Reasons for Opting for Business Incorporation in Singaporeby Leslie S. Professional Content Writer
Modern companies are flexible in where they are located. They have found a great marketplace and home in Singapore. The experts have witnessed more than 17,000 foreign business incorporation in Singapore.
Singapore is strategically located on the sea and air route between the East and West. It allows it to function as an Entrepot. The nation has capitalized on the opportunity and has come up as one of the favored destinations for entrepreneurs and foreign direct investment.
Reasons for Conducting Business Incorporation in Singapore
The country is politically stable and has a pro-business attitude. Its bureaucracy is honest, and there is hardly any red-tape to bother business owners. It has strong air-connectivity with the Asian markets and has sea-links with the major ports in the world.
Singaporean is one of the best places to do business in. The country currently ranks 2nd for the "Ease of Doing Business" indicator in the report prepared by the World Bank. Let us see additional factors that make Singapore popular with investors and entrepreneurs.
The process for company incorporation in Singapore is highly optimized. It straightforward and has only 2 steps in it. It is simple as compared to the one in other countries.
The authorities here have made it free of bureaucratic hurdles. It enables the owners to commit to business incorporation Singapore and start their business activities without losing time.
Anyone, including foreigners over the age of 18 years, can incorporate their company in Singapore. The Company Law of Singapore allows foreigners to own 100% shareholding in their company.
There are other markets in Asia, where foreigners cannot own 100% shareholding in their own company. It allows business owners a free hand in running their company, and they do not have to share their profit with a native partner.
Corporate Income Tax
Singapore's taxation system is liberal. The headline corporate tax is pegged at 17%. However, in practice, due to tax exemption and benefits, the corporate tax paid by Singapore companies is often between 8.5%-9.5%.
The authorities run a Startup tax exemption scheme. Under it, new businesses get 75% of tax exemption on their first S$100,000 taxable income. Next, S$200,000 gets 50% tax exemption. Taxable income over S$300,000 is taxed at 17%.
Personal Income Tax
The resident taxpayers in Singapore pay progressive tax rates. The rates start at 0% for the first S$20,000 taxable income. The next, S$10,000 are taxed at 2%. It eventually tops at 22% for income over S$320,000.
Singapore does not apply any tax on capital gains. Similarly, it applies no tax on inherited property. The non-residents are either taxed at the flat rate of 15% or at the resident's rates.
Singapore has enacted strong laws to protect the Intellectual Property belonging to the businesses and individuals. It attracts companies that are mainly focused on research and development activities. It also reassures individual entrepreneurs trying to implement their innovative ideas.
Singapore's taxation system also favors investors. Singapore corporate tax is a single-tier affair. It means, once a company pays its corporate tax, its investors or shareholders will not have to pay any tax on their dividends.
The dividends are tax-free. And as per the law, they can move it out of Singapore whenever they find it suitable for their purpose.
In Singapore, a credible business can easily raise capital for its expansion or growth. However, the investors and financial institutes favor incorporated companies when it comes to funding. It is the reason why a large majority of entrepreneurs opt for company incorporation in Singapore.
The sole proprietorship and partnerships, since they depend on their owner's personal charisma for credibility, find it a little tough to raise capital.
Singapore has emerged as one of the leading financial hubs in Asia. The country offers well-equipped communication networks, a reliable mass transportation system, security, and world-class infrastructure to the business owners wanting to execute their business incorporation in Singapore.
Created on Aug 13th 2020 06:21. Viewed 353 times.