5 mins | September 29th, 2021 | No, Singaporean owned businesses do not have to abide by business laws of Singapore after expanding abroad. This is under the assumption that a separate legal entity has been formed abroad.
There are many ways of expanding business abroad. You may set up a new company there, in which you can decide between a branch, subsidiary, related company etc.; or you may use your existing Singapore incorporated company to conduct business abroad through a representative office, or as a foreign company there.
Adherence to Singapore Business Laws After Expansion Abroad
Here are rule of thumbs:
- Your company adheres to Company Laws wherever it is incorporated
- In operation and doing business, your company adheres to the business laws in that jurisdiction
- You adhere to local taxation laws in all jurisdictions you operate in.
For example, a Singapore Pte Ltd company expands abroad by setting up a Malaysia Sdn Bhd:
- Singapore Pte Ltd company must comply with Singapore company and business laws. E.g. compliance to Accounting and Corporate Regulatory Authority (ACRA) Annual General Meeting and Annual Returns requirements.
- Malaysia Sdn Bhd must comply with Malaysia company and business laws. E.g. Compliance to Suruhanjaya Syarikat Malaysia (SSM) Annual Returns requirements.
Another example, a Singapore Pte Ltd company expands abroad by doing business in Malaysia without setting up an official company or separate legal entity:
- Singapore Pte Ltd company must comply with Singapore company and business laws. E.g. compliance to Accounting and Corporate Regulatory Authority (ACRA) Annual General Meeting and Annual Returns requirements.
- The company must also adhere to Malaysia business laws like proper licensing and understand if there are any withholding tax or double tax implications.
Important Business Laws of Singapore
1. Competition Law
The business laws of Singapore are of utmost importance for all who plan to start a business in the country. One of the most important business laws which exists in Singapore is the Competition Law which bans businesses from participating in activities deemed to be anti-competitive through information specified in Sections 34, 47, and 54. This law has been in place since 2007. It is enforced and administered by the Competition Commission of Singapore (CCS). CCS also has the right to assess instances in which the Competition Law may have been violated as well as punish any business or business owner proven to be in violation of this law.
2. Employment Act
Another important law to be followed by all businesses based in Singapore is the Employment Act of 1968. This law is the primary piece of labor legislation existing in Singapore today. It was created in order to raise the standards of employment practices in Singapore as well as to improve the working conditions experienced by employees in the country. Most, but not all, workers who are based in Singapore are protected by the Employment Act. Those to whom the Employment Act does not apply must determine the rights to which they are entitled by engaging in a discussion with their respective employers.
3. Electronic Transactions Act
All electronic transactions performed by businesses based in Singapore are governed by the Electronic Transactions Act. The Electronic Transactions Act came into force in 1998 and was amended in 2010. Apart from electronic transactions, it also governs various other digital services in Singapore. Such digital services include electronic contracts, electronic signatures, e-commerce, and maintenance of electronic records. The Electronic Transactions Act ensures that when a business is involved with any of the preceding activities, those activities are conducted in a way which is proper and legal.
FAQs
S$5,755, the breakdown is illustrated as below:
PACKAGE FOR FOREIGN ENTREPRENEURS OPERATING OVERSEAS | |
COMPANY INCORPORATION WITH 1 YEAR NOMINEE DIRECTOR |
|
Company Registration | S$800 |
Acra Registration Fee | S$315 |
Appointment of Company Secretary (for 1 year) | S$600 |
Nominee Director (for 12 months) | S$3,800 onwards |
Registered Office Address (for 1 year) | S$240 |
TOTAL | S$5,755 |
Singapore’s corporate tax rate has fallen dramatically over the past two decades. After peaking at 26%, the Singaporean government enacted many reductions to the corporate tax rate in the ensuing years. Today, Singapore’s corporate tax rates stands at just 17%.
Due to the unique characteristics of sole proprietorships and partnerships, IRAS does not consider them to be companies. Therefore, they are ineligible to receive any tax exemptions.
Ordinary business partnerships, limited partnerships, and limited liability partnerships differ in fundamental ways. The methods in which they are to be run contain significant differences. Therefore, these partnerships have to be classified separately.
Once re-domiciliation is completed in Singapore, it can no longer be undone. The Companies Act does not provide for re-domiciliation back to the original place of incorporation.
No, you can use a different name for your subsidiary company.
Many companies in Singapore require additional business licenses before they may begin business operations. However, this is not necessarily true of every company in Singapore. This is because the licenses required, if any, differ from industry to industry.
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