Singapore is A Prime Destination for Company Relocation
Many countries around the world pride themselves on being business-friendly and open to foreign companies. However, one country stands out among all.
According to the World Bank’s Ease of Doing Business Index, only one country has been ranked as the world’s easiest or second-easiest country to conduct business in since the index was created in 2006 is Singapore.
A study by Towers Watson Asia in 2016 found that out of 319 Fortune Global 500 companies, a remarkable 41% of them have their Asia-Pacific headquarters in Singapore.
After taking a closer look at Singapore’s business environment and laws, it should come as little surprise that this tiny Southeast Asian country has established itself as a corporate powerhouse and a leading destination to which foreign companies often relocate.
Why Choose Singapore for Your Business Relocation?
One of the main benefits of relocating a foreign company to Singapore is Singapore’s simple, investor-friendly tax system. Singapore does not impose any taxes on capital gains and dividend income. Furthermore, Singapore’s highest possible corporate tax rate on taxable income is 17%, a figure far lower than those of other countries in the Asia-Pacific region.
For example, the highest possible corporate tax rate in Japan is 30.86%; New Zealand, 28%; China, 25%; and Australia, 30%. If the company’s corporate profits do not exceed S$300,000, then the tax rate falls to a paltry 8.5%. All foreign-sourced income is also exempt from taxation as long as the income has been taxed in a country which has a minimum headline tax rate of 15%. Finally, Singapore’s regulatory framework grants foreign investors the same opportunities afforded to local ones. This is due to the lack of foreign exchange controls and foreign ownership restrictions.
Immigration Policies in Singapore
Singapore also provides many different visa schemes for entrepreneurs and working professionals. Among these are the Employment Pass Scheme, the Entrepreneur Pass Scheme, the Personalised Employment Pass Scheme, the S Pass Scheme, and the Miscellaneous Work Pass Scheme. These schemes were initiated by the Singaporean government to attract foreign investment and surround the local workforce with some of the best talent from abroad.
When combined with Singapore’s open immigration policies, these visa schemes make Singapore an even more attractive location to which foreign businesses could relocate.
Transparency in Conducting Business
Singapore’s political stability and relative lack of corruption also contribute to its business-friendly atmosphere. The Corruption Perceptions Index, published by Transparency International, ranks Singapore as the sixth-least corrupt country in the world. The Global Economy, a website that serves researchers, academics, investors, and business people who need reliable economic data on foreign countries, ranks Singapore’s political ranking as the world’s third-most politically stable country, only trailing Monaco and New Zealand. This allows companies in Singapore to conduct business in a safe and transparent environment, thus adding another compelling reason for foreign companies to relocate there.
Singapore’s government policies in regard to business are also transparent. Therefore, those who relocate their businesses there will be assured of a stable environment in which they will work.
Foreign companies intending to enter Singapore may do so by utilizing one of several options.
Most small to mid-sized foreign businesses will attempt to enter Singapore using a subsidiary company. This is because Singapore allows locally-incorporated companies to be completely foreign-owned. The structure of a subsidiary company offers protection against liabilities and is relatively tax-efficient.
A foreign company may also opt to commence business operations in Singapore after setting up a branch office. In Singapore, branch offices are regarded as extensions of foreign companies despite being registered legal entities. Therefore, a branch office’s liabilities extend to the foreign company and its income is ineligible for tax exemptions and incentives. This may be a reason why this option is less commonly chosen than that of using a subsidiary company.
Before a foreign company commits to any large-scale investments or business venture in Singapore, it may choose to set up a representative office if it is interested in learning more about the Singaporean market. Representative offices may conduct studies and market research but may not carry out business activities or trade. This is due to the fact that representative offices are temporary setups that do not have any legal persona.
However, the cost of registering a representative office is much lower than that of registering a subsidiary company or branch office.
In 2017, the Singaporean government introduced an inward re-domiciliation regime as an amendment to the Singapore Companies Act. This regime is open to those who wish to relocate their businesses to Singapore, but do not wish to create a subsidiary company or branch office. Foreign companies relocating to Singapore under this regime must comply with a minimum of two of the following requirements:
1) The turnover for each financial year must not exceed S$10 million.
2) The total value of all assets held by the company at the close of each financial year must not exceed S$10 million.
3) The company must have 50 or fewer employees at the close of each financial year.
Requirements for Singapore Company Incorporation
There are also several other requirements imposed on companies relocating to Singapore.
For example, laws in the foreign company’s home country must be able to provide for the re-domiciliation of businesses. The company must also file several documents.
One document must be a proof of the company’s financial soundness. The other documents must include a genuine copy of the company’s incorporation documents, registration papers through which the company seeks re-domiciliation, and a receipt proving the company’s payment of a registration fee. Within 60 days of relocation, the company is required to file evidence of de-registration issued by its home country’s Companies Register with the Accounting and Corporate Regulatory Authority. This then completes the transfer of operations, allowing the company to conduct business in Singapore.
Evidently, Singapore is a country whose stock in the corporate world continues to rise. Its vibrant business culture, laws conducive to business activity, and transparent and stable environment contribute to this reputation.
Considering everything that has been mentioned, when choosing to relocate a business to another country, Singapore should always be an option.
Paul Hype Page & Co – Acra service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
We will call you back, please click below link and make appointment with our Sales consultant:
Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Singapore Tax Planning
Step 3- Recommend the most suited type of Company Incorporation , Open Bank account and
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly Acra Financial and Tax Compliance
Step 7- Assist you to expand business to Malaysia, Indonesia , Vietnam and Thailand.
Get in Touch with Us Today.
Paul Hype Page
Categories: Business Opportunities in Singapore