Over the past few decades, Singapore has emerged as a key business hub in the international market. The country’s lower tax rates, wide trade networks, and intellectual property protections make it one of the best in the region for foreigners interested in starting a business.
Currently, Singapore ranks as the #1 Best Business Environment in the Asia Pacific.
1. Uncomplicated company tax system
Singapore has a rational and simple tax system that doesn’t levy additional tax on capital gains or dividend income. This tiered tax system takes corporate and personal taxes into account and offers both locals and foreigners equal opportunities to save on tax.
- Corporate tax in Singapore is set at 17%, not including tax exemptions.
- New businesses can receive tax breaks up to three years after incorporation.
– 75% for the first $100,000 and 50% for the next $100,000 for the first 3 years;
– then 75% for the first $10,000 and 50% for the next $190,000.
- Personal tax rate rises gradually and can be set to a maximum of 20% for incomes above $320,000.
- Corporate tax rate is restricted to 17% under the government.
- Dividends are tax-free in the hands of shareholders.
Unilateral Tax Credits (UTCs) and lower value-added tax rates are claimable.
2. Complete foreign ownership and currency control
Foreign business owners exercise complete control over their company, capital structure, and distribution of ownership.
- Foreign shareholders can own 100% of the stock of a Singapore-based company without having to rely on local shareholders and business owners.
- There are no limitations based on the amount of capital or the movement of foreign currency in and out of Singapore.
3. Friendly government policies for startups
The Singapore government has incorporated innovation-friendly policies for foreign investors and business owners, such as tax incentives, grants, and in-kind assistance schemes.
- Besides subsidized labor costs for business startups, the country’s venture funding community in the country has also encouraged foreigners to start and locate their businesses in Singapore, making it easier for business owners to receive funds easily.
- A registered company in Singapore can enjoy government grants as well as receive funds from venture capitals, banks, and other financial institutions.
4. Strong legal system
Singapore’s strong judicial system and consistently low crime rate is a causative reason behind the growth of Singapore as one of ASEAN’s leading business hubs.
5. Productive workforce
The country’s productive workforce is complemented by a state-of-the-art education system and a skilled and dedicated workforce. Singapore’s immigration policy also allows foreign nationals to easily apply and receive approval for work visas.
The Rule of Law upheld by Singaporean society positively impacts foreign business owners starting a business in Singapore as well. The lack of red tape and corruption helps improve workforce productivity and aids in providing strong protection for intellectual property.
6. Quality Infrastructure
Singapore’s infrastructure includes modern residential, commercial, and office structures, a reliable public transport system, and the best international airport in the world.
- The recently announced Singapore Budget 2022 showcases the government’s ambitious plans to encourage the digitalization of the country’s businesses.
- Singapore offers impressive online connectivity and real-world accessibility, making it easier for business owners to move around the country, significantly improving business productivity.
7. Convenient incorporation process
Registering a company in Singapore is a quick and uncomplicated process that can be done within a day. The entire process can be completed online.
Want to know more about setting up a business in Singapore? Read about Meyzer360’s incorporation services here.