Are you opting to set up a company in Singapore? Well, it could be the right place for your startup. Generally, when startup entrepreneurs search for a favorable jurisdiction for their new business, they look for:
Easy statutory compliance
Affordable tax rates
Easy availability of funds
Air & Sea links to rest of world
Registering a Company in Singapore
It is easy to set up a company in Singapore. Normally, ACRA, the Company Registrar takes only 1-3 days to process an application. The process is genuinely simple and has only 2 steps in it. It also require very few documents. Most importantly, it is free of corruption, bureaucracy, and red-tape.
The new businesses, under Startup tax exemption scheme, can claim 75% tax exemption on their first S$100,000 and 50% tax exemption on the next, S$200,000. They are also privy to rebate on corporate tax and partial tax exemption.
Startup Ecosystem in Singapore
Singapore has a healthy startup ecosystem. It has financing, accelerator and incubator programs to support startups. It also offers tax benefits, rebates and incentives to its SMEs. Yes, it also comes out winner in factors, like:
Singapore, as an entrepot, serves East and West
It is 2nd best place for the 'Ease of Doing Business' as per the World Bank report 2020
Starting a business in Singapore is much easier than majority of other countries in the world
It ranks at the top for enforcing contracts
Compliance requirements are straightforward and easy
Paying taxes is streamlined in Singapore
This country offers a great protection to the minority investors in its companies
Singapore is a Thriving Economy
Singapore is one of the freest economies in the world and a favored destination for Foreign Direct Investment (FDI). It has attracted multinational entities in thousands. Its manufacturing and service sectors are the main contributors. Even in the times of COVID-19 disruption it has attracted nearly $15 billion in FDI in Q3 of 2020.
Singapore charges progressive corporate tax rates in the range of 0%-17%. The effective corporate tax rates most companies pay are in the range of 8.5%-17%.
Singaporean personal income tax ranges from 0%-22%. The dividends disbursed in Singapore are tax-free. There is no tax on Capital Gains or on inheritance.
Let us see a few points that worry business owners:
Yes, incorporating a company in Singapore is easy for the locals. It needs at least one local/resident director. It is a requirement that you as a foreign entrepreneurs will find difficult to comply with.
The alternative is to appoint a nominee director (a Singapore resident). The provider of this service needs to be satisfied that your intentions are honorable and entirely business-related.
Singapore is a small country and the property prices are high. It will also cost you dearly to rent a decent place in the business district. Even renting a place that is 100 meters close to the heart of district will impact your budget.
You may find it difficult to hire certified professionals like engineers. You may have to hire foreign workers and they will not come cheap.
Singapore is a secure place. However, the cost of living is high and competition is stiff. Moreover, you will need to keep in mind small size of population. The native and expat population together comes close to mere 6 million.
I am a technical consultant & a writer who loves to forge knowledge of software products & services.