Ranked number 1 (2010, 2011, 2014) for world’s easiest country to do business in World Bank's Ease of Doing Business Rankings
It takes 3 days to set up a company, 14 days to obtain approval to build a warehouse, and 10 days to get credit. As long as you have a feasible business plan, the infrastructure is there for you to get started, all the way to the marketplace.
In the 2014 report of Singapore from Global Entrepreneurship Monitor (GEM), Singapore is “one of the leading innovation-driven economies and the top country in the Asian region when it comes to the utilization of the latest technology, with one of the largest number of customers based overseas amongst new businesses.”
“The country is ranked 1st … amongst similar innovation-driven economies.”
Geographic advantage: The Changi Airport operates one of the most comprehensive flight networks in the world, serving as a stopover for many long haul flights. The Singapore port is the busiest in the world, a perfect place for trade or bunker stopovers, connecting shipping routes from all over the world.
Tax advantage: Singapore offers a very competitive tax rate, with a lack of ownership of exchange restrictions. Further, Singapore has double tax agreements (DTA) with major trading countries around the world that protect investors from paying double taxes.
Labour advantage: Added to that, Singapore has a large base of skilled workforce, mostly bilingual, that helps businesses to connect to different markets. Singapore has managed to attract some of the best foreign talents, and the local workforce is among the most literate in the world and highly skilled.
Other than that, a great legal infrastructure, intellectual property protection and an immigration policy that welcomes, rather than discriminates, also serve to consolidate Singapore as the greatest place in the world to do business.
Foreign companies have a few options when setting up a company in Singapore, namely, Representative Office, Subsidiary Company, Branch Office, and Private Limited. The help of a professional firm must be engaged during the registration process. Depending on the company’s strategic planning, the varying options apply. Take advantage of our experience and knowledge to set up an office in Singapore. We are backed by our legal counsellors and business advisors to assist your start up process so that you can concentrate on growing your business.
When entry into Singapore is for the purpose of only establishing a presence, without the intention of carrying out any business activities, setting up a representative office (RO) is usually the best option. The company will require no legal representatives, nor is bound legally to any obligation, serving only as an administrative outpost for non-commercial and non-profit activities.
ROs are allowed to carry out the following activities:
ROs are NOT allowed to engage in the following:
While the RO must be manned by a representative from the foreign company’s head office, it can employ the services of local staff, not exceeding five employees.
If a company requires a temporary arrangement to understand the market better, such as to carry out market research, setting up a representative company is a viable option. As any activities should not yield any revenue, the foreign company should take budget into consideration in taking up this option. At the same time, this is an excellent option for market understanding before committing substantial investments. However, an RO can only be registered for three years, after which it must be upgraded to either a branch office or a subsidiary.
If a foreign company wants to incorporate a private limited company in Singapore with majority shareholder as a foreign entity, it should be registered as a subsidiary. This option qualifies the business as a resident company and is thus eligible for Singapore tax benefits. This option limits the foreign company’s liability to the share capital it possesses (up to 100%) in the subsidiary, and it is therefore not legally obligated to hold responsibility to any liabilities of the subsidiary company.
According to the Companies Act, the appointment of at least one director is required. Further, at least one director should be a Singapore resident, whether a citizen, permanent resident or employment pass holder. A subsidiary company must maintain a locally registered office.
The obvious advantage is that a subsidiary is considered to be a separate entity from the foreign parent company, and is therefore treated as a local company. As such, the foreign company will be protected from any forms of liability in Singapore. Moreover, a subsidiary company will have access to local grants and incentives. Favourable tax benefits will also be a considerable cost advantage for a subsidiary company.
If a foreign company does not desire to incorporate as a private limited company in Singapore, it can first register itself as a branch office to carry out business activities under the business name of the foreign parent company. A branch office serves as an extension of the foreign head office, and the structure of the company and the shareholders are directed by the foreign company’s Memorandum and Articles of Association (MAA). It is important to note that, legally, a branch office is not a separate entity to the main office, unlike a subsidiary company. Therefore, the parent company is liable for the debts and liabilities of the branch office. A third party can initiate legal proceeding against the parent company by approaching the Singapore courts of law.
According to the Singapore Companies Ace, a branch office requires the appointment of at least 2 agents who are ordinarily resident in Singapore and the establishment of a registered office in Singapore. The branch office’s business activity is limited to the scope of the business activity of its parent company, and only the revenue from business activities in Singapore will be subject to local corporate taxation.
On the surface, setting up a branch office is unattractive for most small and medium sized businesses as it can incur unlimited liabilities for the parent company. Securing incentives or investments would also be a problem, due to its lack of status as a local company and due to a perceived lack of commitment on the part of the parent company. A branch company would also not be eligible to any tax benefits available to local or subsidiary companies. However, the income of the branch office which is derived from business activities carried out outside Singapore would not be subject to taxes.