Advantages of Incorporating a Private Limited Company in Singapore
“Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world’s best talents and greatest ideas”
A properly structured Singapore Company (Pte Ltd/Private Limited) is an excellent, tax efficient corporate conduit, through which international business can be conducted, with the following benefits:
Limited Personal Liability
A Private Limited Company is a legal entity which the business is operated from. This means that it is the company that enters into a business transaction and is responsible for the outcome - not the shareholders and/or company officers. In case of a lawsuit or judgment against your business, no one can seize your personal assets, your home, cash, bank accounts etc. As a shareholder of the company, your exposure to loss is limited to the amount of your issued and paid-up capital in the company.
A Singapore company has an excellent international reputation, and will not be perceived as an ‘Offshore Company’ in a ‘Tax Haven’. It is a legitimate corporate vehicle domiciled in a reputable, politically stable, international trading jurisdiction that has a complex infrastructure and a well-regulated economy.
This ‘above board’ reputation of a Singapore company facilitates hassle-free opening of corporate bank accounts in Singapore, and all over the world. Additionally, Singapore banks offer excellent Letters of Credit (LC) support to Singapore companies engaging in international trading.
Due to Singapore’s prestigious national branding, Singapore companies have a positive and transparent image worldwide – a reputable foundation for promotion of the company to customers, suppliers and investors and opens doors to business alliance opportunities.
An incorporated company has a greater credibility in the eyes of general public than does a sole proprietorship or partnership. Incorporation of a company has the perception that you have long range plans for your business and this would increase your profits and ability to expand.
In Singapore a wealth of tax schemes and incentives are in place to help companies grow their business, such as:
Ease of Entry
In accordance with the Singapore Companies Act, the only requirements to incorporate a Singapore company is that the company has at least one local director (Singaporean Citizen, Permanent Resident or EntrePass Holder) and a local company secretary, of at least 18 years in age without prior bankruptcy record. (Conveniently, the local Director can also double as the company secretary).
The speed in which a company can be incorporated is also very impressive from 24 hours up to 3 weeks if the company has foreign shareholding, and pending on proposed company name availability and reference checks on foreign directors.
Singapore companies (with majority Singapore-based shareholding) are also eligible for a host of various Government grants available for assistance in branding, IT consultancy and systems improvement.
Centralised Location in Asia Region
For the last three decades, Singapore has been at the heart of the Asian economic boom, maintaining a stable and viable economy. Centrally located, with a harmonious blend of cultures, Singapore is the ideal place for foreigners to forge a foothold in Asia and form a bridge between the east and west.
Logistically, Singapore is also one of the best locations for regional business travel, with Changi Airport renowned worldwide for its efficiency and frequency of flights.
Transparent Compliance Requirements
Annual accounts must be prepared and submitted to the Inland Revenue Authority of Singapore, and the Accounting and Corporate Regulatory Authority (ACRA), within 18 months from incorporation, and subsequently every 12 months.
However, professional fees for the preparation of these accounts are proportionate to the income of the company, with some companies being eligible for audit exemption.
Specifically, if a Singapore company’s turnover is less than S$5 million, the company will not be subject to annual audit (providing that the company is an exempt private limited company, and that no member with 5% or more shareholding requests for an audit). Rather, the company is required to prepare a set of accounts, lodged annually, in accordance with the Singapore Financial Reporting Standards (FRS), the professional fees for FRS being significantly lower than an audit.