These tax breaks make the country especially appealing to entrepreneurs looking to register a company in Singapore. Furthermore, during the first three years, new enterprises receive significant tax benefits, with their tax rate reduced to 0% for the first SG$100,000 of income. The corporate income tax rate is limited to 17%. Similarly, the personal income tax rate remains very low, starting at 0% and progressively increasing to a maximum of 20% on income beyond SG$320,000.
When profits are distributed to shareholders in the form of dividends, they are not subject to double taxation. Finally, enterprises with a turnover of more than SG$1,000,000 are subject to one of the seven percent value-added tax rates in Singapore. Themis Partner can also help you with professional accounting services in Singapore.
Singapore has no restrictions on foreigners owning a company, but there is a requirement for local resident directors. If you are permanent resident in Singapore, you can be the sole director and shareholder of your Singapore company, otherwise you will need to appoint a resident director. In addition, foreign entities can effectively manage their Singapore offshore limited liability company from overseas.
The Singapore government has implemented pro-growth and pro-innovation policies by exempting new businesses with revenues beyond a particular threshold from paying taxes.
New firms in Singapore have been granted tax exemption under the “Tax Exemption Scheme for New Startup Companies” Act, which was passed in 2005. For the first three years after the establishment of their structure, eligible enterprises will receive the following tax exemption:
|➤ A tax exemption of 75% on the first $100,000 of taxable income|
|➤ A tax exemption of 50% on the second $100,000 of taxable income|
Singapore has signed DTAs with over 50 countries to prevent double taxation. The goal of these agreements is to avoid double taxation for both businesses and people.
In the absence of a double taxation agreement, Singapore provides unilateral tax credits (UTC) to foreign countries. A firm or individual in Singapore can avoid double taxation by signing one of these treaties.
Under the Business Registration Act, you must register your business with ACRA. You must select a business name and file an Application for Approval of a Business Name as well as an Application to Register a Business Firm. A SG$65.00 company registration fee is required. Upon company registration, you will receive an email notification that is valid for one year and can be renewed annually for SG$20.00.
We assist both established international enterprises and sponsored startups in registering their businesses in Singapore in a timely and efficient manner. We can help you with Singapore company registration in less than a week, and we can assist you migrate your workforce to the country in less than three months.
Choose a suitable Singapore business structure (either on your own or with our assistance) as well as any additional services you require, such as bookkeeping, tax compliance, or a company secretary. Following that, we’ll give you an electronic questionnaire to gather vital information about your future firm, such as shareholder and director information, projected business activity, and so on, as well as request copies of some documents.
ACRA must authorize your business name. If you choose your company name based on ACRA’s advice, you’ll have a better chance of getting it approved quickly. From the date of your application, approved company names will be stored and secured for 60 days.
Certain names, such as references to government agencies and professional organizations, will need to be justified. If a name is the same (or extremely similar) to that of an existing company, it cannot be registered until an ACRA appeal is successful.
The documents of incorporation, including the company registration, will be prepared by us. We will finish the company registration with ACRA once you have signed online.
If all of the following documents are ready and correctly signed, you can get ACRA approval in one day after gaining name approval:
|➤ A brief description of the company's activities|
|➤ Information about the company's Singapore registered address|
|➤ Information about the shareholders|
|➤ Information about the directors|
|➤ Information about the company secretary|
|➤ Foreigners must submit a copy of their passport and proof of their foreign residential address|
|➤ Singapore residents must submit a copy of their Singapore identity card|
We’ll get a certificate of incorporation, a common seal, and a rubber stamp when we’ve registered with ACRA, set up statutory registers, and draft resolutions for the first Board of Directors meeting.
Your newly formed company will now require the opening of a bank account. We have strong relationships with a number of local and international banks, and we can set up meetings and provide all necessary paperwork for you. Alternatively, we can just supply you with the resolution to start your own bank account.
If you intend to operate your business from Singapore, we can assist you with obtaining an employment pass, which allows international professionals, managers, and executives to work in the country.
Several documentation certifying your company’s incorporation will be issued: A Certificate of Incorporation will be issued by ACRA. It will be forwarded to you through email and will include your Singapore company registration number. You can order a physical copy of this certificate for S$50 by submitting an online request to ACRA. ACRA will also give a free Company Profile (“Bizfile”), which serves as the company’s identity card.
You’ll also get the Singapore Standard Industrial Classification (SSIC), which is a number used to categorize a company’s operations. The Singapore government uses SSIC codes for statistics purposes as well as to make regulation and corporate governance easier.
They may be used by ACRA to determine whether additional licenses are required, and by IRAS to establish whether the company qualifies for specific tax incentives. You have the option of selecting a primary activity code and a secondary optional activity code.
Choose an SSIC code that reflects your company’s core activities and be aware that you may need to apply for a license. Examine the tax deductions connected with each code in detail. The Singapore tax authorities levy a high tax rate on some holding businesses.
We offer a comprehensive range of business formation and compliance services, including Singapore company registration, document filing with the required authorities, registered office space, and post-registration compliance. If necessary, we can additionally offer resident directors and shareholders. They will be backed up by legal documentation to ensure that you own and control your business.
1. Registration of a business: We’ll compile all of the essential paperworkfor your Singapore company registration with the ACRA.
2. Secretary to the company: We’ll take care of all of your unfinished business tasks, such as maintaining statutory books and records, recurring files, and secretarial guidance.
3. Registered address: From the day of company registration registration, you must have a registered office in Singapore. In addition, we offer a postal address as well as mail forwarding services.
4. Director service: In Singapore, private limited corporations must have at least one local resident director. If you are unable to achieve this criteria, we can function as your resident director.
5. Local Agent: For foreign corporations interested in establishing a branch office in Singapore, we can act as local agents.
Choosing the appropriate company structure is one of the most important considerations an entrepreneur must make when starting a business in Singapore. Sole proprietorship, general partnership, limited liability partnership (LLP), and limited liability corporation are the five choices (Pte Ltd). Even so, because it is the most advanced and flexible business entity, the last option remains the most common.
When starting a business in Singapore, most, if not all, overseas entrepreneurs choose a Private Limited Company as their legal structure. This structure protects personal assets from business risks and responsibilities by treating it as a separate legal entity from its owners. A limited corporation is a taxable entity, which implies that aside for the amount of share capital, shareholders are not accountable for any obligations or losses. Themis Partner presently only works with Pte Ltd businesses.
|Liability is limited||Regulations that are quite strict||Tax advantages||Liquidation is difficult||Ease of ownership and transfer of shares||Accounting and auditing regulations that are difficult to meet||Investors are drawn to it||The expense of doing business is higher|
If you’re a Singaporean, a single proprietorship is the most straightforward way to conduct business. Foreigners are not permitted to operate sole proprietorships to register a company in Singapore. It’s important to highlight that it’s not a separate legal entity, thus the business owner is responsible for all liabilities that arise during the course of the operation.
|It is the simplest and cheapest business structure to establish.||There is no distinct legal entity||Compliance requirements are kept to a minimum||Liability is limitless||There are no profit-sharing arrangements (you have no shareholders)||Do not qualify for tax breaks||Your sole proprietorship can be readily ended||Capital constraints|
The liability of limited partners is limited to the amount of contributions made to the partnership, and they do not actively participate in the management of the company.
The foreign business owns, controls, and is responsible for the Singapore company through a branch office. The branch office must provide and create activities that are similar to those provided by the main office.
The representative office in Singapore is a short-term (one to three years) entity with limited powers and no legal standing. The representative office’s main purpose is to investigate and study the Singapore and Southeast Asian markets in order to determine the potential of establishing a permanent corporate organization.
Non-Profit Organizations (NPOs) are also known as Voluntary Welfare Organizations in Singapore and can be registered as a public corporation limited by guarantee, society, or charity trust under Singapore legislation.
The Variable Capital Company (VCC) is a new legal organization form in Singapore that caters to all types of investment funds.
To register a business in Singapore, you must spend SG$315 in government costs for name verification and application. Singaporeans can apply on their own behalf, whereas foreigners should employ a certified agency to do so for them.
A Corporate Secretary who reports to the government is required for both foreigners and locals. There is a legal requirement for foreigners to engage local directors and have a registered Singapore address. Foreigners who wish to relocate to Singapore must obtain a visa that allows them to work and stay in the country.
The relatively advantageous tax environment is another inducement for investors and businesses to locate in Singapore. Low corporate and personal tax rates, significant tax relief measures, the absence of capital gains tax, the one-tier tax system, and broad double tax treaties with more than 50 nations will all benefit you as an entrepreneur.
It’s one thing to decide before Singapore company registration; the next step is to figure out what kind of business you want to start. When you register your business with the Accounting and Corporate Regulatory Authority, you may need to obtain a license or permission, depending on the industry and type of operation (ACRA). The application process and license criteria differ depending on your industry. Your company must first be registered with the registrar of businesses before applying for a license.
If you don’t accomplish this, you won’t be able to get a license. A license can be applied for by either organizations or individuals. Foreigners must obtain a work permit before applying for a business license, as a local SingPass login is frequently necessary. Because the relevant government agencies must pay special attention to enterprises in certain industries, licenses are required for commercial operations that are regulated in Singapore. Singapore has set up a user-friendly company license online, which is wonderful news. Once your firm is set up and you’ve obtained your Unique Entity Number, you’ll be able to apply for the necessary permits (UEN).
Singapore’s e-commerce business is expanding, with revenue predicted to rise at a 9.9 percent annual rate between 2021 and 2025. With over 3.3 million individuals purchasing online, there is plenty of possibility for growth.
Physical storefronts are disappearing as Singaporeans increasingly purchase online. 3.12 million Singaporeans purchase online out of a total population of 5.6 million. By 2021, the number of users is predicted to reach 4.11 million.
To address the demands of the local community, EdTech is a rapidly rising business. Singapore households spent a total of S$1.4 billion in 2018 on enrichment lessons to assist their children achieve a competitive advantage. A child’s university education costs an average of S$21,000 each year.
Singapore’s diversified food is constantly popular. Singapore had over 4.6 thousand restaurants and cafés open in 2018. In August 2020, the total sales value of food and beverage services was anticipated to reach $665 million.
In 2018, Singapore received 19.11 million tourists, more than three times its population. Tourists visiting Singapore in 2019 spent 27.7 billion Singapore dollars (US$20.4 billion) in receipts as they sought for unique experiences on the island country.
As Singapore develops into a technological hub, technology businesses with their own applications are utilizing it as a launchpad for the Asian area. Facebook is establishing its first Asian data center, which will cost S$1.38 billion (US$1 billion).
Singapore’s construction sector is expected to generate up to $35 billion in revenue by 2023. This leads into a plethora of possibilities and initiatives for enterprises in this industry, which accounts for around 4% of Singapore’s overall GDP in 2019.
Singapore is seeing an increase in the number of companies offering innovative financial technology in order to maintain its position as a key international financial hub. In 2018, nearly 500 fintech firms received over S$500 million in financing.
Singapore is well-known for its excellent medical profession. Tourists in the region seek medical care in Singapore as well. New entrants may get a piece of a market that is anticipated to be worth $44 billion by 2030.
Singapore boasts a robust IP protection environment, simple company setup, and high quality human resources, making it an excellent location for printing enterprises. With one of the world’s highest literacy rates, there is a constant need for high-quality products from publishing firms.
Property firms are the most successful in Singapore. Real estate firms that sell commercial, industrial, retail, hotel, and service apartment assets are among Singapore’s top 20 listed corporations.
Human resource services are in high demand in Singapore as more multinational corporations located here outsource their staffing operations in pursuit of the best personnel, either locally or from outside.
In Singapore, there are over 5000 marine organizations and enterprises. Because of the country’s pro-business policies supported by the government, the country is a vital center for maritime commerce and a leader in international maritime center, making it a perfect site to create your firm.
Singapore’s corporation taxes is based on a territorial system, which means that tax is levied on income earned or generated in Singapore, as well as any foreign-sourced revenue sent to a Singapore bank account. The headline corporation tax rate of 17 percent, based on the company’s chargeable income, is one of the lowest in the world. A partial or total exemption of the first SG$300,000 in taxable income is available to many enterprises in Singapore.
To support and foster entrepreneurship, the Singapore government has introduced tax exemption incentives for new start-up enterprises. During the first three years of their Year of Assessment (YA) after incorporation, start-up enterprises are entitled for the start-up tax exemption.
Your business must meet many conditions to be eligible for the Start-up Tax Exemption Scheme:
1. The business must be a Singapore registered company.
2. For that YA, the company must be a Singapore tax resident.
3. During the base period for that YA, there must not be more than 20 individual shareholders,
– All of the shareholders are individuals.
– At least one shareholder is an individual shareholder holding at least 10% of the issued ordinary shares.
|Chargeable Income||% Exempted from Tax||Amount Exempted from Tax|
For enterprises that do not qualify for startup exemptions or have been in business for more than three years, partial tax exemptions are available.
|Chargeable Income||% Exempted from Tax||Amount Exempted from Tax|
The Products and Services Tax (GST) is a broad-based consumption tax applied on goods imported into Singapore (collected by Singapore Customs) and practically all goods and services supplied in Singapore. GST is also known as Value-Added Tax (VAT) in other nations. Singapore’s GST rate is currently set at 7%. When the value of your supplies exceeds or is likely to surpass S$ 1 million, you must register for GST as a business. You will be expected to complete quarterly returns based on a calendar year once you have registered.
Tax may be withheld in a variety of situations, including payments made to non-resident firms or persons for services delivered in Singapore, where income is earned. You must withhold a portion of the money and make it payable to IRAS instead. Withholding tax on funds transferred outside of Singapore typically varies from 10% to 15%. All shareholders in a Singapore firm are entitled to dividends based on the company’s profits. If the funds remain in Singapore, dividends are tax-free. When dividends are transferred from Singapore to overseas citizens, they are taxed in their home country. The percentage of tax you must pay is determined by the country in which you reside and where you have voting power.
Personal tax rates begin at 0% and are capped at 22% for residents. Taxes are deducted from your net salary in Singapore. Net income is the amount of money you make after subtracting adjustments, deductions, and credits from your gross income. This ranges from 15 to 22 percent for non-residents. As a non-resident, director’s fees and other income received in or derived from Singapore, such as rent, will be taxed at the current rate of 22%. If you are physically present in Singapore for at least 183 days every calendar year, you are considered a resident. Depending on the “nature” of your stay overseas, the tax authorities may consider you a resident for tax purposes in Singapore if you remain less than 183 days in a calendar year. Singapore-based corporations can pay out one-tier tax-free dividends. This implies that you will not be taxed on your dividend income as a shareholder. Dividends obtained from co-operative shares, on the other hand, are taxed.
A reduced version of international standards exists to lighten and simplify the administrative work of SMEs. Singapore has established its own financial reporting standard for small enterprises to assist them in growing. A firm must be modest to qualify as a SME, with total gross assets of less than S$10 million and fewer than 50 workers. These businesses are not obligated to furnish financial statements to outside parties.
Each Singapore business is required to have an AGM once each calendar year, within 15 months of the preceding AGM and six months after the fiscal year end (FYE) date. The AGM can be held anywhere in the globe, however the location of the AGM can be used to establish a company’s tax residence.
All companies in Singapore should determine a financial year-end after the incorporation. It corresponds to the end of a fiscal year. Many companies choose December 31st for their FYE but it may actually fall on any day within the year. New companies can strategically pick their first FYE to maximise eligible tax exemptions.
Following Singapore company registration, the next step will most likely be to create a company bank account. We highly advise you to open a company account rather than utilizing your personal account and credit cards. A business account is required not just for security, but also for simpler and faster access to and control of your assets, balances, and deposits. Combining the two money pools will complicate taxation and audits in the future. Local banks in Singapore normally need a face-to-face visit, but setting a virtual deposit account may be done totally online.
Due to COVID-19 travel limitations, Singapore banks like OCBC and UOB, as well as fintech firms like WorldFirst and Wise, may now assist our customers in opening corporate bank accounts remotely. Each bank has its own set of account opening procedures and costs.
When creating an account, most banks demand at least two signatures. To create a corporate bank account in Singapore for your firm, you must prepare the following papers for the bank meeting:
|➤ A completed Corporate Account Opening Form that has been officially signed by authorized signatories from your firm or startup.|
|A Directors' Resolution will be required to demonstrate that the firm was given permission to create a bank account. Most banks have a paperwork ready for this, so all you need are signatures from your board.||The Company Registrar's Certified True Copy of your Company's Business Profile (note that only a member of the board or the company secretary like Themis Partner can certify this document).||Certified True Copy of Passport/Singapore IC and Proof of Residence of Directors, Signatories, and Ultimate Beneficial Owner.|
When transferring money internationally, it is essential to research multiple money transfer companies and banks in order to convert your currency into Singapore Dollars at the best available rate and with the lowest possible costs. Wise and WorldFirst, for example, provide very competitive exchange rates.