A Guide For Offshore Companies in Singapore
We are living in one of the most uncertain times in modern history. However, even in these economically uncertain times, there are countries that are still financially stable. Singapore is one of those countries. Today, Singapore is one of the most economically stable countries in the world. The laws in Singapore are very business-friendly which makes it very easy to incorporate a company in Singapore. Many foreign businessmen and entrepreneurs immigrate to Singapore every year to start setting up a local company or a branch office.
Singapore ranks 2nd in Global Ease of Doing Business Index. This is why many entrepreneurs from all over the world are keen to set up an offshore company in Singapore. Offshore companies are quite common in Singapore, and are often the choice for businessmen who mainly have foreign investors but still seek to register a private limited company in Singapore.
To understand the reason and benefits of starting an offshore company in Singapore, we should first understand what an offshore company is.
What Is An Offshore Company?
An offshore company is one which is registered in a jurisdiction different to where the company’s main investors live. The jurisdiction of the offshore company is different from that of the company’s main business operations. It is very different from the usual process of setting up a local company, where main business operations are done in Singapore. Now that you know what offshore companies are let’s dwell into their legal status.
The Legality Of Offshore Companies
Following the Panama Leaks, a misconception about offshore companies engulfed the world. People started to think that offshore companies were illegal and considered safe havens for money launderers. This is true that criminals and corrupt politicians have been using offshore companies for their fraudulent and illegal activities like money laundering.
However, offshore companies as a whole aren’t illegal. In fact, these offshore companies let you enjoy economic benefits that you would have never enjoyed in your company’s main jurisdiction. If setting up a local company is not possible for you due to administrative or other issues, setting up an offshore company in Singapore will be your next best choice.
Setting Up An Offshore Company In Singapore
Setting up an offshore company in Singapore may be easier than in many other regions in the world but there are still some rules and regulations you need to follow. It is similar to the process to incorporate a company in Singapore, but there are extra requirements that need to be fulfilled. This guide will cover most of the important information you need to incorporate a company in Singapore.
The business should at least have one resident director and company secretary. These staff members need to be a Singapore resident.
Offshore companies will have to submit tax returns and annual financial statements to the relevant authority (IRAS) in Singapore.
The business should have a registered offshore business address in Singapore.
Cost of Incorporation and Operation
Businesses looking to incorporate an offshore company in Singapore will be naturally subjected to certain costs. The incorporation cost for an offshore company in Singapore is around $2000. The yearly cost after the first year is $600. Overall, offshore companies will have to spend thousands of dollars in order to incorporate and manage different aspects of their business in Singapore.
Steps To Incorporating An Offshore Company In Singapore
The first thing to keep in mind while incorporating an offshore company in Singapore is that resident individuals who have a valid SingPass account can register an offshore business in Singapore. This is why it is important for businesses to contact a local company incorporation firm to help with the process to register a private limited company in Singapore, or incorporate a company.
Having a local consultant firm on your side makes things very easy for businesses looking to incorporate a company in Singapore. However you can also incorporate your offshore company online as well. There are two main steps in incorporating an offshore company in Singapore;
- Approval of company name
- Submission of incorporation documents
Once you are done with the above steps, the incorporation process will be completed within 1 to 2 days.
Benefits Of Incorporating An Offshore Company In Singapore
Low Tax Rates
Singapore has one of the lowest income and corporate tax rates in the world. This can be a great start for entrepreneurs looking to invest their money in the respective region. Whether you are looking to set up a limited liability firm or register a private limited company in Singapore, you can do both easily here. A brand office or a subsidiary company can also be registered in Singapore.
All business units and offices working in Singapore will be subjected to business friendly Singaporean tax laws.
Singapore is one of the few regions in the world that are politically stable (even in these uncertain times). Political stability plays a huge role in the economic development of Singapore. Incorporating an offshore business in Singapore will mean that your business will not have to face any risk of loss due to political instability in the respective region.
Ease Of Doing Business
Singapore ranks 2nd on the Ease Of Doing Business Index. This is a great statistic to note if you are looking to incorporate a company in Singapore. However, you should keep in mind that there will still be many different aspects of the offshore business you have to consider. Nothing should be taken lightly. The laws and regulations might be more lenient than many other regions in the world, but you have to meticulously follow the laws and regulations laid out by the local government.
Strong Banking Setup
Singapore has a great banking setup which means your offshore company can be supported by one of the world’s most amazing banking systems. The strong banking system will also give credibility to your business. A good banking system ensures that no fraudulent activities can be conducted easily and because of this the reputation and trustworthiness of your business will be greatly improved.
Offshore companies in Singapore have to register and get approved through respective government authorities. The offshore business has to abide by the laws laid down by the Singaporean Government. There are certain regions in the world where offshore companies can be started to avoid taxes in their main jurisdiction.
That is certainly not the case in Singapore. In Singapore the offshore companies have to abide by the local taxation laws. This is why offshore companies in Singapore are considered to be very credible.
If you are looking to incorporate an offshore company in Singapore, then this guide will help you familiarise yourself with all the basics. Singapore is an ideal place for registering an offshore company as it can be very beneficial for you and your business. For foreign businessmen seeking to incorporate a company in Singapore, you will need to engage a third party firm specialising in company incorporation Singapore to assist you in the process.
Not only do these firms have the most updated and in-depth knowledge of the procedure to register a private limited company in Singapore, but they will be able to provide you with good advice about the administrative steps in setting up a local company.
Some companies even provide additional services such as payroll management and tax filing, which are key HR roles that are not easily fulfilled by newly set up companies in Singapore. Contact us today for a Free Singapore Company Registration consultation!