Indonesia and Singapore, both prominent members of ASEAN, share strong economic ties and opportunities for cross-border business ventures. For Indonesian entrepreneurs looking to expand their business horizons, Singapore continues to be a top choice. With a conducive environment for business free from corruption, a favorable tax regime, and an agile workforce available in the country, it makes sense to expand to Singapore.
Here’s a step-by-step guide Indonesia business to incorporate in Singapore that will streamline your business. We have comprehensively discussed the regulatory framework and incorporation process, along with expanding your presence to Singapore.
Why Are Indonesians Registering Their Companies In Singapore?
1. Easy Connectivity and Strategic Location
Singapore is strategically located in Southeast Asia, making it a focal point for global businesses. Indonesian entrepreneurs enjoy the excellent connectivity to Singapore, leveraging the direct access to ASEAN markers that are rapidly evolving. The combined population of this lucrative market is more than 650 million people. Therefore, Singapore company incorporation opens up the door to this tremendous opportunity for Indonesian businesses.
2. Favorable Business Environment
Singapore is undoubtedly one of the best countries for entrepreneurs, considering its ‘ease of doing business’. The latest report from the World Bank, released in February 2024 positions Singapore in the second place among all the countries. With a robust commercial infrastructure and connectivity to Indonesia, Singapore continues to be the preferred destination for entrepreneurs.
Singapore is also the only country in Asia to hold an AAA credit rating from the leading agencies across the globe.
The business registration process in Singapore is easy and involves minimal bureaucratic hurdles. This enables foreign companies to set up their businesses in Singapore in just 1 to 3 days.
Guide to Incorporating Your Business in Singapore: Essential Checklist
3. Favorable Tax Regime
Indonesian businesses are choosing Singapore as their preferred commercial hub to capitalize on its favorable tax regime. At 17%, Singapore’s corporate tax rate is one of the lowest in the world. Moreover, foreign businesses can enjoy several tax exemptions and incentives in Singapore to reduce their overall tax liabilities.
Singapore has also signed a double tax treaty with Indonesia and several other countries. This secures Indonesian businesses from unnecessary tax liabilities while expanding internationally.
| Tax Type | Rates in Singapore | Approximate Equivalent in Rupiahs |
|---|---|---|
| Corporate Tax | Progressive: 4.25% to 17% | Rp 1,050,000,000 to Rp 105,000,000,000 |
| Goods and Services Tax | 9% (if turnover exceeds S$1,000,000) | Rp 10,500,000,000 |
| 0% (if exporting goods abroad) | ||
| Tax on Dividends | 0% | |
| Personal Income Tax | Progressive: 0% to 22% Example: Salary S$120,000: 6.6% Salary S$250,000: 12.3% |
Varies based on salary Example: Rp 83,500,000 for a salary of Rp 1,260,400,000 Rp 320,000,000 for a salary of Rp 2,630,000,000 |
4. Robust Legal Framework
5. Strong Workforce
The highly skilled and flexible workforce in Singapore makes it a preferred business hub for Indonesian businesses. This workforce serves as a valuable resource for ventures expanding to Singapore. Therefore, Indonesian businesses can capitalize on the talented workforce of Singapore to innovate and foster better R&D. While accessing a dynamic global market, they can improve their products significantly.
Singapore has a strict immigration policy in place. This ensures that highly skilled and qualified foreign workers can find a place in the country. This boosts the overall quality of human resources in the country.
6. Financial Services and Funding
Singapore offers several sources of funding to global businesses. Indonesian enterprises can take advantage of the local and international banks in Singapore for funding. Besides, the country has numerous venture capital firms and private equity investors to finance expansions.
In Singapore, the financial ecosystem is well-regulated. Its strong credit ratings make it simpler for businesses to obtain financial privileges like loans at competitive rates.
7. Strong Support from Government
The pro-business policies of the government in Singapore offer strong support to foreign companies. Government agencies like the Economic Development Board (EDB) and Enterprise Singapore assist Indonesian companies expand their ventures.
Working with these agencies can help Indonesian entrepreneurs with professional advice, support, financial assistance, and access to valuable business resources.
How To Register a Foreign Company In Singapore?
How Much Does Company Formation In Singapore Cost?
| Cost Category | Estimated Range in SGD | Estimated Range in IDR |
|---|---|---|
| Incorporation Services | S$2,550 (Bonanza Package) | Rp 26,800,000 |
| Necessary Services (1st Year) | Included in Bonanza Pack | Included in Bonanza Pack |
| Nominee Director Service | S$0 – S$2,550 | Rp 0 – Rp 26,800,000 |
| Employment Pass | S$800 | Rp 8,400,000 |
| Dependant Passes | S$400 | Rp 4,200,000 |
| Licenses/Permits (Industry Dependent) | S$50 – S$500 | Rp 525,000 – Rp 5,250,000 |
| Monthly Office Rent | S$550 – S$800 | Rp 5,800,000 – Rp 8,400,000 |
| Employee Salaries (Software Engineer) | S$4,000 | Rp 42,000,000 |
| Employee Salaries (Security Guard) | S$1,700 | Rp 18,000,000 |
FAQs
Why is Singapore an attractive destination for Indonesian entrepreneurs?
Do I have to be present in Singapore to run a business as an Indonesian citizen?
After starting my business, can I move to Singapore?
Yes, you can. For this, you need to obtain an Employment Pass, a special type of visa, which is generally processed within 3 to 6 months. The minimum eligibility criterion to obtain this pass is to earn a salary of S$5,000 at least. This is a standard salary for all university graduates in Singapore. Mature business owners should be earning around S$6,000-S$8,000 (Rp 63,000,000-84,000,000), particularly if they want to bring their family to Singapore under Dependant Passes.
Do I have to hire employees in Singapore to run my business?
Fast-Track Your Company Formation in Singapore with Professional Assistance
Forward-thinking businesses in Indonesia prefer consulting professionals to streamline the process of company formation in Singapore. The IMC Group is one of the first choices for foreign players eyeing an expansion to this country. With professional support from seasoned experts, Indonesian entrepreneurs can incorporate their business in Singapore without legal hassles. It’s logical to have an experienced group of advisors on your side as you drive your ambitions overseas.
