The country is offers one of the best and safest environment for any new company setups. The World Bank report ranked Singapore as the number one country in terms of the doing business for 2 consecutive years. The country is also ranked as the 2nd most competitive country after USA. Starting a new business in Singapore is a great prospect for any foreign companies. However, there are rules and regulations that you might want to know when incorporating a new company.
The conditions are simple: At least one of the directors must be a local resident, or hold a work permit. Both Singaporeans and foreigners can register a new company Only $1 for paid-up capital The company must have a local registered address The company must hire a local qualified company secretary. Secretary: Within 6 months of its incorporation, the Company is required to appoint a qualified Company Secretary Shareholders: There is no restriction on foreign shareholders in a Company, and there is also no requirement that the shares must be owned by Singaporeans
Benefits of setting up a company
Here's one great benefit: The country grants tax exemption for the first $100,000 profits new companies. This benefit continues for up to three years and the corporate tax is also very enticing at 8.5% tax for up to $300,000 profits. Not many countries can match the low tax rates set by Singapore, which makes it a very big factor.
Incorporating your company
Before a company can be incorporated, its name must first be approved by, and reserved with, the Registry of Companies & Businesses, the name is reserved for two months, during which the incorporation documents are required to be submitted to the RCB. Upon the issuance by the RCB of a Certificate of Incorporation, the Singapore Company will be incorporated on and from the date stated in the Certificate.
A company is a business registered under the Companies Act, Chapter 50. It has the words 'Pte. Ltd.' or 'Ltd.' as part of its name.
A company can have one director who must be ordinarily resident in the country ie: a Singapore Citizen, a Permanent Resident, a person who has been issued an Employment Pass/Approval-In-Principle letter/Dependant's Pass. A foreigner who wishes to act as a local director of a company can apply for an Employment Pass/Approval-In-Principle letter from the Employment Pass Department of the Ministry of Manpower.
There must be at least 1 shareholder who can either be an individual of any nationality or a corporate person.
Timescale to incorporate a Company
Normally takes three days to incorporate your company.
At least one of the directors needs to be ordinary resident (this means someone with nationality, a Permanent Resident, or a person over 21 years of age who has been issued an Entrepass – right to residency, or an Employment Pass, or a Dependent Pass which gives residency to dependants of Singapore residents).
The shareholders can be any nationality. Sometimes should the shareholders be nationals of China, Bangladesh or Pakistan or some other countries, or be corporate shareholders from these countries, the incorporation can take a little longer. Should this be the case, the authorities processing the incorporation may ask for more information about the incorporation. Only one shareholder is required and the maximum number of members in fifty. Shareholders can be a corporation and it is not a requirement to appoint a local resident shareholder. A director and shareholder can be the same person. Details are kept with the Company Registry, and available for public inspection of all current shareholders
Every company must appoint a company secretary within 6 months of the company incorporation. The person appointed must be a Singapore resident: this means someone with nationality, a Permanent Resident, or a person over 21 years of age who has been issued an Entrepass – right to residency, or an Employment Pass, or a 'Dependent Pass' which gives residency to dependents of Singapore residents.
The minimum issued share capital is SPD 1, there is no authorised share capital as there is in European companies.
The company does not have to keep records in Singapore. If the company chooses to keep records they can be kept anywhere in the World. Financial Statements need to be lodged with the tax authorities in Singapore.
The taxation system in Singapore is territorial. Tax is levied on income accrued and derived in Singapore, and foreign income remitted into Singapore. Singapore's tax rate is one of the lowest in Asia and the system is less burdensome. In addition to its relatively low tax rate, there are various tax exemptions and tax concessions for companies which qualify under different economic incentive programmes. Effective from June 2003, foreign dividends and foreign branch profits and service income derived from foreign sources remitted into Singapore are exempted from tax, subject to conditions. Singapore has also abolished withholding tax on dividend. Also Singapore does not impose tax on capital gains. Goods and Services Tax is applicable in Singapore. It adopts a simple and single goods and services tax system which is easy to administer. Singapore has a network of more than 40 double tax treaties with both regional and other trading partners. Singapore's taxation structure & incentive schemes have been put in place to help companies grow their business, such as: The first S$100,000 net profit (of a Singapore exempt private company), for the first 3 years from the date of company's incorporation, is tax-free. And in order to qualify for this tax exemption, at least 10% of the shares must be hold by an individual shareholder. Legal Tax Minimization – Offshore income earned outside Singapore is not subject to local tax, if not remitted back to a Singapore Bank. Thus, a properly structured Singapore company is the perfect entity to book international profits in a wholly legal manner. The corporate tax rate is 17% and the maximum income tax rate is 20%
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