Outline
Singapore has been a premier destination for global investors, attracting those seeking to relocate as well as those establishing offshore companies to operate from abroad while maintaining a presence in the city-state. This phenomenon, known as Singapore offshore company registration, reflects the city-state’s allure to investors worldwide.
An offshore company is a company that incorporates in a jurisdiction other than where it operates or where company investors reside.
Many investors and entrepreneurs choose to register a Singapore offshore company because they consider Singapore a tax haven. Although there are bad press out there associating tax havens to money laundering and corruption using fake trusts and shell companies, Singapore implements a stringent process to prevent these scenarios.
Where can you Register Offshore Companies?
Many jurisdictions earn the label of tax haven – here are the top tax havens in 2024:
- Hong Kong Limited (Ltd)
- Singapore Private Limited (Pte Ltd)
- Labuan, Malaysia Company Limited(Co. Ltd.)
- British Virgin Islands (BVI) Business Company (BC)
- Cayman Islands Limited Liability Company (LLC)
- Belize International Business Company (IBC)
- RAK, United Arab Emirates International Business Company (IBC)
Before you incorporate offshore companies, it’s important to consider the following:
- Difficult to open a bank account
- Bad Tax planning Instrument
- Bad International Reputation
To tackle these challenges, these are the 2 jurisdictions that we would recommend with better tax planning And then consider better tax planning jurisdictions:
- Malaysia Company Incorporation offers full tax exemption for foreign source income with more than 72 tax treaties.
- Singapore Company Incorporation offers good international reputation and reliable banking system for international business.
When you register a Singapore offshore company, make sure your service provider is well-equipped for online communication. Paul Hype Page & Co. uses our proprietary software, iBizFile to facilitate a 3-step process for clients, fully equipped with digital signatures.
Benefits of Setting Up Singapore Offshore Company
There are many reasons why investors and entrepreneurs choose to set up an offshore company. Here’s a quick list:
- Asset protection
- Avoid capital gains tax and inheritance tax
- Gain access to tax treaties or lower tax rates
- Good legal frameworks and infrastructure
The best way to illustrate this is through some good ol’ storytelling. All characters in this narrative are fictional although it could very much happen to you in real life.
John from Australia: Practices asset protection by purchasing property using his offshore Singapore company. One day, he had a personal lawsuit filed against him. Another day, he went through a divorce with now ex-spouse. Luckily for John, his assets are protected from his plaintiffs, ex-spouses, or anyone else that may be out to get him.
Eric from America: Has successfully sold his FinTech company and would now receive a large sum of money. Eric will use his offshore Singapore company to receive his gains from selling his company. Thanks to the amazing tax regime Singapore has, Eric avoids capital gains tax.
Mary from China: Runs a successful international shipping business through her offshore Singapore company. She enjoys an Exemption of international shipping profits.
Jane from United Kingdom: Uses her offshore Singapore company to benefit from the 90 tax treaties we have. Thanks to the good international reputation Singapore has, she has been experiencing operational efficiency with banks more willing to accept them. When come a day of legal dispute, Jane would be relieved to have access to the established legal courts in Singapore.
Cons of Setting Up a Singapore Offshore Company
While there are plenty of benefits, there are also cons associated with this company type. These include:
- Inability to lease a property in Singapore
- Potential for double taxation as they are not covered under double taxation treaties
- Unable to employ any staff to operate the company
- All income remitted to the corporate bank account is taxable at 17%
Top Industries for Offshore Companies
Based on experience, the following industries are the more popular choices for investors who are looking to set up an offshore company in Singapore.
- Financial & investment services
- Trading businesses
- Asset holding
- Consultancy services
- Ship management
- Intellectual property
- Real estate
How to Kickstart Your Singapore Offshore Company Registration?
To register an offshore company in Singapore, you complete the process online via the BizFile+ portal managed by the Accounting and Corporate Regulatory Authority (ACRA).
Since logging into BizFile+ requires a SingPass ID, foreign companies may need to enlist the services of a registered filing agent (such as a law firm or accounting firm) to establish the offshore company in Singapore.
The following information is generally required to register an offshore company in Singapore:
- Name of the proposed company
- Brief description of business activities
- Shareholders’ particulars
- Directors’ particulars
- Registered address of the company
- Company secretary’s particulars
- Company constitution
- Any other documentary requirements as may be required by the registered filing agent
Aside from the above checklist, detailed below are the key pointers and regulations that every offshore company in Singapore has to comply for a successful incorporation.
- At least 1 of the offshore company directors must be ordinarily resident in Singapore. Directors must be at least 18 years old and must not have been an undischarged bankrupt or convicted of any offence involving fraud or dishonesty.
- The offshore company must have a registered office physically in Singapore where communications or notices may be addressed.
- The offshore company must appoint a Singapore resident to act as the company secretary within 6 months of incorporation.
Steps After Setting Up an Offshore Company
After successfully forming your Singapore offshore company with ACRA, you will receive a company registration number.
You will use this company registration number as your unique identifier when dealing with government bodies. There are a few things to do after registering the offshore company:
- Setting up your corporate bank account
To ensure smooth financial operations, every business should establish a corporate bank account. You can now open a corporate bank account online without needing to travel to Singapore.
- Adhering to annual compliance & filing
Since the newly formed Singapore offshore company is a separate legal entity from its shareholders or parent company, it must fulfill all required compliance tasks, such as preparing financial statements and filing annual returns.
- Corporate tax filing
Every offshore company must also register with the Inland Revenue Authority of Singapore for its corporate tax filing. There are some tax exemptions for start-ups that you can leverage on – you can read more about tax benefits and reductions here.
Conclusion
Ultimately, everyone with individual assets to protect, or doing business, can legally benefit from offshore companies. Benefits can come from selected jurisdiction’s tax regime, legal framework, industry niches or strategic geographical advantage. If you’re entering the Southeast Asian market, talk to us to find out which jurisdiction your company should set up in to optimise your business.
FAQs
This is the country in which your offshore company exists and which has an influence on your offshore company.
- In most cases, the rules and regulations of a corporate company are less strict in a foreign country than in the home country.
- There is discretion when it comes to financial accounting.
- Offshore in a country that is a tax haven and you get to pay less tax.
- You won’t have to pay corporate taxes for your limited company in your home jurisdiction.
- The general public does not have access to the confidential information of an offshore company.
- Your assets are always safe and protected by the country you offshore in. There is also a separate legal system in those countries which ensures malicious entities do not break into your assets.
- Offshore company incorporation gives the entrepreneurs an opportunity to house intellectual property and global trademarks because of the strong legal system.
This is a country with a small economy that has chosen to impose low or zero tax rates and has reduced complex charter laws on incorporated companies in order to attract international corporations and non-residents and thus earn foreign exchange.
- Payment of their shares.
- Electing the director or board of directors depending on the company’s size.
Share This Story, Choose Your Platform!
Related Business Articles
