Benefiting from Incorporating Offshore Companies in Singapore
Singapore is known to be one of the Asian Tigers because of its strategic location and the government has remarkable laws regarding local and foreign businesses. It has major local and international banks, hundreds of businesses and thousands of expats. Singapore is considered as the fourth largest foreign exchange trading region. It has the busiest port in the world. Its official spoken languages are Mandarin, Malay, Tamili, and English.
If you have landed on this page, you are probably a business man who wants to expand your company. You may have heard about the clear business policies and its taxation laws of Singapore. Specifically, you may have heard about their law on incorporating offshore companies in Singapore.
The following are basic reasons for incorporating offshore companies in Singapore:
The government of Singapore offers simple and open tax liability.
The government has implemented attractive corporate and personal income tax rate, plenty of tax incentives and relief procedures that business can apply for, and there is no capital gains tax and dividend tax. Since Singapore is following territorial taxation system, taxes are applied to earnings that are accumulated or sourced in Singapore, or a foreign-based earning which is received in Singapore.
This foreign-based revenue which is received in Singapore and meets the qualifying requirements is free from taxes. The government is following a single-tier tax system. This means that if the revenue is taxed at the company-level, the dividends may be allocated to the shareholders free of taxes. Hence, the company income tax rate is about 8.5% for income up to S$300,000. It offers flat 17% for company income beyond S$300,000.
For new incorporated corporations, they will enjoy zero percent tax rate for the first S$100,000 taxable income for the first three tax filing years as long as the business has maximum of 20 shareholders and at least one of them owned 10% of the total shareholding.
You will earn credible business reputation.
Offshore company incorporated in Singapore gains credibility in business transactions particularly among stakeholders, bankers, professionals, and employees.
The government offers simple, clear, and easy offshore company incorporation policy.
Singapore is known to be the easiest country to establish business. It offers efficient, fast and simple registration of company. Incorporation is completely computerized with two basic steps: one, approval of company name; and two, submission of incorporation required papers. These steps have to be processed online and generally, offshore company is incorporation within 1 to 2 days.
The government of Singapore offers unrestrictive foreign ownership regulations.
Foreign ownership is freewheeling and open. The government offers unlimited activities on permitted areas of your businesses. A 100-percent foreign shareholding is even permitted in all fields. Any individual or corporate organizations can become shareholders. Foreign individuals or corporations who want to incorporate offshore company do not need pre-approval from the authorities of Singapore.
Singapore is known to have established stability in its political stance.
Singapore is rated by the Political and Economic Risk Consultancy as the most stable country in terms of political system in Asia. The country is known for its high credibility and business-friendly approaches. Singapore is known as Asia’s transparent, rational, pragmatic, and corruption-free country. They have clear and distinct policies and systems regarding businesses, trade and commerce, intellectual property protection, manpower, and other related systems. This means that there is very low risk in establishing and running offshore companies.
The government of Singapore has credible and advanced banking facilities and systems.
In the midst of global crisis, Singapore stands as Asia Pacific’s leading financial center. Hence, offshore companies in this country have multiple options of world-class local and international banks when they have to open bank accounts. Banks in Singapore offer broad features including online banking system, multi-currency accounts, trade financing, credit card systems, and autonomy to transfer funds to other countries. However, banks in the country will require physical presence during the opening of bank accounts. In case-to-case basis, there are few instances when banks make an exemption on this requirement. The approval of bank account takes between 2 and 5 days which will depend on the merit of due-diligence conducted by the bank.