Strategically located in Asia, Singapore is a well-known location that primarily promotes ease of doing business in its country. A lot of investors prefer Singapore as their location to set up a company and garner success. Singapore’s business-friendly and pragmatic tax system play an important role in attracting foreign investors. Not just this, Singapore is among the wealthiest countries in the world, along with the ranks of Luxembourg and Qatar in terms of economic output per head. So, if you are looking for somewhere to invest, Singapore is surely a great place, with a strong emerging economy and also a prime location for trade and business.
Coming to the type of entity one can form in Singapore, Holding Company in amongst the popular business entities preferred by the entrepreneurs. A Singapore holding company is the one that owns stock in another company-called the subsidiary or a company that owns property such as real estate, patents, stock, and other assets. The goal of a holding company is not to produce goods or services but rather to own shares, to control its subsidiary and to reduce risks for the owners. This article takes you through the reasons why one must set up a holding company in Singapore.
Why Start a Holding Company in Singapore?
As mentioned earlier, Singapore is among the wealthiest nations in the world with strong emerging market and strategic location for trade and business opportunities. If you are looking forward to invest in Singapore, the below mentioned advantages will give a boost to your decision. Take a look.
1. Ease of Doing Business
Singapore has been ranked among the top 3 economies in the Ease of Doing Business rankings by the World Bank for 12 consecutive years. Singapore company registration is relatively easy as compared to other developed countries in the world. Company registration, submitting all the necessary documents and collecting the required documents can be done in a minimum of 5 days. You can also apply for all the necessary permits on the website. So who wouldn’t want to start a business in a country like Singapore whose business registration process is so simple and straight-forward?
2. Skilled Workforce
Singapore has the largest population of the skilled workforce. You can also hire workers from outside if a worker does not have the niche skill required for that business. Even though the city-state’s manpower policies have gotten tougher, it is possible to procure the right work visas for the right talent.
3. Growth in Economy
With a lot of foreign investments coming in, Singapore is a growing economy. This is mainly due to the government’s pro-business attitude and various incentives provided to the startups. If your holding company resides in Singapore, then it can benefit from being a part of an economy that is slowly on the rise. This can offer an economic stability that a lot of other nations may not be able to provide and safeguard your company against economic crisis.
4. Attractive Tax Rates
Singapore has the most attractive tax rates in the world. The marginal corporate tax is as low as 17% and with various schemes; the effective tax rate can be further lowered. All this makes Singapore one of the best places to establish your company. The amount of money you save by paying less tax can be reinvested in your company. There are very few places around the world where you can get such taxation benefits.
5. Avoidance of Double Taxation
This perhaps the biggest benefit one can get from setting up their business in Singapore. Since Singapore has signed Avoidance of Double Tax Agreement with over 7- countries, a company can avoid double-taxation in Singapore. And your company can get an edge that it needs to compete on a global platform by avoiding such hefty taxes.
6. Stable Political Environment
The political system of Singapore is stable and offers the investors with a high degree of predictability. The regulations set by the government are rational, pro-business which gives the investors great confidence to excel in the Singapore market.
7. Good Quality of Life
One of the main concerns for anyone looking to set up businesses and relocate to Singapore is the well-being and quality of life for their families. Overall, there is no cause for concern as Singapore provides excellent public and private transport, top quality healthcare, safe and healthy living environment, excellent education and an endless selection of cultural and educational opportunities.
8. Strict Laws on Money Laundering and Tax Evasion
The respective authorities of Singapore do not tolerate corruption and therefore carry out routine investigations in order to detect and resolve the tax evasion and fraud. Investigation activities may include surprise visits to the business premises as well as an examination of accounting records, source documents, and other pertinent records.
9. No Capital Gains Tax
Investors having a Holding Company in Singapore are offered with tax incentives for qualifying funds. These treaties along with low income-tax rates and zero capital gain tax make Singapore very attractive to its investors.
10. Dividends are Exempt from Tax
In an effort to draw investors in the country, dividends paid on or after Jan 1, 2008, by a Singapore resident company are exempted from tax under the one-tier corporate tax system, which means shareholders will not be taxed on income from dividends.
11. Incentives for the Holding Companies
Singapore holding companies can apply for Headquarter Incentive. This type of incentives are given to encourage multi-national companies to locate their regional headquarter to international headquarter in Singapore. Other incentives, such the Pioneer Status or Development and Expansion Incentives are also available.
12. Business Friendly Relationships with Different Countries
Other than all the aforementioned advantages, some additional important non-tax related considerations at the international level should be kept in mind when setting-up a holding company in Singapore. The country has signed over 30 investment guarantee agreements. These agreements are designed to promote greater investment flow between the two countries by providing a legal providing a legal framework that clearly sets out investment norms and protection when investing in the other country.
Now that we have established many benefits of setting up a holding company in Singapore, the next steps are simple and straight-forward, i.e., registering and company incorporation a company in Singapore. If you need a help from an advisor who is based in Singapore and knows about the hustle bustle of the city, we at Business Setup Worldwide are here to help you. Our advisors will take care of all your company registration needs while you give your complete attention to the business. Contact us today!