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Singapore Company Incorporation for a Foreign Business

Posted last August 6, 2015, 7:22 am in Business report article

Singaporeans have worked hard to reach the position they have achieved as the financial hub of Asia-Pacific. It is not a place rich in natural resources, rather, its riches are founded on its trade-based economy and knowledge-based society.

It is Profitable to Indulge in Singapore Business Incorporation

Singapore, today, is one of the pro-business places to incorporate company in Singapore. They have the infrastructure, finance, expert professionals, and favorable trade treaties to back a business up and help them realize their true potential.

Geographically, Singapore sits on the maritime trade routes between the old and the new world. It is a much enviable location as it has enabled it to develop itself as the entrepot of Asia. It is no wonder that Singapore ranks high in the list of places that generate great amounts of foreign trade.

There are only a few tax regimes that could match what Singapore offers in tax exemptions, incentives, and rebates. Singapore has implemented pro-entrepreneur corporate income taxation policies. The policies are one of the primary reasons why Singapore has attracted so much foreign investors and entrepreneurs leading to increased number of Singapore business incorporation.

Corporate Income Tax in Singapore

In case of the start-up, Singapore registered companies authorities waive corporate tax completely for the initial three years, on their chargeable income of up to S$100,000. Moreover, they also get 50% tax rebates on their chargeable income of up to S$300,000. This has created a strong small and medium enterprise sector in Singapore. This sector, in turn, has made it possible for Singapore to bring down the rate of unemployment to a very negligent level.

The pre-registration requirements of Singapore company incorporation are as follows:

  • Minimum initial paid-up capital of S$1
  • At least 1 shareholder
  • At least 1 nominee resident director
  • At least 1 company secretary
  • Registered address for the company office

ACRA (Accounting and Corporate Regulatory Authority) advises the corporate to appoint firms offering incorporation services. They have the option of using one of the following business structures for their Singapore business incorporation.

1)      Subsidiary Company: A subsidiary company is a Singapore registered private limited company. It has a legal existence and according to the Singapore Companies Law, has the rights of a natural person. It offers limited liability to its shareholders or members. The foreign-based parent company has the right to own its 100% shares.

2)     Branch Office: A branch office is an extension of its foreign-based parent company. It is not a separate legal entity. The parent company is responsible for its losses and debts.

3)     Representative Office: The parent company, most often, utilizes a representative office to research and survey the market before committing itself. The representative office cannot engage in trading or business activities. It has no legal identity and the parent company is responsible for its losses and debts.

If the parent company is relocating one of its representatives to Singapore, then the individual must apply and acquire one of the Singapore work passes. It is necessary before the individual can take charge of the Singapore operations. Alternatively, the parent company can hire a nominee local director to comply with the statutory compliance dictated by ACRA.

Singapore company incorporation is a straightforward process. It takes only two procedures to complete. In the normal circumstances, it is possible to register a Singapore business in 1 – 3 days.