Technically speaking, an offshore company is defined as a company that is incorporated in a jurisdiction that is other than where the beneficial owner resides. This means that if you can incorporate a company in Singapore while you live in Australia, it’s considered an offshore company.

It’s not that big of a deal, except decades of bad press has successfully associated the term “offshore companies” with “tax haven”, especially in jurisdictions like BVI or Cayman that are shrouded in skepticism. All the way in Hollywood, films like The Laundromat (2019) portray how money laundering and corruption using fake trusts and shell companies based in tax havens are still widespread. We’re here to tell you there is a better option- Singapore!

 Incorporation checker

Where can you Incorporate Offshore Companies?

Here are the top tax havens in 2021:

  • 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, consider the following:

  • Difficult to open a bank account

  • Bad Tax planning Instrument

  • Bad International Reputation

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 incorporating offshore, it is best to ensure your service provider is well equipped for the online communication. Paul Hype Page uses our proprietary software, iBizFile to facilitate a 3 step process for clients, fully equipped with digital signatures.

” The incorporation system you established for online administration and monitoring keeps everyone in the loop on the status, open tasks, and documentation requirements. Really perfect job! ”

Who uses offshore companies, and Why?

There are too many reasons why someone would want to use an offshore company. 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.

How do you set up an offshore company?

Incorporating 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 incorporate the offshore company for them.

The following information is generally required to incorporate 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

It may also be useful to note the following requirements for incorporating an offshore company in Singapore

  • 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.

Wan Yi
Tips: The entire incorporation process is computerized and can usually be completed within 1 – 2 days. Read here for more information: https://www.paulhypepage.com/sg/incorporation/

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 optimize your business.

FAQs

What is an offshore jurisdiction?2020-10-01T17:41:16+08:00

This is the country in which your offshore company exists and which has an influence on your offshore company.

Why should I offshore my company?2020-10-01T14:35:12+08:00
  • 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.
What is a tax haven?2020-10-01T14:35:30+08:00

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. 

What are the responsibilities of shareholders in a company?2020-10-01T14:36:15+08:00
  • Payment of their shares.
  • Electing the director or board of directors depending on the company’s size.

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