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Guide to Offshore Company Incorporation

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Guide to Offshore Company Incorporation

2021-02-05T18:24:27+08:00October 1, 2020|0 Comments

There are several requirements to be fulfilled by each company wishing to be a corporation away from its jurisdiction. The same goes for any company wishing to be incorporated as an offshore in Singapore.

Articles of incorporation are drafted as one of the steps, and it lists the company’s core reason, the number of shares, class of stock that will be issued, and the company’s location.

Singapore has established itself as a renowned financial hub placing itself at the top as one of the most likely places to offshore a company. Its financial center provides a variety of financial services like banking, insurance, and treasury services. It is also one of the lowest tax havens in the world. It imposes a 10% -15% withholding tax on interests and royalties to non-residents but none on dividends. These benefits are attracting many potential investors.

Singapore’s company registration is a two-step computerized process. Once the company name is approved, the next step is submitting documents of incorporation. It is fast and efficient, and it does not have any bureaucratic red-tape.

Merits of Forming an Offshore Incorporation

There are always various benefits to engaging in international trade and activities. However, some of these may depend on specific jurisdiction. The following applies to Singapore as a country:

  • Friendly corporate regulations: Some measures have been put in place that encourages foreign investment and the growth of offshore corporations.
  • Ease of incorporation: It takes 1-2 days to complete the process of registration and incorporation as long as all the required information and documents are provided in time to the company incorporation authorities.
  • No constraints on foraging exchange: There are minimal to zero foreign exchange restrictions on offshore corporations.
  • Flexibility in the structuring of capital: There are minimum requirements for paid-up capital, hence flexibility in the way you structure your capital.
  • Ease of relocation: One can come in as an Entrepreneur Pass or Employment Pass.
  • Minimal reporting requirements: There is zero to minimal reporting of financial and accounting information.
  • Flexible management: One can have as low as one director in an incorporated company, depending on its size.
  • High confidentiality: Personal details, financial, and account information of corporate owners is confidential to a varying degree. However, law enforcement authorities usually have access to this information. There is also minimal information available to the local public.

Deciding Where to Incorporate Your Offshore Company

In deciding where to offshore your business, you should have in mind that you may not find all the favorable benefits in one place, but you can choose, out of the available options, one that best suits your goals for offshore company formation.

Your offshore jurisdiction choice will depend on your business type, your banking needs, and ease of relocation depending on your residency situation.

Your primary motivation will help ease your decision-making process. Your motivation can focus on asset protection, a hybrid corporate model, ease of administration, available man-power, resource availability, financial services, or maximum transparency. For example, if you are continent-specific, you will have to decide between Singapore and Hong Kong.

Politics and political stability also features in the decision-making process. Maybe it is your home country politics or offshore jurisdiction’s political stability. You may not want to overlook this point because, despite availably of all other favorable benefits like resources, it can all be wiped out in one day or period of political change.

One should also check on statutory compliance requirements, double taxation, banking facilities, and available professional services.

Incorporate Singapore Offshore Company

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Guide to Forming an Incorporation

It is usually easier to form an offshore company than an onshore company because of fewer restrictions and requirements. The developed travel and ease of communication process brought about by online presence that has opened the world as one country also contributes to ease the process.

There should be at least one shareholder depending on the size of the company or manner of trading. A publicly-traded company will have several shareholders, while a small corporation can have just one shareholder.

Decide on the company type that you want to involve yourself in. Then do research on different jurisdictions and selected the best option that will work for your company; for example, in terms of taxes, regulations, and profit, you then have to ensure you follow the guidelines below in order for your company to be incorporated:

  1. Give your company an appropriate name. The company name is subject to approval by the Company Registrar as a prerequisite before incorporation.
  2. Appoint at least one director of local residency or Singapore permit holder of 18 years and above.
  3. Have at least one shareholder, local or foreign. The shareholder and director can be one and the same person.
  4. Appoint a natural person as a company secretary but not a corporate body. The shareholder/director cannot double up as a secretary; they must be two different persons.
  5. Have a minimum paid-up capital of $1.
  6. Have a commercial or residential registered address. It cannot be a post office box number.
  7. Appoint an incorporation agent. Foreign entities or individuals are not allowed to register an offshore company by themselves. They do so via professional firms.
  8. Find information regarding your type of company and the required document and procedures for the company formation.
  9. Attach all the required documents. These are copies of passports for yourself, the proposed director and shareholder; residential address; and parent company details if you are corporate.
  10. The agent then registers your company with the Singapore company registrar.
  11. The agent then helps prepare your company incorporation kit with items such as a certificate of incorporation, rubber stamp, company seal, and company profile.
Incorporate Singapore Offshore Company

Additional follow-up requirements:

  • Your company may have to follow up with ongoing compliance requirements if you decide to register for the tax that applies to goods and services.
  • After your company incorporation, you may also need to obtain a business license or permit if you intend to operate in Singapore, before undertaking any business activities.
  • Check to see if you qualify for audit exemptions. If not, ensure that you have appointed an auditor within the first 3 months from the date of incorporation.
  • Have a physically accessible digital or hardcopy register of controllers of your company: shareholders, directors, secretary, etc. besides, have a public register of members.
  • You are required to publicize your Unique Entity Number/ Company Registration Number on all your official correspondences.
  • Finally, file returns and taxes annually.

Thinking of incorporating in Singapore? Let’s get started.

E A S I E R • F A S T E R • B E T T E R

Choosing a Qualified Offshore Team

Look at the team’s characteristics that are beneficial to your company. Some of these are:

  • Communication skills: They should be able to understand your instructions and project requirements. And they should also be able to communicate their advice simply and understandably.
  • Expertise: An offshore team should be able to exhibit the level of qualified expertise that is required by and suits your intended corporation endeavors. You can ask for projects they have accomplished in the past for other clients. They should be able to undertake the projects you give them to a satisfactory completion.
  • Flexibility: Check to see how ready they to adjust to unplanned changes in your project requirements.
  • Trustworthy: Choose a team that will not share your project and project proposals with other clients. A team that will ensure your data is secure.
  • Reliability: Choose a team that is committed to seeing your project succeed and meet its time frame.

Summary

Several countries can offshore their businesses and offer different benefits and trade-off possibilities. The choice of an offshore jurisdiction is not always easy. The good news is that there are professionals such as the Offshore and Technical team and qualified agents who are always ready to assist. In addition, Singapore has ready information to share with prospective investors because of the foreign exchange it looks forward to earning from such investments.

Guide to Offshore company incorporation FAQs

Who are the register of controllers?2020-10-01T16:04:40+08:00

These are persons who make major decisions in 25% or more of capital, shares, voting, and/or profits.  

What is Goods and Service Tax?2020-10-01T16:04:16+08:00

It is a tax on goods and services. It is the same as Sales Tax or Value Added Tax in most countries. 

What businesses can be offshored?2020-10-01T16:03:36+08:00
  • In order to benefit more from an offshore company, you should know which business to engage in. the following are some examples:
  • Electronic commerce (E-Commerce)
  • Stock exchange and forex bureaus
  • Consultancies,
  • Foreign domestic agencies
  • Banking services,
  • Real estate
  • Intellectual property ownership and other related businesses.
  • Internet-based services
What is the difference between registered and bearer shares?2020-10-01T16:03:06+08:00

In the registered shares a name appears on the certificate of shares and in the automatically stored share register in registered shares.  

Whereas in the bearer shares there is no name on the certificate, but it appears on the share register for privacy issues. 

What is an order form?2020-10-01T16:01:25+08:00

An order form is an internal document usually provided by your professional services team to collect information on shareholders, directors, type of shares, banking officers, and secretary if they will be required. 

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