Understanding the Eligibility Requirements for Business Formation in Singapore!
by Milind P. Marketing ManagerSingapore
is considered as a tax haven country as it not only offers relatively low
corporate tax rates but also offers several tax breaks to the taxpayers. The
country has a highly developed and successful free market economy along with
its strong international trading links which helps the country to attract major
investments from all over the world.
Singapore
is the world's fourth-largest financial hub and ranks as the second-busiest
port globally. When considering Purchasing Power Parity (PPP), Singapore is
ranked at sixth place according to their per capita GDP as of 2023. It is also
the third least corrupt country in the world and is the only country in Asia
with an AAA sovereign credit rating from all major rating agencies.
If
you are considering registering a
business in Singapore, it is important to understand the eligibility
requirements and criteria that need to be met.
As
per the Singapore Companies Act any person who is either a resident or a
non-resident over the age of 18 years who has not been convicted of any legal
offence or bankruptcy, can start a business or register a company with 100%
shareholding in Singapore and possess 100% ownership and shareholding of the
company without facing any hurdles.
The
only point to be kept in mind while registering is that Singapore law does not
allow foreign individuals or entities to self-register a company.
All you need is,
- Local registered address,
- Resident director,
- Nominee director who is a local resident that is either a citizen or Permanent resident(PR) of Singapore (only in case of foreigner),
- Shareholder and
- Corporate/Company secretary
.
There is no requirement to be physically present at the time of company registration, but some of the banks in Singapore require the physical presence of the company owners at the time of bank account opening as part of their due diligence procedure.
There is no minimum paid up capital requirement in Singapore but
amount of paid up capital should be sufficient for the intended use of business
activities.
Types of Business Entities in Singapore are:
·
Sole Proprietorship
Only
available to individuals who are Singapore citizens, permanent residents, or
EntrePass holders only.
·
Partnership
Partners
can be Singapore citizens, permanent residents, or EntrePass holders.
·
Private Limited Company
The most common and
preferred type of business entity in Singapore is the Private Limited Company.
The limit of
shareholders is it can have up to 50 shareholders, with at least one director
who is ordinary resident in Singapore.
There is limited
liability for shareholders and has separate legal entity from its owners.
The Inland Revenue Authority of Singapore (IRAS) serves as the tax regulatory body in Singapore. Singapore follows calendar year i.e. 1st January to 31st December. The due date for CIT return is 30th November.
The
corporate income tax (CIT) rate is 17%. A 75% tax exemption applies to the
initial SGD 10,000 of regular taxable income and 50% of the next SGD190,000 is
exempt from tax. The balance of income is fully chargeable to tax at the
standard rate of 17%.
For startup companies a 75% tax exemption applies to the initial SGD 100,000 of regular taxable income and 50% of the next SGD100,000 is exempt from tax. The balance of income is fully chargeable to tax at the standard rate of 17%. Property development and investment holding firms are not eligible for the startup exemption.
The
Standard VAT rate/Goods and services tax is 8% (9% from 1 January 2024).
All the above mentioned liberal rules and tax provisions makes company formation hazel free in Singapore and making the country an ideal place to start and grow a business. Whether a person chooses to establish a sole proprietorship, partnership, or private limited company, it is important to comply with the necessary requirements and regulations. By doing so, one can ensure a smooth and successful start to your business venture in Singapore.
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Created on Sep 27th 2023 02:04. Viewed 165 times.