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Advantages of Doing Business in Singapore

Wed, 15 Sep 2010 07:56:52 +0100

What are the advantages of incorporating a company in Singapore?

Setting up a business in Singapore is relatively easy; all it takes is one business day for you to get clearance for your company name and one day for incoproration once you have the details including your resident director and shareholder ready.
Singapore only taxes income sourced within the country or foreign sourced income that is remitted into Singapore.
Singapore has an extensive double tax network treaty.
A Singapore company can be wholly owned by a foreign entity.
You only need one director-but he/she must be ordinarily resident in Singapore.
Corporate taxes are low (17%) and new companies currently enjoy tax exemption for the first $100000 in income and 50% exemption from the next $200000 for its first 3 consecutive years of assessment.

Why Do Businesses Choose to Set-Up in Singapore?

Wed, 15 Sep 2010 07:57:17 +0100

Sinagpore is a famously small country. It is 42 kilometres long from West to East and 21 kilometres broad from North to South. Yet it has recently been rated one of the worlds' most desired immigration destinations. And why would thousands of international conglomerates choose Singapore as their base in Asia-a tiny country with a population of less than 5 million? Why do so many choose to start a business in Singapore?

A Pro-Business Environment

Much has been said and written about Singapore’s pro-business environment-not least by the Singapore government itself. The Singapore government is the biggest champion of the country’s pro-business environment, with constant initiatives to make the business environment ever more efficient and competitive.

As a result of these initiatives, the World Bank’s Doing Business 2009 Report (which the author of this article had the pleasure of participating in) ranked Singapore as the world’s easiest place to do business, ahead of New Zealand, United States and Singapore’s closest competitor, Hong Kong.

And what does a pro-business environment have?

For starters, very little bureaucracy and a high level of transparency. In 2006, the Political and Economic Risk Consultancy (PERC) ranked Singapore number one for minimum bureaucracy and red tape in Asia. Information about Government policies, legal requirements and changes to laws are widely, easily and cheaply available. If any changes are planned, the ministries or government bodies publish draft legislation for public comment months before its finalisation.

The incredible efficiency of the public sector cuts down the costs of doing business tremendously and gives good support to the private sector.

In addition, there are no restrictions on foreign ownership of Singapore businesses. Singapore has no foreign exchange controls-and has never had them. There are also no restrictions on the repatriation of corporate profits nor on the import of capital into Singapore.

Low Corporate Tax Rate

The corporate tax rate for the Year of Assessment 2010 is 17%. It doesn’t get much better than that. In addition, there is no tax on capital gains.

As a result, various tax efficient structures can be explored, including structures that involve the use of off shore companies.

Well Developed Infrastructure

Singapore has an extremely well developed infrastructure. The ultra efficient Changi Airport which has often been voted as the Best Airport in the world is also one of the world’s busiest, transporting millions of visitors from around the world to Singapore’s shores.

The country’s efficient public transport network transports millions of Singaporeans around the island in minutes, an efficiency that again keeps the cost of doing business low.

On top of that, gadget geeks will be glad to know that Singapore has a nationwide network of free wifi in public areas which can be used to access the internet and is planning a new nationwide ultra high bandwidth network it calls the Next Generation Nationwide Broadband Network.

IP Protection

Singapore is well known for its respect for and its protection of intellectual property rights. Its intellectual property rights laws are up-to-date. IPRs are also quickly and cost efficiently enforced, making Singapore an ideal location to base research and development efforts in Asia Pacific. In fact, rumour has it that the world's first MacBook and iPhone were assembled in Apple's factory in Singapore.

The above are some of the reasons why we think Singapore is a great place to do business. If you have any others, do let us know!

Business Vehicles in Singapore

Wed, 15 Sep 2010 07:36:40 +0100

In this article, we provide you with some basic information about the legal entities and vehicles available for conducting business in Singapore.

If you want to start a business in Singapore, do contact us. We can provide a registered office, local managers, directors and local agents to fulfil legal requirements.

1. Business

Under the Business Registration Act of Singapore, all businesses must be registered. A business can be a sole proprietorship or a partnership. A local manager is required if the owner(s) are not ordinarily resident in Singapore.

Sole Proprietorship

A sole proprietorship is a business owned by one person or one company. There are no partners.

Partnership

Partnerships have between two to twenty partners.

2. Company

A company has independent legal personality. This means that it is able to own properties, it has perpetual succession and it can sue or be sued in its own name. There are several types of companies

Private Company limited by shares

There are two types of private companies limited by shares:

(a) Private company

This is a Singapore incorporated company where the number of shareholders is limited to 50.

(b) Exempt private company

Generally, this is a private company with no more than 20 shareholders, none of which can be a corporation. Within certain limitations, the exempt private company is exempt from audit requirements.

Public Company

There are two types of public companies:

(a) Public company limited by shares

A public company limited by shares is one in which the number of shareholders can be more than 50. The company may raise capital by offering shares and debentures to the public.

(b) Public company limited by guarantee

A public company limited by guarantee is one which carries out non-profit making activities that have some basis of national or public interest, such as for promoting art, or charity etc.

Branch of a Foreign Company

Branches of foreign companies can be registered in Singapore. Any person who wishes to register a branch of a foreign company is advised to engage a professional, to assist him in the preparation and filing of the application for registration.

The Companies Act requires a foreign company to appoint two local agents in Singapore to act on behalf of the company. The agents must be ordinarily resident in Singapore.

3. Limited Liability Partnership

A Limited Liability Partnership (LLP) gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company. This means that the LLP has perpetual succession, so that any change in the partners of an LLP will not affect its existence, rights or liabilities.

The LLP is required to submit to the Registrar an annual declaration of solvency or insolvency which will be made available to the public. Every LLP must have at least one manager who is ordinarily resident in Singapore.

4. Limited Partnerships

It is a partnership consisting of at least one general partner and at least one limited partner. An LP does not have a separate legal entity from the partners, i.e. it cannot sue or be sued or own property in its own name.

Appointing a local manager is necessary if all the general partners are residing outside Singapore.

A general partner is responsible for the actions of an LP and liable for all debts and obligations. A limited partner is not liable for debts and obligations of the LP beyond his agreed contribution, if he does not take part in the management of the LP.

5. Representative Office

Foreign companies that are exploring the viability of doing business in Singapore, or in using Singapore as a base for market penetration into the Asia Pacific, may set up a Representative Office (RO). An RO has the benefit of allowing a foreign company to test out the business environment in Singapore before committing to any investment decisions. The RO can only conduct market research, feasibility studies and liaison work on behalf of parent company.