Singapore's strategic location at the southern tip of the Malaysian peninsula has ensured its importance, which is greater than its size might seem to justify. Singapore consists of the island of Singapore and some 63 islets within its territorial waters.

Fiscal Advantages

• Fair & reasonable transfer pricing rules
• International sales may be exempt legally
• Resident companies under net profit of US$ 125,000 are exempt from tax
• Double taxation treaties signed with about 78 countries
• A person who is a tax resident in Singapore is taxed on all assessable income, less personal deductions
• Singapore does not impose tax on capital gains

Regulatory Advantages

• Formation of a company can vary between 1 to 2 weeks
• Resident shareholders are not mandatory
• Minimum number of directors for an LLC and an Offshore business is one

Limitations

• Resident companies with profit above US$ 125,000 are levied with 17% corporate income tax
• Financial statements of the company must be submitted to the Inland Revenue Authority of Singapore (IRAS)
• Foreign employees can only be hired if it is proven by the company, there is an absence of such a talent within their country
• A resident director is required

• Sole Proprietorship
• Partnership
• Limited Liability Partnership
• Company

Sole Proprietorship 

The business income earned by a sole-proprietor will be assessed in the sole-proprietor’s name. The total income after offsetting any trade loss brought forward and donations will be his assessable income.

Partnership

The share of divisible profit / loss from the partnership will be assessed under the partners’ names and each partner will be taxed accordingly. Where the partner is an individual, his share of income from the partnership will be taxed at his personal income tax rate. Where a partner is a company, its share of income from the partnership will be taxed at the corporate tax rate.

Limited Liability Partnership

In a limited liability partnership, each partner will be taxed on his or its share of income from the LLP. Where the partner is an individual, his share of income from the LLP will be taxed at his personal income tax rate. Where a partner is a company, its share of income from the LLP will be taxed at the corporate tax rate.

Company

For income tax purposes, a company is taxed in its own name.

A business entity is incorporated or registered under the Companies Act or any law, in force, in Singapore with the words “Pte Ltd” or “Ltd” as part of its name; or, a foreign company is registered in Singapore such as a branch of a foreign company; or, a foreign company incorporated or registered outside Singapore. (A company does not include sole-proprietorship and partnership businesses registered in or outside Singapore) 

The Companies Act requires a foreign company to appoint two local agents from Singapore to act on behalf of the company. The agents must be “ordinarily resident” (the usual place of stay of a person) in Singapore. 

For ACRA’s purposes, if a person can provide a local residential address and prove that he is staying in Singapore on a long-term arrangement (i.e. legally remain in Singapore for a long period), ACRA may accept that he is ordinarily resident here.

Processing Time
Company registration procedure in Singapore is fully computerised by the Singapore Registrar of Companies. As a result, the Singapore incorporation process is quick and efficient without any bureaucratic red tape involved. Under normal circumstances, the company can be incorporated in 1-2 days. 

There are two distinct steps involved in the Singapore company setup procedure:

a) Company Name Approval and
b) Company Registration

Both steps can be accomplished on the same day assuming that there are no delays caused by Company Registrar. A foreign company is usually incorporated within 15 minutes after the registration fee is paid. 

However, it may take between 14 days to 2 months if the application needs to be referred to other authorities for approval or review.

• Company name
• Brief description of business activities
• Shareholders particulars
• Directors particulars
• Registered address
• Company secretary particulars
• Memorandum and Articles of association (MAA). Singapore Company Registrar provides a standard MAA document that is suitable for most instances

A company, regardless of whether it is a local or a foreign company, is generally taxed on its:

• Income accruing in or derived from Singapore; or
• Income received in Singapore from outside Singapore

Staying in Singapore for,

The standard corporate tax rate is 17%.

However, 75% of the first (Singapore Dollar) SGD 10,000 of chargeable income and 50% of the next SGD 290,000 of chargeable income are exempt. 

A private exempt company may be exempt from tax on the first SGD 10,000 and on 50% of the next SGD 200,000 of chargeable income. 

Income for its first three consecutive years of assessment beginning on or after year of assessment 2005, are subject to certain conditions.

Relief from double taxation is granted on income derived from professional, consultancy and other services rendered in countries that do not have double tax treaties with Singapore. Double tax relief is also available for foreign taxes levied on income taxed in Singapore, if Singapore has a tax treaty with the country concerned and if the individual is resident in Singapore for tax purposes.

To start a business in Singapore, one must register with Accounting & Corporate Regulatory Authority (ACRA) except for those who come under the list of exempted categories under Section 4 of the Business Registration Act, Cap. 32. 

A foreign company that wants to set up a branch for its business in Singapore will need to appoint two local agents to act on its behalf. These agents must be Singapore residents, that is, either citizens or permanent residents, or foreigners with employment or dependent passes.