Singapore

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Singapore is a city, a state and an island all in one. Formerly part of the British Empire, it merged with Malaysia in 1963 and became a fully independent state in 1965.

Singapore is a developed economy with an extremely wealthy population. In fact, according to the IMF, last year it was the third wealthiest country in the world (after Luxembourg and Qatar) in terms of economic output per head. That puts it ahead of Norway, Switzerland and the U.S.
There are 5 million people living in Singapore, made up of three major ethnic groups: Chinese, Indian and Malay. Mandarin-speaking Chinese are the biggest group by far, making up about 77% of the total population.

Population: 5.53 million (2015)
Life expectancy: 82.14 years
GDP PPP: $452 billion (2014)
GDP/per capita: $82.762 (rank 3)
Public debt: USD 292.168.389.000 (national debt clock)
Unemployment: 1.9%
Major trading partners: China, Malesia, Hong Kong, Indonesia, USA, Japan, South-Korea, Taiwan, Australia, Thailand, Vietnam, India, Panama, Netherlands, Philippines

 


Advantages

  • The World Bank has ranked Singapore the best country to do business in
  • Singapore is very well suitable for running global business
  • Recruiting very competent employees is relatively easy
  • Singaporean companies pay an average of 2% of taxes from profits

Disadvantages

  • At least 1 local director required
  • Singapore is very dependent on fluctuations in global economy
  • Economic growth was stagnant at 1.8% for the first three months of 2016. Prices have been falling for 17 months in a row, so deflation is a serious issue. Global trade is slowing, the real estate market is falling and the growth trajectory of China (Singapore’s largest import and export market) is a source of major uncertainty.

The World Banks “Ease of Doing Business ranking”:

  • Overall rank: rank 1st
  • Starting a business: rank 10 (average processing time 2.5 days)
  • Dealing with construction permits: rank 1 (average processing time 26 days)
  • Getting electricity: rank 6 (average processing time 31 days)
  • Registering property: rank 17 (average processing time 4.5 days)
  • Getting credit: rank 19 (change: -1)
  • Protecting minority investors: rank 1
  • Paying taxes: rank 5 (average company tax from profits 2%, average time used for taxation 83.5 hours per year)
  • Trading across borders: rank 41
  • Enforcing contract: rank 1 (375 days, average cost from standing amount 13,3%)
  • Resolving Insolvency: rank 1

Who can start a new business in Singapore:

  • Any legal person/business (no matter the nationality) that has the documentation needed for registration (in accordance with the laws of Singapore)

Who can own property or shares of a Singaporean company:

  • A company of any nationality
  • A private person of any nationality

Who can act as a director or member of the board:

  • Private person of over 18 years old (no limitations regarding nationality)
  • There needs to be at least 1 director permanently living in Singapore

Business entities in Singapore:

  • LLC, private or public (Limited Liability Company)
  • Sole Proprietorship
  • Partnership (General, Limited or Limited Liability Partnership
  • Foreign Company (Subsidiary, Branch or Representative Office)

Requirements to incorporate in Singapore:

  • At least 1 owner
  • At least 1 local director
  • Must have official registered address in Singapore

Opening bank account:

  • Incorporation documents, trade register documents and articles of association (in accordance with the laws of Singapore)
  • Board of directors’ rule of opening the account
  • Authentication of the company’s signatories’ identities

Public register of shareholders and directors:

  • Directors: yes
  • Shareholders: no

Allowed trades:

  • Through a Singaporean company one may practice any legal business activities that do not require special permits (such as in the fields of insurance and banking)

Accounting and reporting regulations:

  • Accounting obligation
  • Singaporean company has to apply to GST register if its homeland sales during the past 12 months have exceeded 1 million Singapore Dollars, or if presumable, this amount will be passed during the following 12 months. GST tax applies to the sales of services and goods. Quarterly reporting to Singaporean tax authority IRAS.
  • Financial statement must be delivered to the authorities at the end of every accounting period
  • If the company’s revenue exceeds S$55 million or if it has over 20 employees or if all the owners aren’t private people the company is obligated to audit accounts.
  • Company must keep register of shareholders. Changes in the register must be reported within 3 months time.
  • Changes in the managers of the company must be reported

How funds can be withdrawn from company:

  • Company can pay dividends from its own capital to shareholders after end of the book year
  • Company can lend money to another company and / or person given that loan agreement with minimum interest and payment terms have been made. Owners cannot owe money for the company in the end of the book year.
  • Company can pay dividends to shareholder from its own capital at the end of fiscal year
  • Company can pay salary to it´s employees given it has registered in the Tax Administration´s employer register. Employer is obliged to pay tax withheld at source from all wages paid to employees, along with making employer´s social security contributions.
  • Company can pay allowance, such as kilometer allowance for using they own car, per diem and meal money, to owners and employees in order to cover their temporary business travel expenses
  • Company can pay meeting allowances for its directors, members of the board and owners
  • Company can transfer funds to its subsidiary, both domestic and foreign (group contributions).
  • Company can invest in shares, funds or real estate

Can you transfer Singaporean company to another jurisdiction?:

  • No

How to terminate a business in Singapore:

  • Company may be sold
  • Filing bankruptcy
  • Terminating business activities through investigation

Advantages

  • One of the highest ranked countries to live in
  • Low personal taxation
  • Well suitable for “expats”

Disadvantages

  • High cost of living
  • High requirements for immigration

Freedom Index: Singapore

  • Overall rank: 13th (69/100)
  • Property rights: 90/100
  • Freedom from taxes: 91/100
  • Freedom of speech/religion: 56/100
  • Limited government: 91/100
  • Gun rights: 15/100
  • Drug rights: 10/100
  • Freedom from corruption: 86/100
  • Freedom from inflation: 82/100
  • Business freedom: 97/100

Corporate Taxation in Singapore

Corporate tax17% (though there are many exceptions that lower the tax)
GST (ALV) applying for registerTurnover more than S$1milj / year
GST (ALV)7% (or 0%)
Tax at source / from dividend0%
Tax at source / from royalties10%, if no exception
Tax at source from interests15%, if no exception
Stamp duty1% / 2% / 3%
Capital gains taxConsidered as regular income
Property tax0-10% (progressive)
Income tax0%
Wealth tax0%
Tax treaties76 countries
Tax authorityInland Revenue Authority of Singapore (IRAS)

Services for corporations interested in Singapore

  • Consultation and advisory (business, tax, legal) services before incorporation / during your business operations in Singapore
  • Assistance in incorporation process: Tailor made company formation or shelf companies available
  • Administration services available for new companies incorporated through Novasigma

For corporations operating in Singapore

  • Banking and financial solutions for a Singapore company
  • Accounting and Audit services for a Singapore company
  • Legal services for a Singapore company

For individuals and families interested in Singapore

  • Consultation and advisory (tax, legal) services before re-located to Singapore
  • Assistance in immigration process when moving to Singapore (residency permanent, work permit, tax residency)
  • Incorporation and administration services for your privately held Singapore holding company

For individuals and families who hold the Singapore residency

  • Banking services in Singapore for private persons
  • Local and international accounting services for Singapore tax residents
  • Local and international legal services for Singapore residents

Interested in Singapore? Please leave us a message and we will come back to you shortly.

In cases KYC or/and Due Diligence process required Novasigma requires a personal meeting with all its new clients before proceeding any assignment

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