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It is not surprising to see Singapore as a burgeoning powerhouse in the Asian business industry. Because of its non-toxic business environment, what with its friendly business legislations, a lot of entrepreneurs really choose Singapore as a place for their ventures. Not to mention that the country is conveniently located at the heart of the flourishing Asian economy.

Most of the businesses, if not all, situated in Singapore, actually gain benefits from the country’s ties with other booming tiger economies. It also has the reputation as a trustworthy jurisdiction to work in and a country with great corporate tax policies. They have competitive, but fair, tax rates that other jurisdictions do not offer. Because of all of this, Singapore definitely has become one of the globally recognized business hubs.

If we look closely at the country’s tax policies, one can see why Singapore is so popular with businesses.

Corporate Tax in Singapore

Unlike other jurisdictions, in Singapore, they do not discriminate businesses according to their origin. Whether you are a local or a foreign business, you will be taxed all the same. If you look at it, it may seem like disadvantageous, but actually, Singapore favors both local and offshore business, therefore, resulting into a productive entrepreneurial culture in the country.

All businesses operating in Singapore pay taxes on all of their income coming from the country or are remitted to it. This means that if a company that is operating in Singapore gains most of its income from overseas business transactions; the business is not obliged and liable to pay tax in Singapore from a legal perspective. There are a lot of policies about business transactions; therefore, it is really recommended that entrepreneurs seek the help from professionals that are experts on the tax policies in Singapore, just so the business is sure that they are legally complying with the jurisdiction of Singapore.

General Corporate Tax Rates in Singapore (2010)

  • Tax rate went down from 18 percent to 17
  • Taxes are charged according to profit blocks. It depends on how much is the income. Tax is applied to the first 10,000 SGD at 4.5%. Next to be charged is at the 290,000 SGD profit bracket and is charged at 8.5%. Thereafter, the rest of the income falling above the 290,000 is taxed at 17%. For example, if a company only made 8,000 SGD for the year, they will only be taxed 360 SGD.

Singapore definitely has earned the respect from entrepreneurs all over the world because of its very flexible corporate tax policies. Their policies are very friendly, even to rookie companies who just incorporated. In their jurisdiction, new companies have tax exemptions, just so they can jumpstart their business easily, given the fact that they are starting from scratch. Singapore acknowledges the fact that it is very costly for new businesses to set up shop, so they created policies to make these newbies breathe a little bit easier. Their policy is that, for newly incorporated companies, whether local or foreign, they are exempt to pay taxes on their first 100,000 SGD of annual income. This is applicable for the company’s first three fiscal years and is only for companies that qualify in the following:

  • Must be registered tax payers in Singapore
  • Must have only 20 stockholders or less
  • Must have 10% of its stockholders be comprised of individuals

If the new company does not pass such criteria, there are still partial exemptions that apply. Instead of having the tax exemption on the 100,000-income bracket, they can have tax exempted on the 200,000 SGD bracket. The tax rate can be calculated at roughly around 8.5% on the company’s first 300,000 SGD of income, which is considered as a very low rate.

As one can observe, Singapore really does have a favorable tax environment for companies, without sacrificing its own welfare. Singapore has a very reputable status as a country as well, given its productivity and very good quality of living, even with its low and competitive tax rates. It makes one think why other countries have very high taxes when you can still have a good economy with charging smaller rates. Overall, Singapore, along with its good business policies and tax benefits, has truly transformed into a haven for entrepreneurs, making it a very important business environment globally.

More updated details about Tax Rates in Singapore can be found at IRAS.

Singapore has a very friendly atmosphere for carrying out business. It is a place where investments experience higher profits.  What differentiates Singapore from the other countries it is unique in the sense that it is highly business friendly. Two years ago, Singapore was ranked as the top competing country in the world.

Here are the top reasons that have mainly contributed to the moving of many multinational countries in to this small country of business investors.

1.     Modernization of the City and Live in.

Singapore is a modern city. Despite Singapore being a small state, it accommodates a huge population of about 5 million inhabitants. It has the best industries that are knowledge driven when ranked in the world. It is a city with different cultural activities. Singapore in the world of today is the city to work and live.

2.     It is Best in Business

The city has continuously transformed itself since 1970 from a minor business Center to a city of top financial hubs. It has the international transport systems. It is the most investment and trade in economy.

3.     Governance Consistence

The city’s governance is consistent with guidelines of the businesses. Any business is subjected to the access to a competent judicial system and to an impartial system. Anti-corruption policies and corporate governance are greatly enhanced.


4.     Easy Set Up

Entrepreneurs who move to Singapore to start up a business usually settle in less than one week. The super infrastructure, universal labor force which is highly skilled, the low costs of setting up and registering a new business and a good law that protects the investors from double taxation encourage more people to make an initiative of moving to its city.


5.     Innovative Industries

The government of Singapore has really worked hard in the protection of intellectual property to make sure that the innovations and the ideas are fully nurtured. This enhances competition at a greater deal. The economy has been skewed to the industries with high knowledge. All these activities of the government keeps the city a competitive one in the business way.


6.     Trade Free City

Singapore has signed the many business agreements with most of the countries in the world. The business here enjoys these agreements and trade freely. Double taxation is avoided to the Singaporean investments due to the guaranteed agreements.
The factors discussed are the major ones that make Singapore shine out as the solid region of financial hubs despite its small population and size. It performs various functions in business, accounting and even economy.

When you hear someone say they are planning to set up an offshore company, all it means is that that business owner is planning to set his business operations in an overseas setting. And if there’s one misconception about offshore companies, it’s that it is a business venture only well-off firms and corporations can afford. People perceive this as something not any business can easily undertake. But in the current globalization, setting up one’s company abroad has become more affordable for most business—not to mention the fact that it has become safer and easier to do. You can even do it without having to leave the comforts of your own home and be confined by the jurisdictions in the location where you’ll set up shop. You can have your business up and running in just a matter of few days. And with the changing world of business now, what with the increasing rate of risks and unstable business costs, setting up overseas may actually be more of a necessity nowadays, rather than just a business option.

The incorporation of offshore companies has actually been gaining a very unfair misconception and negative reputation in recent business news. When one says that the business is planning to setup an offshore operation, they tend to associate this undertaking as a way of tax evasion, as well as money laundering. Although there have been some instances of illegal business transactions from offshore companies, it does not necessarily mean that offshore businesses are illegitimate. In actuality, this business venture is absolutely legal and is a very legitimate strategy. In today’s very competitive business market, it is but natural that companies seek for strategies that will make them more efficient in terms of costs like tax payments. Different jurisdictions actually have varied tax policies so there are a lot of options to choose from for offshores. Some jurisdictions offer very attractive rates for income tax or on dividends, like in the British Virgin Islands, who has been considered as a tax haven, as well as Labuan. They have very favorable and attractive tax policies.

But if you look at it at a wider scope, the benefits that can be reaped from offshore businesses surpass taxation. It has definitely more advantages to offer, just like gaining a very favorable regulation from authorities overseas. This is a very good advantage, most especially for companies seeking to reduce risks and costs that are usually associated with government institutions. Because of the financial crisis in the global economy, markets across the world have increased their policies for foreign companies.

And so, in this situation, the offshore financial institutions become the perfect savior for companies limited by such regulations. They do this by using deregulated markets in investing financial products that can better manage an offshore company’s risk. This allows the offshore company to improve their revenue stream. When an offshore company opens, new markets start to open as well.

As the West market starts to saturate, it is a very good business strategy to open an offshore operation in the likes of world-class business environments, such as Singapore and Hong Kong. The jurisdictions in these markets allow businesses to expand their reach in the Asian markets. Because of these advantages, offshore financial centers have actually transformed into the most favored method of investment for those wanting to set up in emerging markets.

Here are some more advantages of offshore: increased privacy for company resources, protection of assets, lower investments, as well as lower costs of labor. In today’s world of business, it is no longer important to ponder on the decision whether one should set up an offshore company overseas, but actually, what’s important is to ponder on when and which jurisdiction should one start with?

 

 

When we look at Singapore, the favoring conditions for business are not only the proficient infrastructure, being the coming up city, linked to other major towns but also the government policy affects or rather influences a greater deal. The programme introduced by the Board of Economic Development in Singapore has made it easy for investors to enter, develop and relocate their firms. This programme has actually made many people to invest in this city.

Find out more about GIP here.

The programmes stated above were initiated as a way of reviewing globalization for easy entry management for foreign people with interest in investing in Singapore.

The Board in Singapore aids in opening of chances in collaborations of different businesses including networking of local business. However, the programme had schemes which gave immigration options for business men and women. These were to acquire permanent residency, attain different journey Visa, and get an Entrepreneurs’ Pass Social Visit and lastly an Entrepass.

Like for the first scheme about residence, one is legible to carrying out a business if if he/she trade over 1 million dollars in a new business start up and the property of resident is acquired at less than 50% of the investment amount. Other investment routes that included undertaking capital funds, foundations are also qualifying factors for permanent residency.

The journey Visa is a relief to the people who have to travel away of Singapore and go to their other enterprises somewhere else. This enables the entry of executives involved in business countries requiring Visa to Singapore. The legality of the Visits may be allowed 30 days of the validity time of the Visa the statement under which is incorporated in the programme.

The Target market, proposals of the business, type of business, previous businesses you have run, Strategy of development, reasons for your stay and even your working experience are to be provided to the Board of Economic Development for the acquisition of the letter of support before setting up a business. This only takes few days.

An Entrepass so long as it is viable and productive can be renewed. It helps to manage and control operations of business by facilitating the entry of entrepreneurs in Singapore. The added advantage of an Entrepass is that a family member can live in Singapore and start or capitalize on your business. An Entrepass can be acquired in about 6 weeks after the date of application.

Singapore provides the top life and an investing option. The government has facilitated and encouraged investors to have their businesses in Singapore and that is a major factor as to why many want to invest in this heart of Asia called Singapore.

Global investors are welcome to Singapore and pursue their dreams in business. Attain permanent residence in Singapore and enjoy so many privileges thereafter. Some of the advantages that you will enjoy include benefits on the local tax, your children will enjoy public system of education, there is free movement of your family in and out of Singapore and you can even buy together with your family land or property.

You ought to remember that after you attain Permanent Residence, your sons after attaining the age of 18 they will be obligated to do mandatory military service. If you are for the choice to move to Singapore and attain Permanent Residence this article will give a way forward.
Eligibility

For the acquisition of Permanent Residence, you must first of all get an entry pass. Four types of entry passes are:

It is also known as an Entrepass. One must acquire this document to have an enterprise in Singapore. It is also an advantage because there is no need to obtain work permit. An Entrepass has basic requirements which are enthusiasm to live in Singapore and starting of a business with potential to grow and ran physically. It is in use for 2 years and the good thing about it is that your spouse and children can live in Singapore and it can be renewed on the basis that the business is operational.

Pass for Employment

This pass operates for two years then it expires. This pass works for those with an aim of working in Singapore and it is eligible upon your literacy level and your income. An employment pass is divided in to various types

i.         A fixed income of greater than 7,000 Singapore dollars known as P1.

ii.         A fixed income of Singapore dollar between 3,500 and 7,000 known as P2.

iii.         Fixed income of greater than SGD 2,500 known as a Q1 Pass.

For the types above, one can apply for dependent pass except for a Q1 Pass which does not guarantee the parents long term visits.

An S Pass

Any skilled worker can apply for this Pass. Factors considered for an S Pass application are your salary, type of job, working experience and your qualifications. If your SGD is above 2,500 then you are eligible to apply to apply for Dependency Pass for the family.

Dependency Pass

This is a document for the family members whose person is in Singapore with an Entrepass.

Scheme for Permanent Residence

The schemes are given to people who have already attained Pass for Employees or an Entrepass. Further, if one has worked in the country for more than 6 months to a period of 2 years then he or she is eligible to attain this Scheme. The processing period is 3 months or more.

Once this Scheme is approved, the sons above 16 years can apply for the National Services.

For more information click on Migration to Singapore, or you may visit: http://www.paulhypepage.com

A good factor to look at when you’re deciding to set up your operations in any jurisdiction is their tax policies being implemented. If you compare different jurisdictions all over the world, Singapore, as well as Hong Kong, are considered as one of the jurisdictions that have business-friendly tax policies in force.

Tax Jurisdiction

Singapore Hong Kong
Taxes charged depend on territorial principle, meaning the companies or individuals are only taxed on the income sourced in Singapore Taxes charged depend on territorial principle, meaning taxes only apply to income that comes from Hong Kong
All income coming from offshore operations are only taxed when they are remitted in Singapore Offshore income are not taxed even with remittance to Hong Kong

 

Corporate Tax Rate
Singapore Hong Kong
Corporate Income Tax – 18%

As of 2010 – 17%

Note: For profits in the SGD 300,000 below bracket, tax rate is 9% and below. For profits above the said bracket, it is capped only at 18%.

Corporate Income Tax – 16.5%

 

Value-Added Tax/Sales Tax
Singapore Hong Kong
Rated at 7% No tax

 

Taxes on Capital Gains
Singapore Hong Kong
None None

 

Group Relief (in case of losses)
Singapore Hong Kong
Allowed Allowed

 

Withholding Tax
Singapore Hong Kong
Withholding tax is only applied to royalties, interests, management fees, technical fees, rentals on movable assets/properties, directors fees (applicable to non-residents, may it be a company or an individual). No withholding tax is charged on dividends. Withholding tax is applied to fees given to non-residents (entertainers or athletes), rentals on movable assets/properties. No withholding tax is charged on interest and the dividends.
Double Tax Agreements
Singapore Hong Kong
Singapore has more than fifty treaties on bilateral comprehensive taxes. Hong Kong has a DTA network composing of thirty-seven treaties.

 

Tax Year
Singapore Hong Kong
Fiscal year from the start of January (1) up to the last day of December (31) Fiscal year from the 1st of April to the 31st of March

 

Filing Tax Returns
Singapore Hong Kong
On or before the 31st of October, all tax returns and audit reports must already be filed with Singapore’s IRA (Inland Revenue Authority), with the exception of dormant companies (companies with no financial transactions for the current fiscal year), and exempted private companies (<20 shareholders, with all shares controlled by the company, yearly turnover should be less than 5 million) On or before the 31st of April, all tax returns and audit reports must already be filed with Hong Kong’s IRD (Inland Revenue Department). The auditor who accomplished the reports should be part and accredited by the Hong Kong Institute of CPAs. The filing is with the exception of dormant companies (companies with no financial transactions for the current fiscal year), and small companies (total gross profit is less than HKD 500,000)

For more on corporate tax in Singapore click here.