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Why Incorporate A Company in Singapore

What are the reasons why you should incorporate a company in Singapore? This question must be the most sought-after one while we see hundreds of new businesses set up in Singapore every year.

Singapore has been well known for its rags-to-riches story from one of the poorest countries to one of the wealthiest countries in the world.

Not from a long time ago, Singapore faced all the pressing problems of slum community areas, unemployment, and housing crises. Now, Singapore has become one of the most prosperous nations on Earth thanks to its sweeping economic reforms and investments in human capital.

Today, the Lion City is the center of international trade and services of the world. Because of this, let us find out the 7 reasons to register a company in Singapore!

7 Reasons Why You Should Incorporate a Company in Singapore

1. Liberalized Regulation and Low Tax Policies

As a global city with one of the most pro-growth systems in the world, Singapore is an ideal destination to start a business. In 2020, Singapore ranked 2nd in the world’s top 20 easiest countries for doing business, according to the World Bank’s Doing Business 2020 report.

The government of Singapore has long offered foreign investors favorable conditions such as low tax rates and simplified regulation policies.

With regards to its regulations, you can set up a company in Singapore in a very fast and convenient way. The whole process can be completed within a day and online in these 5 steps.

  • Step 1: Choose the type of company;
  • Step 2: Engage company registration services in Singapore;
  • Step 3: Choose the company’s name;
  • Step 4: Register the new company;
  • Step 5: Receive the registration result.

For more details, check out our business guide on how to set up a company in Singapore for foreigners.

In terms of tax schemes,

  • Singapore has one of the lowest corporate income tax rates in the world with a cap on 17% of the tax;
  • Singapore follows a territorial basis of taxation, which means your income generated outside of Singapore won’t be taxed unless it is remitted to Singapore;
  • The personal tax ranges from 0 to 22% depending on one’s income status;
  • There is no tax on capital gains and dividends in Singapore;
  • Double taxation is abolished due to Singapore’s large network with 80 countries worldwide on their Double Taxation Avoidance Agreements;

If you invest in government-favoring sectors such as R&D or technology & innovation, you will enjoy exclusive tax incentives for your investments.

To learn many more tax exemption and reduction programs, refer to our article “Singapore Corporate Tax: Everything You Need to Know” for more information.

2. English as an Official Language in Singapore

This is one of the major benefits of registering a company in Singapore. How can you do business in a country when you don’t speak the same language as your business partners and pretty much people around you?

As early as its independence from Malaysia, the first Singaporean leaders have introduced one of the most ambitious structural reforms. They introduced English as the official language used in the country.

Nowadays, students are taught Standard English at all levels of education. At the same time, English is the “working language” used in the domestic business environment and is a great bridge to connect its people to the broader global community.

About 8 in 10 people in Singapore use this international language. To illustrate, a taxi driver or a janitor can carry on a good English-speaking conversation with foreigners. Following English are other commonly used languages such as Chinese, Malay, and Tamil.

3. Financial Center – Strategic Location of the World

As opposed to its lack of natural resources and small-size territory, Singapore is fortunate to have such a strategic location in the world. The global connectivity allows Singapore to be a commodity trade center and aviation hub. Also, the country is a great gateway for international businesses to get involved in Asia due to its proximity to other markets in the region.

Singapore finance center

Singapore has multiple bilateral and regional free trade agreements with major world trading partners. Because of this, it is a destination attractive to multinational corporations due to its preferential tariffs and trade benefits with other countries.

Singapore is home to about 46% of all Asia regional headquarters across a diverse range of industries. Some of Singapore’s leading banks include Citibank, HSBC, OCBC, Standard Chartered, and UOB. In the future, more digital banks will receive full bank licenses from the Monetary Authority of Singapore (MAS), making the Singaporean market even more appealing to foreign investors.

Because of this fact, Singapore is well qualified to receive exclusive world services that other nations may not be able to have. One good example of this is Singapore’s fastest Internet speed in the world. In light of high competitiveness in the world today for 5G network development, the Internet comes as a crucial aspect to consider.

4. Highly-qualified workforce

As you open a business in Singapore, one of the relevant questions is how to have a high-quality workforce to employ and to contribute to the success of your company.

For many years in a row, Singapore has been in leading positions in the Global Talent Competitiveness Index which is an annual report indicating a country’s ability to attract and retain talent.

Not many countries in the world have such a well-trained workforce as that of Singapore. Thanks to the country’s outstanding education system and supportive ecosystem, the Singaporean workforce generally possesses a good command of English, technical skills, and a strong academic background.

This would serve as a substantial benefit for companies looking for high-qualified staff.

5. Eased Work Visa Programs

Singapore has been a country of immigrants for a long time. Although this city-state has slowly tightened its requirements for foreign workers over the past few years to offer fair employment opportunities for its citizens, the country is still one of the easiest places in the world to obtain a work visa for foreigners.

Singapore Work Visa

The work permit and visa programs are under the governance of the Ministry of Manpower (MOM). The nation of Singapore offers foreigners various types of visas. Whether you move to Singapore for a job, investment plan, or short-term visit, you can apply for one to have access to Singapore.

For instance, the Employment Pass (EP) allows white-collar professionals to seek fast legitimate employment status in Singapore on a two-to-three-year basis. Particularly, the requirements for this type of visa include:

  • You are a member of a profession that requires an advanced degree;
  • You hold either a high-skilled job or a managerial position that lands you a monthly income of at least S$4,500.

A more common type of work permit for foreign workers is the S Pass. The work permit offers a gateway to Singapore for workers with mid-level skills and a monthly income of at least S$2,500.

For foreign entrepreneurs who are looking for a start-up ecosystem to invest in their business, they can look into the Entrepreneur Pass. The advantage of this pass is that it has no requirements for academic background and is mostly based on your business proposals or record of past investments. It is a great way to gain a work visa in Singapore.

Or you can refer to Dependant’s Pass if your purpose is to sponsor a family member to move to Singapore. The interesting fact is that once having in place the Dependant’s Pass, your dependent is allowed to seek and secure employment. This can be done with a Letter of Consent from that person’s employer sent for approval from the MOM (Ministry of Manpower).

For information on other types of work visas, you can read Singapore’s Work Permit in 10 minutes.

6. Stable Political System

For most democratic governments, the transition to a new ruling leadership often entails a change in public policy. When it comes to Singapore, the country benefits from its infrequency of government transfer of power which allows its political system to be relatively stable. For the most part, a stable political system means a low-risk environment to do business.

This, combined with Singapore’s control of corruption and government effectiveness, has gained the trust of international businesses to pour their investments into this land.

Singapore also has a reputable jurisdiction in its world-class rule of law. This has allowed its jurisdiction to be chosen as the legal basis for most corporate negotiations and contracts. At the same time, its strong intellectual property legal framework ensures the protection of business’ great ideas and innovations.

7. Quality of Life

Last but not least, why incorporate a company in Singapore in a long-term plan if the country lacks a desirable standard of living? If you make an investment or employment contract in a certain country, it’s just a matter of time that you take into account your well-being when living in that country. That wouldn’t certainly be a problem if you live in Singapore thanks to its high quality of air, water, and food.

The modern infrastructure of this city-state will make sure the time you spend going from and to your workplace won’t be wastefully lengthened.

The first-class education system and universal healthcare coverage also come as substantial benefits if you have family members living with you in Singapore.

Conclusion

Singapore is a success story of transforming itself from a poor city to a financial center of the world. If you plan to open a business in a foreign country, you should consider the 7 reasons why you should incorporate a company in Singapore.

If you are interested in setting up a business in Singapore, you may want to read our guide on how to start a business in Singapore for foreigners.

Should you have any questions regarding Singapore incorporation, contact us now for our consultancy! We would be glad to help you!

 

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