5 Benefits of Incorporating a Company in Singapore
- Leading Financial Hub for Business in Asia
Singapore’s strategic location, pro-business environment and competitive workforce makes it a great business hub in the Asia. In addition, Singapore’s well-trained professional workforce, flexible immigration policies, favorable tax legislation, increased tech innovation and its clean reputation as a corruption-free and image will lend credibility to your Singapore company.
- Strong and Reliable Legal System
Singapore has the most stable political environment in South-east Asia, offering entrepreneurs and investors a strong sense of security and comfort. Its legal framework has been recognized as one of the most efficient in Asia, enforcing anti-corruption laws so that investors can conduct business without fear of bureaucratic malaise.
- Favorable corporate tax
Singapore has a flat corporate tax rate of 17% for corporate tax with partial tax exemption for new start-up companies. A registered company in Singapore is subjected to corporate tax, not personal income tax and enjoy tax incentives granted to companies. One such instance is that the partial tax exemption granted to most companies incorporated in Singapore. Furthermore, Singapore follows a single-tier tax policy which means once the income has been taxed at the corporate level, dividends that are distributed to shareholders will not be subjected to further taxes.
- Avoiding Double Taxation
As the world grew to become a global village, Singapore Government realised the importance of remaining attractive to businesses by introducing means to help the companies avoid double taxation. This led to the provision of a foreign tax credit (FTC Scheme) for taxes suffered by the Singapore-registered companies overseas on the remitted income; as well as through several avoidance of double taxation agreements that Singapore signed with various countries/regions. The foreign-sourced income exemption regime was introduced in 2003, which was aimed at simplifying the foreign tax credit administration for businesses. Moreover, the Singapore Government introduced a FTC pooling system in 2011 to give businesses greater flexibility in their FTC claims and reduce the taxes payable on foreign income. Another scheme was the Double Tax Deduction Scheme for Internationalisation (DTDi) introduced to provide support to local businesses looking to venture into the international markets.
5. Grants / Schemes for Singapore Companies
Singapore companies have the benefits of low corporate tax rates, a tight intellectual property rights regime, skilled man-power, the world’s best incubating infrastructure, and good connectivity to emerging markets of Asia. Additionally, there is a plethora of cash grants or financing schemes, propelling the nation towards a thriving start-up ecosystem.
a.) Startup SG is the umbrella branding unifying all the support schemes for start-ups in Singapore. Entrepreneurs can now access local support initiatives as well as connect to the global entrepreneurial network. It is also a one-stop source for loans, Singapore business grants, funding and capability-enhancement.
b.) Automation Support Package (ASP) was introduced in Budget 2016 to encourage companies to embark on full-scale deployment of automation solutions across existing operations. The aim is to reduce manpower reliance and improve productivity by embarking on large-scale automation projects. Companies can tap on a package of grant, tax and loan incentives to defray the cost of large-scale deployment of automation solutions across existing operations.
c.) Financial Sector Technology and Innovation (FSTI) Scheme is launched by the Momentary Authority of Singapore (MAS) to provide support for the creation of a vibrant ecosystem for innovation, under which the Authority has committed S$225 million over a five-year period. The scheme is to attract financial institutions to set up their innovation labs in Singapore, support the building of industry-wide technology infrastructure, as well as catalyse the development of innovation solutions.
d.) Productivity and Innovation Credit (PIC) Scheme provides tax exemptions/deductions for six categories of qualifying activities and has been substantially expanded since its introduction. Under the scheme, Singapore’s business entities can enjoy tax deductions/allowances for investment in innovation and productivity improvements.
e.) Research Incentive Scheme for Companies is a grant given by the Singapore Government to develop research and development capabilities in strategic areas of technology.
f.) New Technology Grant encourages capability development in applying new technologies, industrial R&D and professional know-how.