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The Advantages to Choose Singapore for Foreign Company Relocation
Businesses and entrepreneurs are looking out for other regions where there is a higher growth potential that is able to allow businesses to thrive while being able to meet the demand of business stakeholders at the same time. And the regions that have caught the eyes of the investors are regions in Asia, where economies are among the fastest growing in the world thanks in large part to the lucrative market opportunities.
Establishing a Business in Singapore
Singapore, thanks to its strategic location, acts as a gateway to Asia and has cemented a reputation for itself as the preferred jurisdiction when it comes to businesses of all sizes and potential. Businesses are keen to establish a base and headquarters in Singapore for their Asian operations and there are several reasons that have contributed to this Singapore’s success at driving investment into its shores:
- An Attractive Tax Regime – Considered simple and investor friendly, the highest corporate tax rate that investors can come to expect from Singapore is 17%, while the taxes to be expected on capital gains are at 0%. When it comes to post-tax dividends paid from Singapore, there is no levied withholding tax in this area. And most importantly, foreign-sourced income is exempted from tax as long as the income is subjected to tax in a country with a rate of at least 15%. Thanks to its regulatory framework, Singapore has made its tax system a level playing field with no foreign ownership restrictions and exchange control for investors.
- Double Tax Treaties – Singapore’s double tax treaties are extensive and span to more than 70 countries globally. Some of the key benefits available under these DTAs include avoidance of double taxes, lower withholding taxes and the benefit of a preferential tax regime which all help to minimize the financial tax burden of companies. Together with the absence of capital gains and dividends tax, Singapore is looking like a very interesting investment destination indeed.
- Excellent location and connectivity – Being located along the main trade and shipping routes of the word certainly has its advantages, and it is no secret that Singapore has benefitted from it. Singapore is a renowned transportation hub and home to award winning Changi airport, plus it has been consistently voted as the Best Seaport in Asia for the past 24 years. This along with its world class telecommunications infrastructure and ranking by the World Economic forum as one of the top economics in the word, who wouldn’t want to invest in Singapore and reap all the benefits it has to offer the business world.
- Skilled and Multilingual Workforce – Singapore has a large talent pool which has played a role in reinforcing the country’s reputation as one of the most productive and motivated workforces in Asia. Consisting of citizens from many diverse racial backgrounds also offers the advantage of a multilingual workforce.
- Immigration Policies – Because Singapore welcomes foreign investment that can help develop the country, there are a variety of immigration schemes that qualified entrepreneurs can leverage on to begin working here.
- Great Family Place – Being one of the most prosperous and stable countries in Asia with plenty of public service conveniences, Singapore is the friendliest and warmest place in Asian for working individuals and families alike.
- IP Protection & Efficient Legal System – Singapore’s strong IP infrastructure is backed by a trusted legal system that is aimed at improving the IP landscape to further build it as the best IP hub in Asia. The country’s legal system is one that is globally recognised because it is so efficient and emphasizes integrity, and Singapore is recognised as one of the least bureaucratic countries in Asia. Businesses no longer have to worry about the burden of red tape, bribery or slow legal processes.
Singapore is one of the best places in the world to do business and setup company, and it has been ranked so by the World Bank for seven consecutive years. Businesses who are keen on establishing a base in Singapore have these options of business entities to select from:
- A Branch Office – Although this is a registered legal entity, it is still considered and treated as an extension of the foreign company and therefore, all liabilities will be extended to the parent company. The income from here is not eligible for tax exemption and incentives.
- Subsidiary Companies – Generally the preferred registration option for small and medium enterprises. 100% foreign ownership is allowed if the company is locally incorporated.
- Representative Office – A good option for investors who wish to explore the opportunities in Singapore before committing to an established business venture. This is a temporary setup with no legal persona and will not be able to engage in any trading or business activities as such.
Despite the challenging global economic situation, Singapore still manages to do an excellent job of attracting investments from all over the world. As we can see from the reasons above, Singapore is poised for continued success as it continues to grow into a prominent business centre in today’s economy.