Singapore, otherwise known as the Lion City or the “Red Dot”, retained its status in 2015 as the ‘easiest place to do business in world’. This is according to an annual report issued by the World Bank, which has become one of the most influential business policy publications in the world. The Lion City has been awarded this honour for the last ten years; ever since the inception of the World Bank report.
The report bases its rankings on several different indicators (eleven to be exact) such as the ease of setting up a business, the ability to enforce legal contracts, access to credit, trading across borders and the advantages and efficiency of the corporate tax system. Singapore ranked in the top 10 for most of the eleven key indicators, being the front runner in the categories dealing with construction permits, enforcing contracts and protection of minority investors.
Easy, efficient and transparent are the vital words to take note of here.
In addition to its strong infrastructure and transparent business environment, Singapore has also signed a network of international agreements to enhance its attractiveness as investment holding jurisdiction. These agreements include 76 Double Taxation Agreements (DTA’s), 41 Investment Guarantee Agreements and 21 Free Trade Agreements. The Red Dot’s DTA partners include some of the biggest established and emerging economies in the world, i.e. Australia, China, Germany, India, Indonesia, Japan, Russia, the United Kingdom and the USA (with whom a limited treaty was entered into). (See: https://www.iras.gov.sg/irashome/Quick-Links/International-Tax/ )
Furthermore, the Singaporean government has incentivised businesses to leverage it as a strategic vantage base from which to implement growth strategies. Businesses with plans to grow through conducting high-value activities may apply to qualify for various incentive programmes, such as the International / Regional Headquarters Award, the Integrated Investment Allowance, the Mergers and Acquisitions Scheme, the Research Incentive Scheme and the Initiatives in New Technology Scheme. (For more information, see: https://www.edb.gov.sg/content/edb/en/why-singapore/ready-to-invest/incentives-for-businesses.html)
Singapore’s tax system is based on the principals of source and remittance, i.e. only profits that are derived from or attained in Singapore, or foreign-sourced profits remitted back to Singapore, are subject to tax. The corporate tax rate is currently 17%. However, several tax exemptions have been put in place for new start-up companies to reduce their effective tax rate materially.
The local government is also taking active steps to develop and establish Singapore as a global intellectual property hub in Asia.
To allow entrepreneurs or businesses to make use of the numerous benefits that the Lion City offers and setup business with substance, Sovereign’s Singapore office can assist with the following:
• Initial incorporation of limited liability company;
• Corporate and secretarial services (including local registered address);
• Professional local directors (which is required by law);
• Accounting and payroll services;
• Assisting in applying for a local bank account;
• Immigration services;
• Serviced office space;
• Legal services (including trademark and intellectual property services);
• Employing staff and appointing experienced, external Executive- and Financial Officers.
For more information, please contact: