons are:

    - A private limited company is a legal entity on its own separate from its owners. Therefore, company’s directors and shareholders are not
    liable for company’s debts

    - The company’s share can be 100% owned by a foreign individual or
    company

    - A private limited company enjoys special tax exemptions

    - No taxes on first S$ 100,000 taxable income for first three years from incorporation

    - The company’s share can be 100% owned by a foreign individual or
    company

    - A private limited company is a legal entity on its own separate from its owners. Therefore, company’s directors and shareholders are not
    liable for company’s debts

    - Effective tax rate as low as 5.6% on taxable income of up to
    S$ 300,000

    - Low flat tax rate of 17% on taxable income above S$ 300,000

    - Zero taxes on capital gains and dividends income

    - No taxes on first S$ 100,000 taxable income for first three years from incorporation

    - No controls or restrictions on repatriation of profits to investors

 

  • Incorporation Requirement
    A company can only be incorporated upon the approval of its proposed name. The proposed name can only be accepted if it is not identical names; undesirable (offensive, abusive or obscene); Restricted names (that minister has directed the Registrar not to accept).

    A Singapore company can be incorporated with a minimum of one director. If the company has only one director, that director must be ordinarily resident in Singapore, that is, he must either be a Singapore citizen, Singapore Permanent Resident or an Employment Pass Holder. A company can have one shareholder who may be an individual or a corporate entity. There is no restriction on foreign equity participation in a Singapore company.

    There must be at least one company secretary who shall have his/her principal or only place of residence in Singapore.  Every company must have a registered office in Singapore to which correspondence may be sent.

    In summary, the requirements to form a company are as follow:
    I.    Approval of proposed company name
    II.   At least one local director
    III.  At least a qualified company secretary
    IV.   Singapore registered address for the proposed company
    V.    Minimum one shareholder
    VI.   Minimum paid-up share capital is S$1
    VII.  Please contact our consultants if you need further advice on how to form a Singapore company.

Different Types of Business Structure

Before setting up a new business in Singapore, an important decision is to decide what legal form your business will take.  You can choose to operate your business as a private limited company, sole proprietorship, partnership, limited liability partnership, branch office or representative office.  The most common and widely used business form in Singapore is a private limited company.

 

Singapore Incorporated Company

Singapore incorporated company includes private limited company and public company. A company may be registered as a private company if it does not have more than 50 shareholders. Otherwise, the company must be registered as a public company.  A private limited company is the most common and widely used business entity in Singapore.

 

Foreign Company

A foreign company wishes to register an office in Singapore may register either:
A subsidiary company- private limited company
A branch office
A representative office

A Subsidiary company is in fact a Singapore incorporated company.  The only difference is that majority of the shares is owned by a foreign entity instead of a local investor.

An Exempt Private Company (EPC) is a type of private limited company which has not more than 20 shareholders and its shares are not held by another company. An EPC is exempted for auditing requirement if its revenue does not exceed S$5 million.  However, it is still required to prepare unaudited accounts, also called compilation report for purpose of AGMs and filing with ACRA.

Singapore Branch Office

A Singapore Branch of a foreign company is not a separate legal entity as it is considered to be merely an extension of a company incorporated outside Singapore.  Therefore, its entire assets belong to its head office and its liabilities may be enforced against all the assets of the head office.  Any potential claims (whether in the country of incorporation, Singapore or elsewhere) against Singapore branch or head office may, therefore, have impact on the financial of Singapore branch or head office.

 

Representative Office

A foreign company may establish a representative office in Singapore to undertake promotional and liaison activities on behalf of the parent company. A representative office in Singapore has no legal status and is not permitted to engage in business, conclude contracts. It is thus not liable for Singapore income taxes.

A Representative Office in Singapore has very limited use since it cannot engage in any other business activities but promotional activities.

A Representative Office is usually valid for one year and must re-apply for a continuation of its status after the expiry of the initial period of approval.