Last Updated on May 10, 2022 by Surender Kumar
For businesses considering incorporating their company in another country, it’s important to understand how different economic climates affect businesses. It’s also helpful to know which countries strive to create a supportive and thriving environment for the new and existing companies.
One country that ranks top when it comes to ease of doing business in Singapore. Singapore is a premier choice for domestic and foreign countries to incorporate. That may be why the World Bank has ranked Singapore first when it comes to ease of doing business for ten consecutive years.
There are many good reasons Singapore is an appealing destination for companies worldwide. The country has a robust economy, and most importantly, the tax rate in Singapore for companies is levied on profits and not revenue. Initiatives like these help businesses focus on their core business needs instead of drowning them in government compliances and taxes.
If you plan to incorporate a company, here are three reasons you should consider doing it in Singapore.
It offers numerous corporate tax benefits
One of the primary reasons entrepreneurs and business owners prefer incorporating their companies in Singapore is the corporate tax benefits. The country has one of the most sensible and rational tax systems globally.
It doesn’t charge taxes on capital gains or dividends from a business. The tax rate in Singapore for companies is 17%, and it’s levied on the profits and not the revenue, which is a great benefit for businesses.
On top of that, the government offers numerous tax incentives for most companies, bringing the tax rate significantly down from 17%. Startups enjoy tax exemptions for the first three years while paying no tax on the first $100,000 of chargeable income. On top of that, they have to pay only 50% tax on the next $200,000 of their chargeable income. That’s why on average, 29,781 companies get registered every year in Singapore.
Singapore has a robust and free-market economy
A country’s economy affects the success of the businesses in that country. Singapore’s economy is based on manufacturing, finance, and trade, making it robust and a free market economy.
The service industry in Singapore employs more than 805 of the workforce and accounts for 75% of Singapore’s GDP. The country has successfully maintained low inflation, which helps it promote employment. The country exports $500 billion worth of goods each year.
Despite being a geographically small country with limited resources, it has bulletproofed its economy that supports hundreds of thousands of businesses.
It levies no foreign currency control and allows 100% foreign ownership
Unlike many other major countries like China and India, Singapore doesn’t restrict foreign currency movement in and out of the country. The free movement of the currency offers companies freedom and flexibility to do their business.
Another element that distinguishes it from other countries is that Singapore allows 100% foreign ownerships to foreign companies that are incorporated locally. But the company must have at least one nominee director who is a resident of Singapore. The nominee or local director must have a permanent address in Singapore.
Also, a foreign stakeholder can bring any amount of capital investment from their home country to their company registered in Singapore. There are no caps on the maximum foreign investments.
Apart from the tax benefits and robust economy, entrepreneurs receive guidance and numerous grants and seed funds offered by startups incubators programs in Singapore. It is undoubtedly a great choice for entrepreneurs to to register their companies.
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