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Company Incorporation in Singapore: How it Works?

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Company Incorporation in Singapore: How it Works?

Today, investors and entrepreneurs compare the opportunities that are open to them in their native as well as distant places. For the last two decades, Singapore has played the role of the most favoured company incorporation destination in South East Asia. This period has seen a consistent rise in the number of Singapore business incorporation.

Singapore Offers an Effective Business Environment

Foreigners beeline for the Company incorporation in Singapore as the country ranks 2nd in the Ease of Doing Business indicator in World Banks Report 2020. They bring in a lot of foreign investment in Singapore.

In return, SMEs and the MNCs benefit from Singaporean low tax rates, political stability, corruption-free bureaucracy, efficient communication networks, world-class harbours and airports and country’s contentedness to the emerging markets. All these factors help them in achieving their business goals.

Qualified and English-speaking professionals acquire work visas and passes and relocate to Singapore. In due course, they think of registering a company in Singapore. These aspiring individuals have to be ready with the following:

• At least 1 shareholder

• At least 1 local or resident director

• Also at least 1 corporate secretary

• Minimum initial paid-up capital of S$1

• Registered local address

Company incorporation in Singapore

It is easy for a setup company in Singapore. Normally, it takes only 1-3 days. However, if your application gets referred to the higher authorities, the approval may take up to 2 months. We assist you in applying to ACRA, the Company Registrar, for company name approval and for registering a Singapore company.

The citizens and the permanent residents can initiate the online process for Company incorporation in Singapore on BizFile+ portal using their SingPass IDs. However, foreign individuals and corporations need to appoint an experienced provider of Singapore incorporation services.

Singapore Incorporation Services

The incorporation services providers use their Professional Number to log on the BizFile+ portal and initiate the registration process on behalf of their clients with ACRA. They also assign a company incorporation expert to you to help you out if you stumble during the Singapore business incorporation process.

The professionals working for these services also advise their clients on the types of businesses they can incorporate in Singapore. They also help in identifying the ones that are most useful for the clients’ business activities.

Types of Singapore Companies

• Private Limited Company (Pte. Ltd.)

• Limited Liability Partnership (LLP)

• Sole Proprietorship

All in all, Private Limited Company is the most trusted business structure in Singapore. The majority of registered businesses are of this type. However, the entrepreneurs also have the option of registering business firms like Sole Proprietorship or Limited Liability Partnership.

Private Limited Company

A private limited company, as its name suggests, limits the liability of its shareholders to their investment in its shares. Sole proprietors and partners in LLPs have to bear unlimited liability.

• Pte. Ltd. has 1-50 shareholders.

• At least one of the directors is ordinarily resident of Singapore.

• Anyone over the age of 18 can form a company in Singapore.

• Company has a separate legal identity.

• It is a legal person.

• The company can buy or sell property in its name.

• It can sue or be sued in its own name.

• The company has perpetual existence.

• Singapore allows 100% foreign ownership.

• Transfer of ownership is easy.

A private limited company is credible in the eyes of investors, banking institutions, suppliers, & clients. It can easily raise loans for its expansion.

Singapore Taxation

Registering a Singapore private limited company gives you a huge advantage. It can claim all the tax benefits and exemptions, provided it has a maximum of 20 shareholders.

The private limited company pays corporate income tax on its taxable income which ranges from 0%-17 %. The effective tax paid by the Singapore local companies comes to about 8%-9%. On the other hand, Sole Proprietors and the partners in the LLPs need to pay personal income tax which ranges from 0%-22%.

Tax Benefits

Tax Exemption Scheme for New Start-up

Singaporean startups can claim:

• 75% tax exemption on their first S$100,000 chargeable income for the first three tax filing years.

• Next, S$200,000 get 50% tax exemption.

Partial Tax Exemption

Existing Singapore companies can claim partial tax exemption. YA 2020 onward, they can claim:

• 75% tax exemption on first $10,000 of chargeable income; and

• 50% tax exemption on the next $190,000 of chargeable income

Corporate Income Tax Rebate

Singapore companies can claim an income tax rebate. In YA 2020, it is set at 25% corporate income tax, capped at $15,000.

Appoint an experienced provider of Singapore incorporation services. It will cost you, but it will make your task hassle-free.

• Experts working in these firms are well aware of the latest changes in the rules.

• Handle situations like the rejection of your company name due to infringement of trademarks, use of certain terms, Etc.

• Assist you in appealing against the rejection of the application by ACRA.

After the company registration, we assist you in the opening of the corporate bank account, in acquiring Company Seals and stamps, business licenses, and permits, if business’ activities need them.

 

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