Offshore Company Setup in Singapore
The best way to describe an offshore company would be a company that is incorporated in a jurisdiction aside from the one that constitutes to the company’s main operations base, or where the company’s primary investors live. To put it simply, an offshore company is a company that is in a jurisdiction outside of your own.
Some of the main advantages of having a company incorporated offshore include the following:
- Tax benefits
- Simpler reporting requirements
- Ease of Singapore company setup
- Ongoing administration etc
Choosing a particular jurisdiction is a very important decision because it can have a significant impact on your company and future business. Singapore’s offshore company formation structure is represented as a tax efficient corporate entity. It is simple and easy to operate, and the business environment is politically and economically stable.
Why Choose to Incorporate an Offshore Company in Singapore?
The choice to incorporate an offshore company in Singapore is due to the following advantages the country has to offer:
- Reduced tax liability: Since taxes remain one of the primary considerations when it comes to establishing an offshore company, Singapore’s simple and low tax system is a winner. Singapore’s tax system includes low corporate and personal income tax rates, tax incentives, tax relief measures, absence of dividend tax and capital gains tax and even a territorial one-tier tax system along with an extensive tax treaty network.
Foreign sources of income that are received in Singapore which meet certain qualifying conditions are exempted from Singapore’s tax. Foreign-sourced incomes which are not remitted into Singapore are exempted from Singapore taxation. Because Singapore follows a single-tier tax policy, dividends can be distributed to shareholders completely tax free. Corporate income tax rate in Singapore is approximately 8.5% for profits of up to S$300,000 and 17% for those above S$300,000.
A company that has just been incorporated enjoys a 0% tax rate on the first S$100,000 of taxable income made by the company for the first three years, as long as the company has a maximum of 20 shareholders and at least one individual shareholder holds 10% of the shares.
- Easy Offshore Company Incorporation – Singapore has been consistently ranked over the past several years as one of the easiest places in the world to do business. Among the reasons for this include the quick and efficient company registration process which is free of bureaucratic red-tape. The Singapore company registration process is fully computerized, involving two steps – acquiring approval for the company name and submitting the required incorporation documentation. Both procedures can be carried out online and barring any circumstance, a company can be incorporated within 1-2 days.
- Credible Image – Offshore companies incorporated in Singapore present a credible and stature image as a legal entity because Singapore is not a tax haven. Therefore, business are taken more seriously by stakeholders.
- Political Stability – Political and Economic Risk Consultancy rates Singapore as the most politically stable country within the Asian region. It has also ranked Singapore as the least bureaucratic country. Thanks in part to the government for its high integrity and pro-business approach, Singapore is often regarded as a country that is rational, pragmatic, transparent and corruption free.
- Liberal Policies for Foreign Ownership – In Singapore, there are no restrictions on the permitted fields of business activity for offshore companies. Foreign shareholding of 100% rate is allowed in all sectors, and shareholders can either be individuals or corporate bodies.
- High Class Banking Facilities – Singapore is one of the leading financial centers in the Asia Pacific region thanks to its sophisticated banking facilities which allow offshore companies to have their pick from a broad range of world-class local and foreign banks to choose from. Singapore’s banks offer many attractive features, and although banks usually require the investors to be physically present for the account opening, some exceptions are made on a case-by-case basis.
Key Requirements for the Incorporation Process
The following are requirements which must be met:
- Company Name Approval – Proposed name of company must be approved by Company Registrar
- Directors – Minimum 1 local resident director that is at least 18-years of age.
- Shareholders – Minimum 1 local or foreign shareholder, may be the same person as director if desired. Maximum of 50 shareholders are allowed.
- Company Secretary – Must be a local resident and qualified.
- Appointment of Incorporation Agent – A professional firm must be engaged to register an offshore company in Singapore
- Paid-Up Capital – Minimum SGD$1 paid up capital is required
- Registered Address – Companies must have a local resident address, no PO Boxes are allowed
- Incorporation Documents – Passport copies, residential address proof, details of parent company
- Incorporation Process – Carried out once your incorporation agent has all the needed documents
- Opening of Bank Account – Your incorporation agent can assist in this process
- Registration for GST – Offshore company may be required to register for GST
- Licenses & Permits – These may be required depending on the nature of your business
- Ongoing Compliance – Incorporation agent will assist with year-end accounting and tax filing
- Relocation to Singapore – You may incorporate your company without having to relocate to Singapore.