Singapore has been one of the top destinations for investors globally. While some of the investors are looking to relocate to Singapore, others plan to work from an overseas jurisdiction and having a presence in the city-state – this is an offshore company.
An offshore company is a company that is incorporated in a jurisdiction other than where it operates or company investors reside.
One of the many reasons why investors and entrepreneurs opt to register a Singapore offshore company is that Singapore is considered as 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?
There are many jurisdictions labelled as a tax haven – here are the top tax havens in 2022:
Before you incorporate offshore companies, it’s important to consider the following:
To tackle these challenges, these are the 2 jurisdictions that we would recommend with better tax planning And then consider better tax planning jurisdictions:
When it comes to Singapore offshore company registration, it is best to ensure your service provider is well-equipped for the 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:
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:
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.
How to Kickstart Your Singapore Offshore Company Registration?
Registering an offshore company in Singapore is done online via the BizFile+ portal managed by the Accounting and Corporate Regulatory Authority (ACRA).
Since a SingPass ID is required to log into BizFile+, foreign companies may need to engage the services of a registered filing agent (e.g. a law firm, accounting firm) to set up the offshore company in Singapore.
The following information is generally required to register an offshore company in Singapore:
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.
Steps After Setting Up an Offshore Company
After successful Singapore offshore company formation with ACRA, you will be given a company registration number.
This company registration number will be used 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 that financial operations are run smoothly, every business is encouraged to set up a corporate bank account.
The opening of a corporate bank account can now be done online without having to travel into Singapore.
- Adhering to annual compliance & filing
As the newly formed Singapore offshore company is a separate legal entity from its shareholders or parent company, all required compliance such as financial statements, filing of annual returns, and more are required.
- Corporate tax filing
Every offshore company will also be registered 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.
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.
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.