Planning to expand your business or register a company in Singapore? Well, you’re in the right place. Every year, Indians open over three thousand companies in Singapore. This is because Singapore is one of the most ideal regions in the world to start and run business operations. The tax rates imposed in the country are relatively very low – to both foreigners and locals. Any foreigner is eligible to own 100% of a Singapore company. Additionally, the quality of life is also very high. The World Bank has named Singapore the easiest place to open a new business.
Over the past ten years or so, it has become quite common for Indian entrepreneurs to register a company in Singapore. While India is a popular industrial hub, many businesspeople look to expand their commercial empires beyond their native borders. Singapore’s business environment is very welcoming even for small enterprise owners who are looking to expand internationally. Thanks to the Singapore government’s business-friendly corporate tax policies, , tax exemptions on foreign-sourced incomes, liberal foreign direct investment policies and first-world infrastructure, more and more India companies are making Singapore their incorporation destination. Let us dive deep and learn about Singapore company incorporation.
The process of setting up a company in Singapore
The process of registering a company in Singapore is fairly simple and streamlined. Opting for professional incorporation service provider can help you speed up the company formation process.
You can register a company in Singapore through Bizfile, a system that was set up by the Accounting and Corporate Regulatory Authority (ACRA). The key elements involved in the registration process include:
- Company name
- Names of the Directors and Corporate Secretary
- Share structure
- Registered address
- Company’s Constitution (M&AA)
A Corporate secretary is someone who is qualified to act as a company secretary and is responsible for lodging and filing all the necessary documents required by law. Your company can have as many directors as you wish, but at least one of them has to be local. The application along with supporting documents can be uploaded via Bizfile. And the company formation application can be completed in a few hours only. After the new firm’s directors, shareholders and the company secretary provide their consent online, the application for company registration is processed in a few days. Please note that the online should be submitted done within 4 months from the name approval date.
Costs involved in company incorporation in Singapore
Paid up capital in Singapore can be as low as just S$1. You can, of course, increase it later if you wish to. The average cost of incorporation generally ranges from S$2,500 to S$6,000, which depends on the business activity/structure of the new company and required services. This amount largely includes govt fees for company registration and the first year of annual management services (Local Nominee Director, Virtual Office Address in Singapore and Company Secretary).
The most important or the biggest part of the process is the nominee director service. It costs varies from S$1500 – S$3,000 which is based on complexity of business activity of proposed new company. Additionally, many corporate service providers require you to pay a security deposit of an additional S$2,000. This deposit money is utilized as indemnity for the nominee. You are eligible to get it back when his/her contract expires or when you terminate the local nominee director service. On the other hand, a cheaper option would be to hire someone you already know to be the resident in Singapore (Singaporean/Singapore permanent resident) director of your company.
The annual retainer fee for business management (corporate secretary, nominee director, annual returns filing, local address) will cost between S$2,600 to S$5,000. If you relocate to Singapore, you will also save the nominee director service costs. However, you will have to pay for an Employment Pass (S$1200-S$1,500) and/or Dependent Passes (S$600-S$800).
Furthermore, businesses associated with certain sectors like tourism or alcohol must pay the extra cost of licenses, which could range from S$50 to S$500. These costs vary depending on your choice of industry. Other monthly expenses could include renting an office space (about S$800), hiring employees. You will have to approximately spend S$4,000 to hire a software engineer or about S$1,700 to hire a security guard.
Commercial tax concessions in Singapore
Singapore runs a very aggressive commercial campaign in a bid to attract foreign entrepreneurs. The country offers multiple tax concessions to make the process of a new Singapore company registration easy and worth their time. Various Indian firms have greatly benefited from these tax concession schemes after moving their business headquarters to Singapore.
Some of the notable schemes are Global Trade Program (GTP), the International Headquarters Award (IHA) and the Regional Headquarters Award (RHQ). Under the RHQ scheme, business owners receive a concessionary tax rate of 15% on their income from a set of qualifying activities for three years. They can further enjoy these concession benefits for another two years if they can meet the preset conditions.
The qualified participants under the IHA scheme receive an even lower tax rates of either 10% or 5%. Nevertheless, they must exceed the criteria listed for the RHA by a large margin in order to qualify. Under the GTP scheme, the state offers incentives to entrepreneurs who prefer Singapore as their regional base. They get to enjoy a tax concession of 10% or 5% on the qualifying income.
Business VISA in Singapore
Benefits of running a business in Singapore
- Ease of starting a business and managing it: On multiple occasions, Singapore has been ranked highly in international business reports and surveys. It was recently named the city with the highest ease of doing business. It is also known for its highest quality of life and most competitive economy.
- Ideal location: Singapore’s strategic location makes the country the perfect hub to gain access to other South East Asian markets that are otherwise difficult to enter. Markets such as Malaysia, Indonesia, Vietnam and Philippines are difficult to penetrate without a Singapore setup, which helps ease problems like language constraints and cultural habits of people in these countries.
- Skilled force availability: Singapore has abundant skilled workforce available. In addition, you’ll be pleased to know that INSEAD has ranked Singapore second on their Global Talent Competitiveness Index.
- Low tax rates: Singapore offers one of the most attractive commercial tax rates in the world. At just 17%, it is only half of India’s corporate tax rate. Furthermore, Singapore offers tax exemption for companies that are newly formed. Though start-ups are eligible for numerous tax breaks in India, the total tax amount they end up paying is much greater than what they would have to pay in Singapore.
Commonly asked questions about company incorporation in Singapore
1) Is it necessary to come to Singapore to open a business there?
2) Can I relocate to Singapore if I start a business there?
3) Is it compulsory to have employees in Singapore?
4) I do not have a resident director. What can I do?
5) Is it possible for a foreigner to own 100% of the shares?
Yes, that’s possible. There are no restrictions on foreign ownership when setting up your business in Singapore.
Delegating corporate services, especially for services in other countries, can save you a lot of time, stress and paperwork. If you have any questions regarding business incorporation or employment visas for Singapore, feel free to reach out to the friendly team at IMC.
