Singapore company formation
Singapore is one of the world’s most successful economies and the country is a major regional and worldwide force in shipping, trading business, high technology manufacturing, banking and financial services. Many of the world’s largest manufacturing and financial services companies have their Asian headquarters located in Singapore.
- 0% corporate tax for non-Singapore profit.
- Minimum paid-up capital at registration is S $ 1.
- One director must be Singapore resident.
- Director / shareholder information is a matter of public record. (Nominees are customary)
- Requirement to file annual accounts. Audit is nt required f the turnover is less than S$5,000,000.
- Company Formation Packages are available. Ask now.
The standard Singapore company used for international business is the ‘Singapore Private Limited Company’, normally abbreviated to ‘Pte. Ltd..’
Tax registration documents are available but specific Certificates of Residence for corporation tax purposes can only be obtained in respect of income which is or will become subject to tax in Singapore.
Agency/Commission arrangements are often used for Singapore company operations.
Singapore resident corporations are subject to corporation tax at a general rate of 17% . However, there is an exemption from corporation tax on income earned outside Singapore unless this income is remitted to Singapore, therefore foreign trading operations may be conducted tax-free through a Singapore company and profits earned outside Singapore will not be subject to Singapore tax.
It is also possible to operate Singapore companies on a ‘mixed-tax’ basis, with both foreign (tax-exempt) income and income remitted to Singapore being subject to tax. Tax residence of the Company can switch from one year to another depending on the circumstances.
Dividend income from foreign sources received by a Singapore company can generally be redistributed free of any withholding taxes.
- CORPORATE INCOME TAX (CIT): Singapore works on territorial tax regime. Resident and non-resident companies are taxed for income accrued in Singapore or remitted to Singapore.
- Tax residence of the Company can switch from one year to another depending on the circumstances.
Singapore Resident companies pay 17% standard rate corporate tax, which can be reduced under numerous exemptions and reductions:
0% tax on on the first S $ 100,000 income for each of the first three fiscal years (at least 10% shares must be owned by private persons)
8.5% tax rate on income up to S $ 300,000 per fiscal year . The taxable income above S0,000 will be charged at the normal headline corporate tax rate of 17%
- INCOMING DIVIDENDS: 0%
- CAPITAL GAINS TAX (CGT): No Capital Gain Tax.
- WITHHOLDING TAX:
ROYALTIES: 10% when paid to from Resident Singapore Company to nonresident company or individual, which can be reduced under tax treaty.
DIVIDENDS: 0% on dividends paid by Resident Singapore.
INTERESTS: generally 15% when paid to from Resident Singapore Company to nonresident company or individual, which can be reduced under tax treaty.
- BILATERAL TAX TREATIES. Singapore has an extensive network of some 50 Double Taxation Treaties and Investment Protection Agreements with virtually all major countries. However, companies are only entitled to benefit from Singapore D/T Treaties in cases where income has been remitted to Singapore.
- VALUE ADDED TAX (VAT). In Singapore such tax is named Goods and Services Tax (GST). The rate is 7 % and applies to services provided between Singapore entities.