There are plenty of reasons why Singapore is the ideal entry for any business looking to enter the SEA region. From highly attractive tax incentives to its booming economy, the international market in Singapore is the largest international market for any country. It’s also one of the fastest-growing international markets with a growth rate of 16%.
5 advantages to expanding in Singapore
1. Tax Incentives
Singapore also offers international companies the opportunity to invest in the country, thanks to its 17% flat tax rate. With no international income taxes, no capital gains tax, and no withholding taxes on dividends, Singapore is a tax haven for international companies.
With no capital gains tax, companies are able to sell their assets or investments without incurring any taxable gains. This is an attractive point for international companies thinking of expanding in Singapore.
Other than its 17% flat tax rate, Singapore holds plenty of tax incentives that can further lower the corporate tax rate of certain companies.
A good example is the partial tax exemption that is eligible for all companies. Companies may receive up to SGD 102,500 (~USD75,000) tax exemptions for each Year of Assessment.
Read our article on 5 ways Singapore companies can save on tax here.
In addition, the remittance or repatriation of capital or profits into or out of Singapore is free of foreign exchange or currency limitations. This removes a worry for companies that often move money resulting in facing imposed taxes.
2. Work Passes & Visas Are Reasonably Obtainable
With plenty of incentives tied around the requirement of being a tax resident or a local shareholder. The first question that comes to mind is whether visas and work passes are immovable obstacles to business expansion.
Yes and no, among the numerous immigration passes or visas in Singapore, the Employment Pass (E Pass) and Entrepreneur Pass (EntrePass) are the most extensively used and popular work visas. These two programs are aimed at foreign professionals and business people that want to relocate to Singapore.
However, we often meet clients that face issues in setting up these passes and were rejected the pass. As such, we highly recommend consulting a professional such as ourselves to help you get the ideal application to get your work visa successfully.
3. 100% Foreign Owned Companies Are Allowed
In many countries, requirements of local shareholders are necessary. This is incredibly difficult for business owners that wish to stay offshore. In addition, companies often lose some form of control.
In Singapore, a company may be completely owned and operated in foreign hands. Giving business owners full control of their new branches. The only drawback to this is that certain Singapore tax incentives or grants often require local shareholders in order to qualify.
4. Safe and Trusted Working Environment
Singapore’s strong stance on Anti-Corruption Laws and overall regulatory compliance is one of the main reasons why businesses want to expand to Singapore. Business owners do not have to worry about safety, political turmoils, or pandering to officials as the corruption of government is almost non-existent, ranking 3rd in the world.
This comes along with a need to maintain regulatory compliance for each incorporated company in Singapore. To avoid facing any penalties, the Accounting and Corporate Regulatory Authority of Singapore (ACRA) maintains a constant requirement for companies in Singapore to be regulated.
This might be a turn out to be a rather tiring process, especially as a foreigner looking to expand into Singapore. We highly recommend professional services like ourselves that already know the ins and outs of Singapore law to assist you right from the start.
5. Market Access and Entry Points To Other SEA Regions
Located in the center of the Southeast Asian region. Singapore is a hot spot to many other neighboring countries. Business owners can look to test waters in a safe environment covered in point 4 before looking to expand to other regions such as Malaysia, Philippines, Indonesia, etc…
Expanding to Singapore is a great option for international companies. The 17% flat tax rate, the availability of work visas and passes, international ownership regulations, corruption-free environment, access to other SEA regions… these are all reasons why you should consider expanding your business here. If this sounds like something that would interest you or if you need help starting up in Singapore contact our team today!
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