If you were to start a business, namely in Asia, you would inevitably factor in starting it in Singapore, among others. Here are some reasons which may compel you to eventually start your business, and company, in Singapore.
1) Singapore has one of the lowest corporate taxes in the world
The corporate tax rate is 17 per cent. The Singapore government also has many tax incentives for business owners to incorporate their companies in Singapore. For example, there are tax incentives and rebates for companies and these incentives are even more attractive for startups. In fact, currently, there is a tax incentive for newly set up companies where only 25 per cent of the first SGD$100,000 profit is considered for tax. On top of that, there is a 20 per cent tax rebate. This brings the effective corporate tax rate down to a low single digit.
Here are some articles on the tax reliefs for new startups as well as older companies:
2) Singapore has attractive tax frameworks and extensive trade agreements
Singapore has, to date, 21 free trade agreements and over 70 comprehensive avoidance of double tax agreements with many countries around the world. What this means is that a Singapore business or company can trade freely with the other signatories of the free trade agreements and income that is taxed in Singapore will not be taxed twice in countries with an avoidance of double tax agreement.
3) Singapore is corruption free
This is important for businesses as it allows them to properly plan their expenses. In many countries where corruption is rife, the true cost of doing business is unknown. It may include many layers of bribes and it is difficult to reconcile these costs into the accounts of the business or company. In Singapore, prices of applications for permits and licences are clearly stated on government websites and forms and it is close to impossible that a government official will ask you for a bribe. The penalties for corruption are very significant in Singapore and this has helped it create a corrupt-free society.
4) Singapore is stable
The ruling party has been in power for just about as long as Singapore has been independent. This means that you can be assured that the current form of government will not change for the foreseeable future. In fact, the Singapore government makes plans decades ahead of time and releases white papers discussing and planning for the Singapore decades away. In many countries where political upheaval is taking a toll on the business environment, Singapore sticks out as a beacon of stability. You can safely start a business in Singapore knowing that the rules of business and the environment that you are in when in Singapore will not change much.
5) Singapore has world-class infrastructure
It is not easy to build the world’s top international airport, a bustling port and a global financial centre all in one tiny island but that is exactly what Singapore has done. Crammed in an area of a little over 721 square kilometres is a place where many top multinational corporations have their headquarters located.
6) Singapore has a good reputation and standing with the rest of the world
In doing business with the rest of the world, there are instances where companies or individuals from certain entities from certain countries may have difficulty transferring monies or making payments. Singapore companies do not have that issue. Due to its reputation of incorruptibility and strict financial regulation, the rest of the world view Singapore companies and banks are seen as safe entities to deal with. Unlike certain tax havens where there is a significant possibility that companies are merely empty shells for monies to be laundered, Singapore companies are usually viewed as proper entities with legitimate dealings. Thus if you would like to have an easier time dealing with the rest of the world especially when it comes to payments, then you should set up your business in Singapore.
7) Singapore has a strong rule of law and a very strong legal system
Break the law and the penalties can be rather severe. This is why crime rates are extremely low in Singapore. Yet for anyone who visits Singapore, it can be a very enjoyable city and one of the best places to live. The people in Singapore are generally law-abiding people who understand that if they work within the constraints of the law, the city-state is an excellent place to work and live. Singapore has an excellent dispute resolution and case management. Claims, court fees and initial summons can be settled electronically online. The good legal system ensures that everyone has access to a fair trial and transfer of property and assets is a seamless and hassle-free process. In fact, CNBC has named Singapore as the easiest place to do business.
8) You will have access to a pool of highly skilled and educated pool of local talent
In Singapore, education is taken very seriously and Singapore workers are highly skilled and educated. Being an education hub of the region, almost all Singapore residents obtain post-secondary education and the Singapore education system is usually tailored to suit the ever-changing global economy. For example, digital technology is being incorporated into the education system to better prepare Singapore students for the digital age.
9) All documents are in English
The main spoken and written language in Singapore is English. Even though Singapore has a population that is predominantly Chinese, English is the common language and just about everyone in Singapore speaks and writes English. Documents and contracts are also in English.
10) It does not cost much to start a business in Singapore
If you are looking to incorporate a Singapore company, you will need to engage an ACRA registered filing agent. ACRA stands for Accounting and Corporate Regulatory Authority of Singapore and it is the body that governs companies in Singapore. The cost to incorporate a local company starts from a couple of hundreds of Singapore dollars. The company can open and operate a bank account which is usually free or have very low annual charges.
Foreigners are welcome to open a Singapore company to do legitimate business. A Singapore company can be 100 per cent foreign-owned and foreigners can be directors of the Singapore company. Singapore companies can vary their share structure and should use the company constitution to do so.
The editorial team at Singapore Secretary Services
This article first appeared on Singapore Secretary Services Resource Page.