More and more entrepreneurs, corporations and ventures of all sizes across the world are incorporating their business in Singapore. Why is this so? What makes a small island such an attractive jurisdiction? Here are the top 5 reasons why Singapore is a popular choice to incorporate.
A rational tax system with low tax rates
Singapore has one of the world’s simplest and most rational tax system. It uses a single-tier tax system on capital gains or dividends received from a business. This system is attractive to entrepreneurs who want to incorporate and start a new business. The corporate tax rate in Singapore is a flat 17%, with tax exemptions for new start-ups.
Similarly, personal income tax rate is progressive from 0%-22% for a Singaporean resident and a flat rate of 15% of whichever is higher for a non-Singaporean tax resident.
Top financial hub in Asia and worldwide
Singapore is a major financial hub in Asia Pacific region, with a solid reputation as one of the world’s most vibrant financial centres. It has 131 commercial banks, 787 fund managers and 852 capital markets services license holders. With the fourth largest forex trading centre, the Singapore Exchange (SGX), Singapore is a hub for wealth management and investments in Asia.
As a result, businesses that incorporate in Singapore have easy access to a suite of private and commercial banking services to fund the expansion of their business with attractive rates as low as 1% per annum.
Strategic geographical location
Located in the heart of Southeast Asia with close proximity to surrounding emerging markets, Singapore is home to the world’s top players across all industries. Some of the most important economies in the world (China, India, Malaysia, Australia) are a short plane ride away. The port of Singapore is one of the busiest globally and it is classified as a major International Maritime Centre. Changi Airport is a world class airport which caters to approximately 68.3 million passengers in 2019 and provides convenient flights to nearly every major city in the world.
Stable political and economic climate
Singapore is renowned for its friendly business policies. According to The World Bank, Singapore is ranked 2nd in the world for doing business amongst 189 countries. It is ranked 1st in enforcing contracts and 4th in starting up a business. The Singapore government adopts pro-growth and innovation-friendly policies. It provides many grants, tax incentives and in-kind assistance schemes to businesses in needs. Within certain preferred sectors, the government also subsidizes the labour costs of a new business. These benefits are available to local as well as foreign-owned businesses.
Well-trained and productive workforce
With a top-notch education system, students in Singapore have always scored outstanding results on global comparative standards. Singaporeans are known to be hardworking, productive, highly educated and law-abiding who will eventually become part of Singapore’s workforce and bring excellence to their work. Apart from that, Singapore’s liberal immigration policy brings global talents around the world to the country. In addition, it is easy for a foreign professional to obtain and maintain work visas or permanent residence (PR) status in Singapore as nearly a third of its workforce comprises of foreign talents and workers.
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Singapore Corporate Tax Rate (2020),
Singapore Individual Tax Rate (2020), https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/
Number of Commercial Banks (2019),
Number of Fund Managers (2018),
Number of Capital Markets Services licensees (2020),
Number of passengers caters by Changi Airport (2019),
Singapore is ranked 2nd in the world overall for doing business (2019),