Singapore Company Registration
Singapore offers a highly conducive environment for companies that are looking at new opportunities in the Asia region. Its robust regulatory framework, coupled with a stable political and economic structure, pro-business government and a well-established judicial system, have created the ideal platform for investment and made it a major commercial, financial and wealth management hub. Singapore is recognised for its high government efficiency and competitiveness while its robust legal and regulatory regimes make it the most transparent country in Asia. The World Bank and other organisations consistently rank Singapore as the easiest place to do business worldwide. In addition, it has a highly educated and skilled workforce that speaks excellent English as well as multiple Asian languages.
With one of the lowest corporate tax rates in the region (17%), on top of a host of other tax schemes and incentives, Singapore is one of the best countries in Asia from which to grow a business. Corporate tax on foreign-sourced dividends, foreign-sourced branch profits and foreign-sourced service income into Singapore can be minimised, if not completely exempted, provided certain conditions are met. With over 80 double tax treaties, Singapore has one of the most comprehensive networks in the world. Singapore residents can therefore benefit from reduced rates of withholding tax on the repatriation of profits from cross border investments. The absence of tax on capital gains and the lack of withholding tax on dividend payments to non-residents makes setting up a company in Singapore an excellent solution for a holding company for cross border investments.
Singapore Variable Capital Company
Recommended Uses of Singapore Companies
Choosing the right business set up
A Singapore Sole-Proprietorship is a business owned by one person or one Singapore-registered company. It is the simplest form of business structure in Singapore that meets the statutory requirement to register all profiteering activities carried out on a continuous basis.
Legal Status of a sole-proprietorship
A sole-proprietorship does not constitute a separate legal entity and therefore is not distinct from the owner/proprietor.
Partnership company in Singapore
A partnership is a business firm formed by two to 20 partners. Once there are more than 20 partners, the partnership must be registered as a company under the Companies Act, Chapter 50. A partnership is not a separate legal entity and therefore partners have unlimited liability. Partners can be personally liable for a partnership’s debts and losses incurred by other partners.
Limited Liability Company (LLC)
An LLC is a business entity registered under the Companies Act, Chapter 50. It has a legal personality and therefore has rights to own properties, enjoys perpetual succession and can sue or be sued in its own name. If the number of shareholders in an LLC exceeds 50, it is deemed to be a public company. If the company has more than 20 but fewer than 50 shareholders, it is deemed to be a private company.
Limited Liability Partnership (LLP)
A Singapore Limited Liability Partnership (LLP) is a structure that allows a business to operate and function as a partnership while giving it the status of a separate legal entity with its own rights and liabilities distinct from those of its partners. An LLP is therefore a partnership where an individual partner’s own liability is generally limited. This is unlike a partnership where all the partners are personally liable for the costs, risks, debts and losses involved in the business.
In law, a Singapore LLP is a ‘body corporate’ that is formed by being registered under the Singapore LLP Act 2005. A Singapore LLP has a separate legal entity from its partners and its partners have limited liability.
Limited Partnership (LP)
An LP is a partnership consisting of a minimum of two partners, with at least one general partner and at least one limited partner. An LP does not have a separate legal entity from the partners. A general partner is responsible for the actions of the LP and is liable for all debts and obligations of the LP. A limited partner is not liable for debts and obligations of the LP beyond his agreed contribution, provided he does not take part in the management of the LP. Profits are either taxed at partners’ personal income tax rates (if individual) or corporate tax rate (if corporation).
Representative Office (RO)
An RO is a temporary facility with no statutory obligations to file financial accounts and tax returns with the Accounting and Corporate Regulatory Authority (ACRA) Singapore and Inland Revenue Authority of Singapore (IRAS). It is therefore the ideal entry mode for doing business in Singapore for foreigners before deciding to set up a permanent establishment. An RO may only engage in market research and feasibility studies and may not provide services or render any direct or indirect revenue generation activities on behalf of its parent company.
Singapore allows 100% foreign ownership in companies. Therefore a foreign company may incorporate a locallimited liability company in Singapore and own 100% of the shareholding. It is treated as a resident company and entitled to Singapore tax benefits. A subsidiary is considered a separate legal entity. The foreign company’s liability is limited to the share capital it has subscribed.
This is a registered legal entity but, unlike a subsidiary, a branch office is treated as an extension of the foreign company, which must therefore bear ultimate responsibility for any liabilities. A Singapore branch office is allowed to conduct any type of business activity that falls within the scope of its parent company and can repatriate its earnings and capital.