Beside having a unique and lively lifestyle and culture, Singapore also has a great amount to especially offer the international business community. Singapore has many factors that enable company incorporation to flourish and grow.
As we can see, there are even more and more International start-ups find an easy way to incorporate their businesses in Singapore. So, what are the reasons for this trend ? Below are some factors that have been answered by some companies which find it easier to get incorporated in Singapore.
A robust economy
Despite being an island city state with a population of just 5.5 million, Singapore boasts some of the world’s wealthiest citizens with GDP per capital at US$71,310 indicating strong spending power from its domestic consumers. Most importantly, its geographical location allows it to effectively present itself as a gateway to a population of nearly 600 million throughout the Southeast Asian region. Several global rankings by organisations such as the World Bank, the Economist Intelligence Unit and the World Economic Forum recognise Singapore as a leading place to do business. Being among the least corrupt countries in the world, well-known for its strong Intellectual Property protection and regulation, the country boasts a stable political climate and rule of law.
The Singapore government has always been consistently rolling out initiatives to enable start-ups to gain access to properly fund their initiatives that include the backing of equity financing schemes, business incubator schemes, debt financing schemes and tax incentive. Tax incentive schemes designed specifically for startups by Singapore government. For instant, qualifying startups receive full tax holiday on certain portions of their taxable income for the first three years of company incorporation. Unifying the help to startups, offers several funding programs, such as the Startup Founder programs for first-time entrepreneurs, Startup SG Equity for Singapore-based startups, and Startup SG Tech Grant for startups. These programes are well-designed with innovative business concepts and have helped to create a virtuous cycle of entrepreneurial activity over the years.
Attractive tax system
Singapore’s tax system is very attractive to company incorporation. Singapore follows a territorial taxing policy with single-tier taxation. Tax is charged on only that portion of the profits earned or received in Singapore and dividends received by the shareholders are exempted from tax. The headline tax rate is 17% and the effective tax rate for chargeable profits of less than S$300,000 is only 8.5%.
Singapore’s personal income tax rate is very competitive. A progressive taxation policy is in place whereby the first S$20,000 chargeable income is exempted, with progressive rates for each slab and the rate is capped at 22% for income exceeding S$320,000.
More importantly there is no capital gains tax or inheritance tax, which is especially attractive to investors and trusts. Singapore’s has a Goods and Service Tax (GST) that is akin to Value Added Tax, charged at 7% on consumptions of all goods and services. The GST, a broad based consumption tax, is one of the lowest in the region.
Singapore’s workforce is outstanding in terms of flexibility and efficiency. Thanks for of excellent educational system and institutional framework, there are many talented that are adaptive to dynamic business environment. Also, Startups can provide an experience for their staff that is more akin to going on an adventure filled with ambiguity. Founders and pioneer employees are required to take on multiple roles and be comfortable with regular change. In general, employees who have been through the startup journey are trained to think on their feet, are comfortable with changes and making decisions, and constantly seek to innovate and improve on their products.
The immigration policy of Singapore also favours meritorious foreign talent and international businesses are able to mobilize and deploy talent.
Singapore offers a number of advantages for beginning your entrepreneurship journey. In the above discussion, we have thrown some light on the robust economy , government support, attractive tax system and efficient workforce in Singapore. In addition, the leisure and sporting scene is also thriving and growing here.
Singapore enjoys a unique position in the global economy and plays a pivotal role as the business epicentre of Asia. We, at Singapore Company incorporation services, are well adept to help entrepreneurs gain a better understanding of the merits of placing themselves in Asia and opt for Singapore company set-up.