Company Formation Singapore

Company Formation Singapore

• Tax planning via a network of international tax advisers and attorneys
• Why form a company in a foreign country with a tax accountant specialized in international tax law?
• Basic Considerations regarding the Formation of Companies in „Zero-Tax Havens“ i.e. in countries that have not entered into Double Taxation Agreements with other countries
• Offshore Company Formation: Tax haven rankings
• Examples for the legal reduction of corporate taxes
• DTA permanent establishment concept – Our services and fees
• Parent companies and their subsidiaries in the European Union
• Beware of cheap founders!

Setting Up a Company in Singapore

Setting up company in Singapore: general

Singapore is referred to – and not without good reason – as the “New Switzerland”. This is, above all, because of banking secrecy and the fact that Singapore hardly gives out any information to other countries. On the other hand, Singapore also has a wide network of double-taxation agreements with countries such as Germany, Austria, Denmark, Switzerland, China and Japan. In addition, Singapore is attractive with its low rates of taxation. Certain business activities (offshore financial services) are taxed at a standard rate of 10%. Foreign income is even tax-free. In addition, Singapore supports technolgies in a targeted way through generous investment sponsorship when companies actually set up in business there (EDB: Economic Development Board).

Setting up a comapny in Singapore and taxes

The tax on income from offshore financial businesses is 10%. The top rate of tax on income is 17%, whereby the maximum rate of tax is only reached with an income of 320,000.00 USD:

Setting Up New Companies in Singapore:

• first $100,000: no taxes
• $100,001 to $300,000 : 8.5% tax rate
• thereafter a flat rate of 17%

Companies already present in Singapore:

The basic rate of tax is 4.5%, otherwise there is the same progression as above.

All foreign income is exempted from taxation (exempt company principle). However, the regulations of existing double-taxation agreements do NOT apply to exempt companies/ non-resident companies. Thus if the shielding effect of a DTA is to take effect (such as within the context of the tax collected at source in the case of associated companies) and/or if the existence of business premises abroad for tax purposes is to be defined on the basis of  5 DTA, then the company would have to do business in Singapore. One approach to solving this, in this context, would be the interposition of an EU holding company, insofar as there are associated companies are in the EU.

The banking secrecy of Singapore is firmly anchored in the constitution and one of the supporting pillars of the city state. Requests for legal assistance from other countries fail pathetically, unless evidence is produced that it is money resulting from money laundering or the drugs trade. Facts relating to suspected tax avoidance are not pursued or no information is given to other countries.

Our Services within the Context of Setting Up a Company in Singapore

• setting up of the company in Singapore, entry in the register, apostille, certified translations of the documents establishing the company in the language of the country where the client is domiciled  
• domiciliation of the company, incl. an address for the delivery of mail,telephone, fax
• opening of a business account with a major bank in Singapore
• appointment of a company secretary
• on request: appointment of a trust director (5 DTA: location of the senior management of the business as the location of the business premises for tax purposes, provided that there is no production facility, no facility for the exploitation of mineral resources or any construction work being carried out that will last more than 9 months, in which case the business premises are in Singapore, irrespective of the location of the senior management of the business)

A lawyer who is normally resident in Singapore will act as a trustee, that is only “outwardly”, as a director of the company).

• on request: appointment of a trust shareholder (a domestic or foreign company will act in a trustee role as a shareholder of the company)
• on request: opening of a private account (only in connection with the setting up of the company)
• tax arrangements at associated companies, interposition of an EU holding company  
• arranging a legal firm with tax consultants in Singapore
• when actually relocating business premises: applications for subsidies, application for total exemption from taxation for the first 3 years, help with the search for offices/production sites.

It takes approx. 14 days to set up an INC in Singapore, and 4 weeks to open an account.

The fees depend on the services, please ask about:

Singapore Company Incorporation:

• Name check and reservation
• Preparation of memorandum & articles of the company and other incorporation documents
• Preparation of registration forms
• Professional & filing fees
• E-Certificate of incorporation
• Preparation of compliance corporate kit, including corporate seal, share certificates, register and minutes book
• Minutes of first board meeting
• Resolution to open a bank account

Corporate Secretarial Retainer Service for 1 year:

• ACRA compliance alert & reminders
• Named company secretary registered with ACRA for 12 months
• Maintaining the statutory books, preparation of all relevant minutes for directors’ and shareholders’ meetings.