Competitive Tax Policies
Singapore has an extensive network of double tax agreements (DTA) with more than 80 countries across the globe.
The key benefits of a DTA are:
• the avoidance of double taxes,
• lower withholding taxes, and
• preferential tax regime
All of these play an important role in minimizing the tax burden for a holding company structure.
This extensive DTA network, coupled with the absence of capital gains and dividends tax, makes Singapore a very attractive jurisdiction for business investments through a Singapore incorporated holding company.
Besides its vast network of free trade and tax treaties, Singapore also offers one of the most attractive corporate tax structures in the world. Although its marginal rate (17%) is the third lowest in the world, its effective tax rate is even lower.
Extensive Air Connectivity
Singapore facilitates trade through a dynamic supply chain management as well as efficient logistics infrastructure. The Singapore Changi International Airport serves over 80 international airlines and connects people to more than 190 cities in 160 countries daily. The airport also handled a record 51.2 million passengers in 2012 and 2.1 million tonnes of air freight annually, according to data from SATS, Singapore’s gateway services provider. It is also home to many leading logistics firms such as UPS and FedEx.
Notably, while corporate tax is calculated at 17 percent on the basis of the company’s chargeable income i.e. taxable revenues less allowable expenses and other allowances, the effective tax payable comes out to be much lower taking into account various government incentives, subsidies and schemes. These include the Corporate Income Tax rebate, Productivity and Innovation Credit Scheme, tax exemption for start-ups eligible for the Start-up Tax Exemption (SUTE) scheme, and the Foreign-sourced Income Exemption scheme (FSIE).
Compared to many countries that are considered as business hubs, it is easier and quicker to register a company in Singapore as the process takes only one day to complete given all the proper requirements are completed and the application is duly submitted. Owning a company in Singapore can set up by anyone including foreigners. An easy and fast procedure availability of an online system has been made by the incorporation where you can submit your application forms via the internet on-line.
Near to Emerging Economies
Access to low-cost labour and emerging markets of the nearby regions are additional advantages.
Funding – Private
In Singapore, there are over 123 commercial banks, 154 fund managers and 291 capital markets services license holders. This enables entrepreneurs to raise funds at rates as low as 1 percent per annum. So availability of funding, especially if you have a world-beater idea, is never an issue.
Funding – Government
To add to it, the Singapore Government also provides funding to new start-ups and existing companies in Singapore. Examples will include SPRING Singapore offering micro-loan programmes, or programmes such as loan insurance scheme, Start-up Enterprise Development Scheme (SEEDS) and Local Enterprise Finance Scheme (LEFS). There is also an Innovation and Capability Voucher (ICV) scheme that companies can benefit from.
Hiring – Locals
If you want to hire locals, then the city-state has a decent pool of English-speaking and highly-skilled work force, with more coming out of several world-class local universities year-after-year.
Hiring – Foreigners
Or else, companies have the option of hiring foreigners, which is relatively easy courtesy Singapore’s open-door immigration policy for decades. Foreigners are allowed to work in Singapore on work visas which may be either work permit, S Pass or an Employment Pass – the preferred route of majority professionals, managerial personnel, and executives.
Flexible Labour Laws
Singapore also has no labour trouble or strikes, and no minimum wage rules either. Though it must be noted that there are two statutory requirements for employers as regards to their contribution per employee – the Central Provident Fund (CPF) contributions and the Skills Development Levy (SDL).
Finally, companies in Singapore benefit from the country’s group relief system for loss transfer. The scheme permits transfer of current year not utilised losses, donations, and unabsorbed capital allowances within group companies; helping the founders/owners enhance their risk-taking capabilities.