Benefits of Incorporating in Singapore

 

There is a reason why entrepreneurs from all over the world prefer Singapore. The social, political, and economic factors are highly favourable for starting a small business in Singapore for foreigners. Here are some benefits of incorporating in Singapore:

1. Tax Exemptions and Low Corporate Tax Rates

Singapore supports budding entrepreneurs by introducing many tax exemptions, incentives, deductions, and unbeatably low corporate tax rates.

For instance, there is no tax on capital gains or dividends, and the tax rate on profit is 17%. There are many interesting schemes to promote the growth of startups.

Startups get 100% tax exemption on their first SGD 100,000 chargeable income and 50% tax exemption on the next SGD 200,000 income, effective for the first three years of their operation.

There is no double taxation when your company generates income from the list of countries Singapore has made double taxation avoidance agreements with.

2. 100% Shareholding by Foreigners (Individual or Corporate)

Singapore allows foreigners or foreign corporate entities to own 100% shares of a company that’s registered in Singapore and operating from there.

There must be one nominal director who should be a permanent resident of Singapore. But shareholders can be foreigners and don’t necessarily need to be from Singapore.

If every shareholder is residing overseas, they can appoint a manager who stays locally.

3. Easier Process of Incorporation (Online)

One of the main benefits of incorporating in Singapore is the ease of incorporation. You don’t have to visit the country and stay there to incorporate your business. The whole incorporation process happens through the ACRA’s online portal.

You can finish it within one hour when you get assistance from an external agency for incorporating a business in Singapore. There are centralized document management systems where documents can be uploaded.

These service companies also help you with hiring directors and the company secretary.

4. Ease of Funding

Singapore offers numerous funding options to new startups for both citizens and foreigners.

Some major funding options utilized by startups in Singapore are crowdfunding, bootstrapping programs, getting help from investors and VCs, accelerators, and incubator programs.

Obtaining business loans from private and public banks is also easily accessible. These quick and struggle-free funding options make setting up a business in Singapore easier for foreigners.

5. Supportive Government Policies for Startups

Selected startups can avail of grants and equity funding from government-run boards. Collaborating with large Singapore companies and the Singapore government, these boards offer a variety of funding programs, business loans, and cash grants.

Their regulations and compliance policies for both incorporating and running a business are very easy to follow without any red-tapism.

6. A Talented and Productive Workforce

After incorporating your business, you will need a workforce to begin operations. Hiring a well-talented workforce won’t be an issue in Singapore, as the country is filled with a highly-skilled, dedicated, and productive workforce.

Their educational system is excellent, producing highly educated professionals every year. They are known for their hard work and loyalty.

Since the majority of the workforce is well-versed in English, communication will not be an issue.

Singapore is filled with monumental buildings and impressive infrastructure. In 2021’s infrastructure index, Singapore obtained the number one position compared to all other countries in the world.

Starting a business in Singapore won’t be a big deal, as you can find perfectly designed workspaces in prime locations.

 

 

8. Start with Minimum Paid-Up Capital of SGD 1

Paid-up capital is the total amount collected from shareholders for their allocated shares. The best thing about incorporating a business in Singapore is its low paid-up capital. The total paid-up capital required during the incorporation process is SGD 1.

Small companies with a lesser number of partners won’t have to gather large capital amounts instantly. This low capital requirement is favorable for them.

9. No Authorized Capital Required

Authorized capital is the total amount of valuation of every share of the company. If a company has 10 shares and each is valued at SGD 100, then the authorized capital is SGD 1000.

Companies had to specify the value of authorized capital during incorporation. However, after the Companies (Amendment) Act 2005 was introduced, the authorized capital requirement was abolished, and companies are only required to work on the paid-up capital.

The authorized capital was removed mainly because it set a cap on the overall value of company shares, which could neither be reduced nor increased.

10. Audit Exemption for Small Companies and Small Groups

Ever since the amended Act came into force in 2015, businesses that declare themselves as small companies are not mandated to hire an auditor and conduct annual internal audits. The criteria they have to meet are:

- The annual revenue shouldn’t exceed SGD 10 million, and the value of the company’s assets for the auditing period should not exceed SGD 10 million.

- The total employee count should not exceed 50.

Groups of companies are eligible for audit exemption provided their consolidated values meet the above requirements.

11. Relocation Visas (Entrepreneur Visa & Work Visa)

Singapore encourages entrepreneurs and professionals to move to the country and contribute to its growth and development. It is easy to apply for a work and entrepreneurship visa to relocate there for employment purposes.

Relocating to the country to run the business or relocating employees to manage operations will not be challenging.

If you have decided to start your business in Singapore, it's advisable to engage Devenir Corporate Services for a smoother experience. Explore our services to make an informed choice