Attractive tax rates
Singapore offers one of the most efficient corporate and personal tax regimes in the world. Based on Year of Assessment 2012, individuals who are tax resident in Singapore has personal tax liability starting as low as 0% to a maximum of 20% for income exceeding S$320,000.
Whereas for corporate tax, newly incorporated companies are allowed a tax exemption of first S$200,000, subject to conditions, where it is considered a “zero-tax jurisdiction”. For taxable profits more than S$300,000, tax rate is flat at 17%. Capital gains in Singapore are not taxable. Following a one-tier tax policy, dividends issued to shareholders are exempted from tax.
Additionally, Singapore adopted a broad-based consumption tax called Goods and Services Tax (GST). To maintain competitiveness, Singapore currently maintains one of the world’s lowest rates at 7%, ranking below the global average VAT/GST of 16.4% and Asia-Pacific of 10.5%.
For companies with income arising from cross-border activities, Singapore has established avoidance of Double Taxation Agreements (DTA) with other international jurisdiction. A DTA also makes clear the taxing rights between Singapore and her treaty partner on different types of income. These agreements also provide for reduction or exemption of tax on certain types of income.
Incorporating a business in Singapore
Known for its pro-business environment, one can easily turn ideas into business and achieve significant profits in Singapore. Compared to other countries, it usually takes only 15 minutes to incorporate a company in Singapore. However, it may take 14 days to 2 months if the application needs to be referred to other authorities for approval or review. An online platform is also available for individuals who wants to incorporate a local company but are not in Singapore.
Strategic Geographical Location
As Singapore is situated in the heart of South-East Asia, entrepreneurs can easily venture into other Asia countries. The port is one of the busiest in the world and the country is classified as a premier International Maritime Centre (IMC). With its international airport, location and maritime centre, Singapore is a prime location where businesses can easily venture out into other ASEAN countries for investments.
Singapore has no restrictions on foreign ownership of business. The repatriation of profits and the import of capital are freely allowed. It is one of the best places to set up your business.
Following are some helpful information in setting up business in Singapore: