In recent years, Singapore has become an increasingly popular country for business owners or entrepreneurs when it comes to company incorporation. Why is that so? According to an article by The Straits Times, Singapore’s competitive corporate tax rate of 17 per cent and double-tax agreements signed with over 80 countries make it highly attractive for incorporation.
Adding to the charm is that Singapore has also received several accolades for its business-friendly policies and has been consistently ranked by the World Bank in the top 5 for ease of doing business across 190 countries.
Singapore is recognised as a global business hub due to various reasons such as political stability, sound infrastructure, skilled manpower, open business policies and respect for intellectual property rights.
Hence many multinational companies have chosen Singapore as their preferred country of new business incorporation, next to 154,000 small and medium enterprises. Many business owners and entrepreneurs regard Singapore as a springboard for tapping into other emerging markets in Asia.
If you are still wondering whether Singapore is truly the right place for you to start a business, here are 10 great WHYS you should not delay any further:
1. Strategic Location
Singapore is centrally located in Southeast Asia and this alone makes it a strategic gateway to the continent’s 3 billion people. Some of the affluent and important economies are just a short plane ride away – China, Malaysia, Australia and India.
Singapore’s port is recognised as a major international Maritime Centre. Singapore Changi Airport is a world class ranked airport that caters to approximately 20 million passengers every year and provides flights to almost all major cities worldwide.
Many first time visitors to Singapore are amazed by the solid infrastructure that includes the country’s transport system, airport, hotels, internet connectivity and commercial buildings etc.
Singapore is a young country compared to most so most of the infrastructure is very new and modern, making it a conducive and productive environment for company incorporation and business growth.
Singapore’s laws and regulations are very strict so if any misconduct is discovered, harsh punishment will be enforced and that includes corruption. Hence, Singapore is ranked as one of the least corrupt countries in the world, making it desirable for incorporation. There are also statutory bodies set up to oversee business activities in Singapore so a strong framework exists to ensure regulations are followed accordingly.
4. Ease of Incorporation
Singapore has one of the most efficient and bureaucracy-free business frameworks in the world. Since 2012, it has been ranked the first worldwide by the World Bank for ease of doing business.
The process and requirements for company incorporation in Singapore are straightforward and it takes a short period of time to incorporate a new company in most cases. The same principle applies to annual filing and compliance requirements – simple and easy.
5. Attractive Tax System
Singapore has one of the world’s simplest tax systems and lowest tax rates. There are no levies for taxes on capital gains received from a business or on dividends distributed to shareholders. This makes it extremely attractive to entrepreneurs who are keen in company incorporation in Singapore
A tiered tax system is used in Singapore for both personal and corporate taxes. New companies receive significant tax breaks during the first 3 years, thereby reducing the tax rate to 0% for the first $100K of income. The corporate tax rate is capped at 17%. Corporate profits are not double taxed when they are distributed as dividends to shareholders so they are tax-free.
6. No Double Taxation
Singapore has an extensive network of Avoidance of Double Taxation Agreements (DTAs) with over 50 countries. These agreements are made and designed to ensure that economic transactions between Singapore and the treaty country do not suffer from double taxation. Singapore also provides Unilateral Tax Credits (UTCs) for countries whch it does not have a DTA. Hence the probability of double taxation is almost zero.
7. 100% Foreign Ownership and No Currency Controls
Singapore allows a foreigner to own 100% of the stock of a company incorporated in Singapore so there is no need for local shareholders or partners. This allows you to start company incorporation with your desired capital structure and have the authority to distribute ownership to suit your investment needs. There are also no restrictions on the amount of capital that you can bring from your home country to invest in your Singapore company.
There are no restrictions on the repatriation of profits and similarly to the local business owners, no taxes are imposed on capital gains a business received and no taxes are levied on dividends distributed to the shareholders.
There are also no restrictions on the movement of foreign currency in and out of Singapore. This provides huge flexibility to frictionless movement of funds across borders and in turn, a smoother and more efficient business operation in Singapore.
8. Robust Economy
Singapore has a well-developed free market economy that is based primarily on trade, finance and manufacturing. The country has managed to achieve a very low unemployment rate while maintaining low inflation. There is no external public debt and Singapore has been investing its resources actively. It funds housing, education, transport and healthcare programs. When it comes to company incorporation, you definitely want to do it in a country with strong and stable economy.
9. Great Support For Startups
The Singapore government has many initiatives to help businesses and these include grants, tax incentives and assistance schemes to support startups in their initial entrepreneurial journey.
With certain sectors, the government also subsidises the labour costs of a new business. These benefits are available to local and foreign-owned businesses. Singapore has also nurtured its venture funding community in the last decade so by doing your company incorporation here, you gain access to these resources too.
10. Productive Workforce
Singapore has a very good and sound education system so its students receive high scores on global comparative standards. These students eventually become part of Singapore’s workforce and bring excellence to their work. Singapore has a reputation for being hardworking, productive and rule-following hence productivity is optimal.
Its liberal immigration policy also allows global talent to obtain and maintain work visas or permanent residence easily. Almost one third of Singapore’s workforce is from overseas.
In summary, Singapore is a great place for doing business, in terms of framework, tax rates and flexibility in operations. We wish you all the best in your entrepreneurial journey!