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To encourage foreign capital inflows, Singapore provides a comprehensive program of incentives based primarily on consideration such as total investment involved, technical input, export potential, employment opportunities, and general cohesiveness to the development of the industrial and financial activity.

Shipping and Maritime Sector

  • International Shipping Operation
  • Maritime Finance Incentive
  • Shipping Profits
  • Approved International Shipping Enterprise (AIS)

Services that Paul Hype Page provides:

  1. Tax planning
  2. Incorporation
  3. Company Secretarial Services
  4. Special License Application
  5. Accounting
  6. Yearly Tax Computation

Singapore is a superior maritime nation. The tax incentives, technical support, social organization, and ease of ship registry attract new merchants to its ports each year. Paul Hype Page Management Services help shipping companies that wish to take advantage of the tax benefits of incorporating under the Singapore flag. If your company is in the maritime industry, read further to better understand Singaporean tax incentives, shipping grants, green initiatives, and registration fees.

Maritime Sector Incentive and the Approved International Shipping Enterprise Scheme

Singapore offers a special tax regime. Under the Maritime Sector Incentive and the Approved International Shipping Enterprise Scheme, Singapore registered companies are granted a profit tax exemption for 10 years. To qualify, a shipping company must be a significant owner and operator of ships, must have a minimum annual business spending, and must be a Singapore resident. A vessel must hold a permanent certificate of registry, however, dredgers, floating production storage, loading vessels, oilrigs, submersibles, seismic vessels, and other offshore mobile units may qualify. The MSI and AIS incentives are guaranteed until 2037.

Concessionary tax and income tax on international freight

In Singapore, taxes are predictable, because rates increase incrementally and are based on income. Concessionary tax and income tax on international freight are as low as 10%. Also, Singapore shipping companies pay less to buy, sell, construct, finance, and register their fleet. Proceeds from the sale of Singaporean ships are exempt from tax. Loan payments made to finance ship construction are often exempt from withholding tax. Vessel fund management, in the form of a shipping fund, trust, partnership, or leasing company, is taxed at 10%.

Ship registration fee

Ship registration in Singapore is easy and can be accomplished in hours. The fee structure is equally simple; owners pay $2.50 per ton to register their vessels. The minimum fee is $1,250, and the maximum fee is $50K. A discounted scheme is offered to companies that own: 2 ships over 40,000 tons, 3 ships over 30,000 tons, 4 ships over 20,000 tons, or 5 ships of any tonnage. Qualifying companies pay $0.50 per ton, not exceeding $20K. The annual tonnage fee is $0.20 per ton, with a minimum fee of $100, and a maximum fee of $10K.

Grants for professional development and research

In addition to tax and registration savings, Singapore offers grants to companies that invest in professional development and research. Singapore has created a Maritime Cluster Fund of $45 million to support new business, and $50 million to develop workforce expertise. The Maritime Innovation and Technology Fund grant money to companies that research and develop new commercial products. Airfare, salary, and living expenses may also be subsidized through manpower development grants. Training programs may be subsidized up to 60%, not exceeding $50K per employee.

Maritime Port Authority’s Green Initiatives

Aside from the attractive grants and tax incentives, Singapore is known for its efficiency, cleanliness, and safety. These values extend beyond the shoreline, through Maritime Port Authority’s Green Initiatives. Ships exceeding IMO’s Energy Efficient Design Index can expect a 50% reduction in initial registration fees and an annual rebate of 20% off tonnage tax. Companies investing in energy-efficient technologies may apply for grants, up to $2 million per project. Besides, vessels with abatement and scrubber technology, or those utilizing green fuels during their port stay, are granted a 15% concession in port dues.

Singapore is a major shipping center because of the simplicity of registration, the supporting infrastructure, and the competitive tax rates. At Paul Hype Page Management, we go beyond that of traditional tax services. Our experienced staff will identify which incentives and grants are right for your company. We offer consulting services that save our clients time and money. If you are interested in incorporating your shipping company in Singapore, consider Paul Hype Page Management Services. Together, we can make your business plan a reality.

Fund Management Sector

Fund Management Sector

E-commerce

Having a Singapore PE with offshore companies

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

Holding Company

Having a Singapore Holding Company for Business Expansion to Asia.

From start-ups, SMEs, to multi-national companies, Singapore offers a wealth of opportunities for commercialized business. Singapore is an ideal location to establish a holding company because of the low corporate tax rate, tax incentives, and network of tax treaties. As a Certified Public Accounting and Consulting Agency, Paul Hype Page can help your company grow and take advantage of the savings and double tax agreements available to Singaporean holding companies. Our team of experts will assist you at every stage of the transition, from company formation and incorporation to visas, compliance, and taxation.

One-tier corporate tax system

Singapore’s tax regime is arguably the most competitive in the world. The one-tier corporate tax system ensures all profits are taxed at a corporate level, with no withholding tax on dividends. If revenue is sourced from a foreign country, companies do not pay a capital gains tax. The corporate income tax is 17%, however, for small to midsized companies, it is as low as 4%. Under modest conditions, resident companies are exempt from tax on foreign-sourced income. We at Paul Hype Page Management will prepare and file all documents necessary to qualify for such tax incentives and others granted by the government or by the Singapore Income Tax Act.

Credible holding jurisdiction

Around the globe, Singapore has a reputation as a credible holding jurisdiction. Under 70 tax treaties, Singaporean holding companies experience lower withholding tax rates on income gained on dividends, interest, and international shipping. For this reason, many multinational companies select Singapore as their business headquarters. Additionally, businesses that derive profits from foreign markets, engage in e-commerce or operate in the United States, choose Singapore as their preferred location.

Aside from the low corporate income tax rate, available tax incentives, and established network of treaties, additional benefits exist for Singapore holding companies that establish themselves as a headquarters, a global trader, or a regional holding company. For example, a company headquarters offering services in intellectual property management, business planning and development, procurement and distribution, and research and development, may be remunerated for services provided within Singapore. Under the IHQ tax incentive, companies pay 0%, 5%, or 10% concessionary tax. For global traders, the concessionary tax rate is 5% to 10%. Regional holding companies generate investment income passively, by holding shares in foreign subsidiaries.

How cost-effective is a regional holding company in supply chain management? To answer this question, consider two scenarios. Business A establishes a holding company in the U.S. and derives $100 revenue, in India. Company A pays 30% withholding tax in India and an additional 5% in the U.S., under the 35% corporate tax rate. Business B establishes its holding company in Singapore and earns the same amount of revenue, $100, from business in India. Under the Singapore-India DTA, Company B pays 15% withholding tax. Company B then utilizes a foreign tax credit and pays an additional 7.5% in Singapore. In sum, Company A pays 35%, while Company B pays 22.5% of its revenue. Company B is at a greater advantage and can reinvest additional profits toward growth in foreign markets. Although a simplified example, the answer is clear, a multinational company will save money by establishing a holding company in Singapore.

Free Market

Singapore’s free-market approach is well respected for its transparency. If companies wish to qualify for the foregoing tax benefits, companies must provide proof of tax substance. The physical location of the business office and the location of assets, both tangible and intangible, are considered. Within each jurisdiction, the number of employees, business risks and decisions, and corporate functions are weighed. We at Paul Hype Page Management will analyze your business situation and work with you to develop a plan that works into your business goals and budget.

Paul Hype Page Management is different from other service providers. We not only incorporate, but we also help in running initial company operations. In addition to our year-round services, our firm offers a Corporate Management Package. During the initial 6 to 12 months of business in Singapore or Malaysia, we will assist you in all your business needs. Our goal is to make the transition both easy and prosperous for you and your company. Additionally, our services allow you to accurately estimate your initial investment cost and save on relocation costs, such as office renovation or recruitment. Whatever stage, structure, or location your business may be, partners at Paul Hype Page Management are well-positioned to grow your business by establishing a holding company in Singapore.

Tax Planning for Supply Chain Management

Effective supply chain management is key to developing a resilient, strong, and competitive manufacturing company. Singapore, with its double taxation network of treaties, offers a favorable tax regime for supply management. Manufacturing companies of all forms profit from incorporating in Singapore. To illustrate, consider tax planning for conventional, contract, and toll manufacturers. Singapore’s tax regime is structured so that manufacturing companies can keep a low operating margin, a high inventory turnover, and a consistent return on invested capital. At Paul Hype Page Management Services, we act as an accounting, incorporating, and consulting firm. We analyze data and advise our clients on how to shift business functions, assets, and risks between companies and locations.

Conventional manufacturers owning the fixed assets, the raw materials, the work in progress, and the finished goods associated with the production, prefer to incorporate in Singapore because of the low effective tax rate and tax incentives. When planning for taxes, corporations expect to pay no more than 17%. However, companies involved in the research and development of commercial products or the development of manpower may pay less. The favorable incentives preserve income, income that can then be reinvested and returned at a higher rate.

Aside from providing a favorable tax scheme, Singapore is a maritime nation and home to an international airport. Singapore has the infrastructure necessary to move products and increase inventory turnover. In Singapore, manufacturers enjoy easy access to Asian and Indian markets. A direct export is taxed at a zero rate, and indirect export is taxed at the general sales tax rate of 7%.

In a contract manufacturing agreement, both the agent and the principal experience a lower operating margin in Singapore. Supply goods are taxed at 0%, reducing the operating cost for manufacturing agents. As a result, principal companies enjoy a lower transfer price of goods. Under the Maritime Sector Incentive and the Approved International Shipping Enterprise Scheme, maritime shipping companies are exempt from profit tax. Savings in operating costs for shipping companies are transferred to the principal in a reduction of cost for the product shipment.

In many nations, companies engaged in toll manufacturing run the risk of double taxation. Double taxation occurs when a company establishes permanent residence in more than one country. In Singapore, a principal company is a permanent resident if it oversees manufacturing or otherwise creates a relationship in which the agent is dependent. In other countries, permanent residence is more strictly defined. In Singapore, laws are written to prevent double taxation. In addition, Singapore’s network of treaties offers further protection from double taxation.

Tax Incentives FAQs

What are the Tax Forms that Companies must submit annually?2021-02-09T11:27:53+08:00

The Tax Forms that companies must submit every year are:

  • Estimate Chargeable Income (ECI)
  • Corporate Income Tax Returns
How to claim for tax exemption?2021-02-09T11:26:50+08:00

You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS (Inland Revenue Authority of Singapore). Although you must state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.

Which countries have signed Avoidance of Double Taxation Agreements (DTAs) with Singapore?2021-02-09T11:28:19+08:00

Countries like the USA, Malaysia, India, Australia, China, Indonesia, and Japan have signed DTAs with Singapore. View the full list of the countries here.

2021-02-09T11:35:38+08:00December 24, 2014|0 Comments
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