Re-domiciliation in Singapore is Good
From having business-friendly policies, great infrastructure, a stable economy, and honest laws, Singapore is one of the best business hubs in the world. It is very supportive of the business environment. This makes it easier for foreign companies because the re-domiciliation in Singapore is very common.
Re-domiciliation is where the company transfers its registration jurisdiction to another one. This is not like the company that sets up a branch overseas or incorporation of a subsidiary in another country.
Here are the reasons why you should re-domicile in Singapore:
When you re-domicile your company in Singapore, you can take advantage of the political stability of the state. They have a stable and consistent legal structure, and the workforce is highly-skilled. Popular for its pro-business legislation and strong regulatory scheme, Singapore is a business hub that attracts investors and businesses.
Re-domiciliation is appropriate for the purpose of commercialization. When a company re-domiciles in Singapore, its identity remains the same. It is only its place of incorporation that changes from overseas to Singapore.
This paves the way for business continuity, which means the goodwill, track records and credits are still intact. Also, this is helpful if the re-registered company Singapore looks for bank credit or should demonstrate its area track record so they can get a license if necessary.
Disruption is Minimized
Traditionally, the way to do it is to set up a subsidiary in Singapore and establish a local presence. The inward re-domiciliation gives more options like instead of shareholding, paid-up capital and directorship, you can enjoy minimized disruption. This applies to your operations.
There Are Tax Advantages
When it comes to tax advantages, there are lower rates in Singapore in comparison to other developed countries. While the foreign companies can use this to their advantage when they shift operations to a Singapore subsidiary, it could become more challenging to do this.
The reason for this is that a lot of countries began tightening their rules according to the cross-border taxation corporate groups to lessen base erosion and profit shifting. These measures where the company wants to make it seem as if the company-earned profits are from the related company. This is to have the profits taxed at a lower rate than the second country.
It is More Flexible
Whatever your reasons are for transferring your business to Singapore, you will enjoy better flexibility. You can use this opportunity to re-organize corporate groups while you are preserving the rich corporate heritage of your company. It will not affect the identity of your company, and this makes it easy to transfer.
Re-domiciling Signals to Do Business in Singapore
When you re-domicile in Singapore, you will send an important signal to your main clients about how serious you are. That is because when clients see that you are operating in Singapore, they know that you are focusing in that country and Asia.
Favourable Conditions to Foreigners
Since Singapore has a consistent ranking for being one of the top economies where you can do business, it has a very good impression. The robustness of its economy includes a stable macroeconomic environment, efficient tax regime, pro-business legislation, public institutions, healthy finances and public institutions. They are all transparent and efficient, and the political stability of the nation is efficient. Their workforce is highly-skilled and they have a good legal structure.
Foreign companies that want to re-domicile in Singapore can benefit from these conditions by being in a business hub. It is also their gateway to other markets in Asia.
Find Out if Your Country is Eligible
Before you apply for re-domiciliation in Singapore, you must check if the name of your company is acceptable for registration. Even if you want to use the same name as what you use overseas, this might not be an option. That is because another company in Singapore might have a similar name.
You must also check if your company can be re-domiciled in Singapore. The main considerations are size, legality, and solvency.
Your company should meet the requirements first for size. That means your company should meet at least 2 of these criteria:
- The total assets are worth more than S$10 million
- Yearly revenue is over S$10 million
- You have at least 50 employees
If you are planning to re-domicile your corporate group to Singapore, then it is the whole group that should meet the criterion.
Your company should pay its debts because they are due in the next 12 months from the date you applied for re-domiciliation. Also, your company should not be in liquidation, receivership or other processes for winding up.
Your assets should exceed liabilities, so your net asset value must not be negative.
Legality means you complied with all the important company law rules in the original place of incorporation of your company. It should also be that you are not re-domiciling in Singapore for improper or illegal purposes like defrauding creditors.
Most importantly, your incorporation should have legal provisions for companies that want to re-domicile overseas. A couple of countries should allow 2-way re-domiciliation. These countries are Australia, Canada, British Virgin Islands, and New Zealand.
Other jurisdictions such as Singapore, the United Kingdom, and Hong Kong are only allowing inward re-domiciliation. That means, foreign companies can register again as local companies, but the local ones are not allowed to register again as foreign companies.
Therefore, if your company moves from common law to jurisdiction, then the company law’s basic structure would be the same.
Re-domiciliation Basic Requirements
- There should be at least 1 shareholder.
- You need one of the directors to be a Singapore local resident. It can be a citizen of Singapore, permanent resident, or an employment pass holder. The nominee directors are also permitted for this.
- The company secretary has to be a local resident for at least 1 year.
- The minimum paid-up capital is S$1.00.
- You need to have a local registered address.
With the benefits of re-domiciliation in Singapore, there are so many reasons why you should do it. Aside from the fact that it is a top global business hub, they make it easy for investors and business owners to do so. You can contact 3E Accounting if you need an Incorporation Agency in Singapore because they are the best.