Why You Should Consider Company Incorporation in Singapore
Numerous organizations that track the business potential in countries around the globe have consistently ranked Singapore very highly on their lists. The country is known for the ease with which new businesses can be started in the country. In 2016, The World Bank Group ranked Singapore as the best country in the world for “Doing Business”- the 10th year in a row Singapore has ranked top of this survey. So what makes Singapore such a great country for doing business? What makes it stand out from countries around the globe? Here are some of the main reasons why you should register a new company in Singapore.
A Strong Economy
Singapore has a free market economy that is based around trade, finance, and manufacturing. It is estimated that around 75% of the country’s GDP is services alone, which employs 80% of the workforce. The country has managed to achieve one of the lowest unemployment rates in the world, whilst simultaneously keeping inflation low. In 2014 alone the country grew at 2.8% and its per capita GDP in 2015 is estimated at more than $80k. Its gross national savings are nearly 50% of its GDP which is considerably higher than most countries around the world. In total, its exports are worth around S$500 billion, and with only 5.25 million citizens; the country has the 10th largest foreign currency reserves in the world. The country has no external public debt and has been actively investing its capital around the world. The state itself funds housing, education, transport, and health care subsidy programs. For such a small country, this makes Singapore one of the most financially robust countries in the world and the perfect place for incorporating a new business.
Fantastic Tax System
Singapore has one of the world’s most comprehensive tax systems. It does not levy tax on capital gains or on dividends from a business. This makes it an attractive location for companies who want to incorporate a new business. Singapore makes use of a tiered tax system for both personal and corporate taxes. New firms have the chance to receive significant tax breaks during their first 3 years reducing their tax rate to 0% for the first S$100k of income and the corporate tax rate is capped at 17%.
Similarly, the personal tax rate is also fantastic for all residents. It starts at 0% and increases gradually (up to 20%) for incomes above S$320,000. On top of this, corporate profits are not double-taxed when they are passed to shareholders as dividends. This means that all dividends are distributed to shareholders tax-free.
No Double Taxation
Singapore is well-known for its extensive network of Avoidance of Double Taxation Agreements (DTAs) with over 50 countries. These agreements have been carefully designed to ensure that all economic transactions between Singapore and the country do not suffer from double taxation. To further this, Singapore also provides Unilateral Tax Credits (UTCs) for countries that do not have a DTA and as a result, a Singapore tax resident is very unlikely to suffer from double taxation.
No Currency Controls and 100% Foreign Ownership
Unlike many other countries around the globe, Singapore allows a foreigner to own 100% of the stock of a Singapore incorporated company. You are not required to have any local partners or shareholders. This allows new businesses to start with the type of capital structure that suits you. There are also no restrictions on the amount of capital you choose to bring from your home company to invest in a Singapore company.
The Singapore Government does not impose any restrictions on the movement of foreign currency into or out of the country. This allows for seamless movement of funds across borders which can be very flexible for business.
Easy To Incorporate and Operate
Company incorporation in Singapore has one of the most efficient frameworks in the world. This is one of the key reasons why the country ranks so highly for ease of business. The requirements for incorporating a business are very straightforward and the procedure can be completed with ease. If you want to incorporate a new business, this can take less than a day. On top of this, annual compliance requirements are very easy to follow and do not require any complex paperwork.
Fantastic Startup Support
Setting up a business is difficult no matter where you come from. However, Singapore has adopted a pro-growth and innovation-friendly approach. New startups can enjoy tax incentives, grants, and assistance schemes for additional support. In certain sectors, the government will also help by subsidizing the labour costs for new businesses. These benefits are available to both local and foreign-owned businesses.
These innovative policies have allowed Singapore to become a business hub around the globe. It is now the premier venue in Asia for venture funds, providing several funding sources for new startups.
Highly Skilled Workforce
Singapore has one of the best education systems in the world, which results in a globally competitive workforce. Students usually stay in the country after they have graduated and are known for traits such as hardworking, rule-following, productive, and highly educated. On top of this, Singapore also implements a liberal immigration policy which helps to bring upcoming talent to the country. They make it very easy to obtain a work visa and as a result, nearly ⅓ of the country’s workforce is foreign.