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Doing Business in Singapore for Foreign Enterprises
Known as a top foreign investment destination, Singapore boasts a pro-business regulatory environment. Its attractive corporate tax system, ease of incorporating a business, multiple state financial grants for startups, generous tax incentives, and robust IP protection help make the country an ideal place to do business in the ASEAN region.
Company Incorporation in Singapore
Incorporating a company in Singapore is easy and straightforward. Assuming all requirements are already accomplished, the entire application can take two to four days on average. Applications are conducted online and submitted to the Accounting and Corporate Regulatory Authority’s (ACRA) electronic portal.
Company names are typically approved or rejected within an hour, and depending on the industry you want to engage in, additional requirements may be requested.
Legal Entities in Singapore for Foreign Enterprises
Foreign investors can set up any of the following entities:
- Private Limited Liability (LLC)
- Limited Liability Partnership (LLP)
- Sole Proprietorship
- Limited Partnership
Setup Requirements for Incorporating a Company in Singapore
To successfully incorporate a company in Singapore, you need to fulfill the following:
- Company name duly approved by ACRA
- Resident Director (Singaporean citizen, permanent resident, or holds EntrePass/Dependent’s Pass)
- At least one shareholder
- Resident Company Secretary
- Registered Address
- Paid-up capital of S$1
Corporate Taxation in Singapore
Singapore has a single-tier territorial-based flat-rate corporate income tax system. It has the lowest corporate income tax rate (17%) in the ASEAN region. And its personal tax structure is one of the most competitive in the world with a top marginal resident tax rate of 22%.
Singapore offers generous tax incentives and tax exemptions to small and medium enterprises. After tax exemptions are applied to the taxable income, their effective tax rate will be reduced significantly.
Tax Exemptions in Singapore
Beginning 2020 onwards, newly-incorporated companies can enjoy the following tax exemptions for three consecutive years:
- 75% exemption on the first S$100,000 of normal chargeable income for each of the first three tax filing years if they meet the following requirements:
- incorporated in Singapore
- a tax resident in Singapore
- has no more than 20 shareholders of which at least one is an individual shareholder holding at least 10% of shares
- Further 50% tax exemption on taxable income of up to S$100,000; the taxable income above S$100,000 will be charged at the normal headline corporate tax rate of 17%
Work Visa Processing in Singapore
In general, there are three types of work visa options for all foreign employees:
- Employment Pass (EP) – for foreign professionals, C-level employees (CEOs, managing directors, and general managers), or specialists sponsored by a Singapore-based company
- Work Permit – for foreign laborers and basic-skilled workers who want to work in Singapore’s in-demand industries and are from approved source countries
- S Pass – for foreign mid-level skilled workers sponsored by a Singapore-based company