Many people from all over the world choose to set up a company in Singapore. It is easy to see why – the country is one of the world's most business-friendly locations. For this reason, foreign entrepreneurs often see their company thrive after the company has been set up in Singapore.

 Singapore Incorporation

Singapore is one of the world’s most conducive locations for the conducting of business activities. It is an extremely favorable investment hub that encourages both local and foreign investments alike in the economy. Local companies are taxed at an extremely low tax rate; the corporate tax rate in Singapore is just 17% which is much lower than the corresponding rate in other countries. Despite this fact, foreigners who enter the Singaporean market might not find business success in Singapore to be as easy to come by as they might think. Nevertheless, there are many methods which an investor or entrepreneur could use to establish themselves within the Singaporean market. Singaporean company laws allow foreigners to set up any type of business entity as long as they follow due procedures and uphold existing laws and regulations. 

 

Reasons Why Foreigners Should Start a Business in Singapore 

At some point, all entrepreneurs from around the world should consider venturing into global business. This is because there are many opportunities to be found all over the world; those who let such opportunities pass them by may live to regret their decision. One of the locations in which many choose to pursue international business is Singapore. Singapore is certainly a viable investment destination for any foreigner who plans to start a business in another country. There are many reasons why an entrepreneur might choose Singapore as an investment destination. They will be detailed in the following paragraphs. 

 

Favorable Tax Rates 

As has been mentioned, Singapore’s tax rates are favorable towards all businesses in the country. The Singaporean government only imposes a 17% corporate tax rate on both foreign and local companies alike. Furthermore, certain companies such as start-ups are allowed to claim certain tax deductions from the government. These tax deductions serve as a way to encourage more people to start companies in Singapore and thereby drive the country’s economy. For this reason, foreigners who are planning on entering the Singaporean market will find that their tax burden is much lower in Singapore than in their home country. 

Even though corporate tax rates in Singapore are already low, there are nevertheless ways in which one could potentially further reduce tax expenses. For such issues, we at Paul Hype Page & Co can serve your needs. Our tax specialists will help you find ways to reduce your overall tax burden. We will enable you to understand all the intricate details of Singapore’s tax system in order to allow you to save much on your tax bill. 

 

Favorable Business Environment 

Foreigners who choose to conduct business operations in Singapore will find that the country has an excellent business environment. Singapore’s business environment is especially suitable for technologically-oriented products. Singapore currently ranks as one of the leading foreign investment destinations among the nations of the Asia-Pacific region. Singapore’s business scene is also varied; there are many fields of business which an entrepreneur could enter.

 

Business-Friendly Policies 

In certain countries, a foreign business entity may be required to join forces with a local entity while the amount of share capital involved is specifically rationed by the host government. In Singapore, such is not the case. One can independently set up a business without worrying about any restrictive policies that may be imposed on the business owner at the time of registration. The transparent and straightforward nature of business in Singapore environment allows one to freely take control of the company’s business policies. This high level of business freedom combines with the country’s business-friendly taxation system and simple incorporation process to do much to benefit entrepreneurs who plan to set up a company and conduct business operations in Singapore.

Want to Start business in Singapore
Want to Start business in Singapore

How to Set Up a Foreign Company in Singapore 

Setting Up a Representative Office 

In most cases, the first step of the process of setting up a foreign company in Singapore is that of setting up a representative office there. An authorized representative office will be able to assist business owners with market research, compliance, and pricing schemes as well as other factors which are critical to the success of a business in Singapore. The Singapore representative office will be staffed by representative personnel of the business owner’s choice. Business owners may either select personnel who are either part of a local representative office or appoint one from the parent company if there is one.

 

Choosing a Business Structure 

Foreigners entering Singapore for business purposes have three options from which they may use to establish a business in Singapore. They may set up a subsidiary company, set up a branch, or incorporate with a local company to facilitate theibusiness activities. 

 

Setting Up a Subsidiary  

Foreign business owners who already have a foreign parent company are allowed to proceed with setting up a subsidiary company which is independent of the parent branch. This subsidiary company is to be treated in the same way as a local private limited liability company in Singapore. Such subsidiary companies are taxed in the same way as any local company is.

 

Setting Up a Branch 

Foreign business owners who already own a parent company which is seeking to open a branch office in Singapore and have the branch office be dependent on the parent company could initiate the process by registering a branch. Those who choose this option will find that the parent company retains all liabilities and undertakings of the branch. At this point, the branch is not yet viewed as a separate legal entity from its parent. Nevertheless, the branch must still adhere to tax regulations as prescribed by Singaporean company laws for foreign companies. After setting up a branch, the owner might open subsidiary offices within Singapore for effective management.

 

Incorporating a Local Company 

In the absence of a parent company, an entrepreneur may proceed to incorporate a local company as long as it has limited liability. This means that the company will operate as a locally incorporated company and enjoy the same benefits that Singapore companies do.

There are other less common business entities in Singapore. However, although they are less common, that does not make them unviable. One can open a business entity of any type as long as the business entity is approved by Singaporean authorities. Other business entities in Singapore include sole proprietorshipspartnerships, and public or private limited companies.  

If you have any interest in starting a company of any sort in Singapore, let us at Paul Hype Page & Co be the first to assist you in your endeavor. Our company incorporation experts will work with you throughout the entire process of company incorporation. Once you have worked with us, you will find that the process has been greatly simplified through the use of our services. 

 

What Should Be Done After Starting a Singapore Company 

Although Singapore is one of the world’s best locations for business activities, running a foreign company in Singapore is not as simple as some might automatically assume. The business environment, requirements, licenses, and business regulations might overwhelm new business owners during the first months or even years of operations.

Therefore, foreigners who have just set up a business in Singapore are recommended to hire a consultancy firm which would help them manage issues during the initial stages of business operation. Once the business owner believes that a full adjustment to the Singaporean business environment, the owner will no longer use consultancy services. It should be noted that the use of consultancy services is optional, not compulsory. Furthermore, hiring a consultancy firm will not affect the company’s profits. However, it will affect the business owner’s relations with Singapore’s business authorities.

 

How Foreign Companies Benefit Singapore’s Economy

Foreign investments account for foreign direct investments (FDIs) in an economy. FDIs make a country more likely to earn more revenue through taxes and other charges on foreign investment. Foreign companies therefore help to expand Singapore’s economy not only through revenue but also through products in the market. Due to the fact that many foreign companies have opted to invest in Singapore, the variety of goods and services is likely to increase, thus creating a competitive business environment.

Foreign investments also create employment opportunities for Singapore’s citizens. The establishment of foreign companies causes employment opportunities to open up. These employment opportunities could be taken by qualified locals. The increased employment opportunities will subsequently increase the living standards of people due to increased spending. Thus, foreign investments have positive ripple effects on the economy.

 

Further Information 

Business activities in Singapore are now leveraging on technology as a means of increasing the efficiency of production and improving the quality of products. The expectations of the market are therefore rising rapidly. This gives entrepreneurs less time to come up with innovative and creative products that may capture the attention of Singaporean consumers. Summits, exhibitions, conferences, and trade fairs are some of the places that investors could receive valuable investment information about the Singaporean market. Ultimately, prior to opening a business in Singapore, an entrepreneur must have conducted due diligence on not only the market climate but also the bureaucratic processes involved.

Setting Up a Foreign Company in Singapore FAQs

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