When it comes to being business-friendly, Singapore is a country that needs no introduction. Many organisations have rated the country as excellent for the ease of doing business there and its favourable business policies. As a result, the country attracts both domestic and foreign investors. However, if you incorporate a business in Singapore, you will get more benefits in addition to just these.
One notable benefit is that you may be granted Permanent Resident (PR) status if your incorporation is successful. In this article, we will go into great detail about the various advantages of incorporating a business in Singapore.
The Advantages of Incorporating a Business in Singapore
Having a clear vision of where your business is going is essential during the business development process. You must understand all of the available advantages the business has in order to gain access to them and ensure the business’s success. Singapore provides wonderful benefits to businesses incorporated in Singapore, and we’ve outlined some of the most important ones for you below.
Appealing Tax System
Singapore is widely regarded as a tax haven due to the simplicity of its tax system. In addition, the country does well by not taxing capital gains or dividends, which is beneficial to business.
As a new investor, your business has a better chance of survival than in most other places because the country has a tiered tax system for both personal and corporate entities. For example, you get a 0% tax rate on your first S$100,000 of income, and the rate can only go up to 17%. Similarly, your personal income is taxed at 0% at first, then increases to 20% once it exceeds S$320,000.
Another tax advantage for Singapore-incorporated businesses is that their income is not taxed twice when distributed among their stakeholders, i.e., dividends are taxed at zero per cent.
A Stable Economic Environment for Your Company
Aside from a good tax system, Singapore is also known for its robust free market economy. The city-state’s economy is primarily based on trade and manufacturing while also having a strong financial services sector.
Given its low inflation and unemployment rates, Singapore is unquestionably one of the best places to establish a business. In addition, the country’s government has managed to increase its GDP over the years and has amassed foreign currency reserves that are reputed to be among the top ten in the world.
High-quality housing, transportation, and educational infrastructures in any location are indicators of a good business environment in which an entrepreneur should be able to make an investment. And these are indices where Singapore scores high and can take pride.
Favourable Business Privileges
Incorporating a business in Singapore gives you access to benefits other countries do not provide. One example is that the country allows foreigners to own stock in a Singapore-incorporated company. Since it is not mandatory for businesses to have only local shareholders or partners, you can distribute your ownership to suit your business needs.
Singapore also does not impose restrictions on the repatriation of business profits. There are also no restrictions on the movement of foreign currency into or out of the country, making business transactions easier.
Similarly, the country’s operational and incorporation processes are simple. Their frameworks are simple and among the best in the world. In contrast to some countries, you can expect a simple procedure when incorporating your business. In most cases, incorporating a business in Singapore takes less than or, at most, slightly more than a day.
Excellent Opportunity to Become a Permanent Resident (PR)
Obtaining a Singapore PR status is not always simple, but it could be easier for an investor. To encourage investment and commerce in the country, the Singaporean government encourages businesses to come to invest and also for investors to become residents. This is made possible through the Global Investor Programme (GIP).
However, certain eligibility requirements must be met in order for one to be considered for PR. One such requirement is that the applicant invests at least S$2.5 million in a Singapore company or a GIP fund that invests in Singapore companies. The company must also have a turnover of at least S$50 million in the year before the application date, as well as an average turnover of S$50 million per year for the three years preceding the application date. If the company is privately held, the applicant must also have a minimum shareholding of 30%.
The GIP allows you to become a Singapore Permanent Resident (PR) in two different ways, as detailed in the two sections below. The Companies Act, Chapter 50, recognises these approaches.
With Employment Pass
The employment pass is a visa granted to employees, managers, and owners of Singapore-incorporated businesses. More simply, by establishing a business in Singapore, you will be granted privileged entry into the country for approximately two years. And, given that you’ll need to stay in Singapore for about 6 months to obtain PR, the employment pass will allow you to do so.
The EntrePass enables one to launch an innovative business in Singapore while also residing there. The EntrePass is typically issued to owners of innovative technology creation and application, as well as R&D-intensive businesses, such as those in the clean-tech and biotech sectors.
These permits are valid for one year and can be renewed for another two years. An EntrePass holder, like an Employment Pass holder, is eligible for permanent residence (PR) in due course. This is subject to approval by the Singapore immigration authorities, though the likelihood of approval is high if all requirements are met.
Singapore’s government is one of the few that encourages foreign investment in its territory. The government has created a good business climate through effective approaches, from which various types of businesses have sprung. The government has also done a commendable job of facilitating the growth of these businesses by implementing various schemes.
With all of the support and business climate in Singapore, you stand to gain a lot by establishing a business there. Furthermore, you have a good chance of being granted Singaporean citizenship. As long as you don’t violate any requirements or existing laws, you’ll be on your way to a successful venture while also being considered a member of the wonderful country.
If you are planning to start a business in Singapore and would like to apply for Singapore PR, you should connect with an experienced immigration consultant to guide you through the process and ensure you get an affirmative response.