Why is Singapore a recommendable jurisdiction for starting your company? It really offers a lot of advantages you can benefit from, like the ease of company incorporation and doing business, a pro-business regulatory environment, well-developed infrastructure, and a benign tax system. The city-state has everything for your business to prosper, and it is a global economic hub that provides tangible support to startups. In short, this is a jurisdiction not to miss!
We would like to invite you to our portal to read more detailed information on the company registering in Singapore, local banking, and other aspects of doing business in this Asian hub to make a well-grounded decision. The authors of our articles are experienced specialists who help people all over the world overcome the administrative barriers related to doing business abroad, opening a foreign bank account, accounting and tax optimization in offshore jurisdictions, and much more.
You will need to read enough articles to understand the nuances or book a session with our experts to ask questions, share doubts, or discuss issues that are burning for you. Some of the services we provide are free: for example, if you decide that Singapore is not the best jurisdiction for you due to some reasons, we will find a suitable option to suit your needs at no cost. And if you want to obtain a fully operational company or bank account with minimum effort on your part, we can do the administrative work for you at an affordable fee!
When establishing a private limited company in Singapore, consider the advantages of structuring it as a holding company. A Singapore holding company provides a solid framework for business expansion, facilitating effective control and management of subsidiary entities while optimizing tax and regulatory benefits in this dynamic business environment.
Private Limited Company: An Overview of Benefits
A private liability company is the most important business form in Singapore as the liability of its members is limited by their contribution to the company. Here are the main advantages that make entrepreneurs opt for this company type:
- The company’s property can be transferred (that is, any shareholder can sell its shares at any time).
- The private limited company’s authorized capital can be increased by attracting more funds to the company (new members make their contributions).
- New shareholders can join the company and obtain a participation share at any time.
- A private limited company in Singapore can obtain local loans.
- The company continues its operations even if one or more of its shareholders die.
- The duration of the private limited company’s activities is unlimited.
- Your company will operate in accordance with transparent and easily comprehensible Singapore business laws.
There are advantages that may easily turn into disadvantages: everything depends on your priorities! For example, clearly established rules are easy to comply with (which is an advantage) and hard to breach (which may be a disadvantage for some entrepreneurs). Here are the features that may be treated as advantages by the majority of business people (but not always):
- Relatively high cost of company registration. You will pay more than in the US or the UK, but less than in Europe. You will need to take a good look at all the advantages of Singapore to decide whether the price is justified for you.
- You will have to strictly comply with the Companies Act or pay a fine. The regulations you will have to follow are clear and contain no limitations whatsoever for you if the business you conduct is perfectly legal.
- You will be required to submit annual tax returns and director’s reports. However, similar requirements exist in many countries, and offshore jurisdictions are probably the only way to get rid of this obligation.
- You will need at least one director and at least one secretary who should be residents of Singapore. Your company cannot be considered a tax resident of the city-state (and take advantage of double taxation treaties) unless it has a local director.
- Company directors will need to make public the information about their participation share. This is a common practice in many countries, and Singapore is not an exception.
- The costs of company maintenance (administrative/operational ones) are not very low. However, that depends on which country you take for comparison.
- If you decide to dissolve your private company, you will need to follow the voluntary liquidation procedure. The registry-keeping authorities set no requirements whatsoever for the company if you decide to wind it up, which is good news.
- You will need to comply with the requirements of the Accounting Corporate and Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). It means that you will need to submit your financial reports to the registry and tax service. However, there is nothing exceptional in this practice.
This list shows that a company in Singapore has to strictly follow the regulations set and it does not have the freedom offered by many offshore jurisdictions. Nevertheless, it has a much higher status, which may be a decisive factor for some of you.
Singapore Private Limited Company: Peculiarities
- It is a legal entity that is separated from directors/shareholders
- It is entitled to file and defend claims on its behalf
- It has the right to possess real property
- The number of shareholders may range from 1 to 50
- It is entitled to tax benefits and preferences
Private Limited Company Must-Haves
- One shareholder who can be an individual or a legal entity
- One director (an individual of at least 18 years of age who is an ordinarily resident of Singapore)
- One secretary
- Authorized capital (you can start with SGD 1)
- A local registered office
Tax Rates in Singapore
- The corporate tax rate is 17%, and it is only paid if you generate your profits in Singapore. If 100% of your income is derived abroad, you are not liable for corporate tax.
- You may be eligible for partial or three-year tax exemptions.
- All dividends paid by legal entities that are tax residents in Singapore are not taxable in the hands of the shareholder.
Conclusion
Singapore is by no means a jurisdiction for everyone – however, if it meets your criteria, you will hardly regret starting a company here! Click on the above link to read more detailed information on Private Limited Companies in Singapore and get in touch with our experts who will help you with company registration and understanding the nuances of business in Singapore.
