Singapore – International Business Corporation (IBC)
Singapore International Business Corporation
Offshore financial centers are coming under strict scrutiny because of the regulatory pressures exerted by organizations such as OECD. In the present scenario Singapore with a strong reputation as an international financial center offers a tax system that is equally attractive to resident and non resident companies alike. Singapore’s status and reputation as a trusted and responsible business and financial hub committed to the international efforts to combat cross-border tax evasion, is attracting high net-worth individuals and companies who seek unsullied image along with effective tax management. Singapore Company, if properly-structured is an attractive, tax-efficient corporate structure to conduct international business. Certain inherent provisions make a Singapore resident company an attractive entity for holding foreign investments. Similarly a non-resident company is not subject to Singapore income tax on foreign sourced income if it is not received in Singapore. Therefore non-resident companies are also an attractive vehicle as international holding or trading companies
Features of Singapore Company
Ø Minimum paid-up capital of just S$1 and allows 100% foreign ownership
Ø Minimum 1 shareholder is required and corporate shareholders are allowed, the details of shareholders appear on public register, however nominee shareholders are allowed. Nationality of the Shareholder does not matter.
Ø Minimum of one director and need at least one Singapore resident director. Corporate directors are not permitted. The details of directors appear on public register
Ø Details of beneficial owners are publicly accessible
Ø A natural person must be appointed as company secretary who can also act as a director, but in the case of sole director the same person cannot serve as company secretary and director.
Ø Must file annual accounts
Ø For companies with an annual turnover exceeding S$ 5 million, annual audited accounts are required to be filed with the Registrar. The accounts are required to be audited by Singapore auditors. For companies with an annual turnover less than S$ 5 million, annual accounts need to be filed but there is no auditing requirement.
Ø Must conduct Annual General meeting
Ø A registered office in Singapore is required
Merits of Singapore Company
Ø A Singapore company is resident and domiciled in a country with a highly regarded international reputation
Ø Singapore has political stability, sound economic and financial fundamentals, and reasonably comparable client confidentiality standards of other offshore jurisdiction
Ø No restriction on the free entry and repatriation of funds
Ø Foreign sourced income which is earned and retained outside Singapore is not taxed in Singapore.
Ø Singapore follows a territorial tax system whereby tax is levied only on incomes sourced in Singapore or received in Singapore
Ø Subject to certain conditions a Singapore company can enjoy tax exemption from its foreign-sourced dividends, foreign branch profits, and foreign-sourced service income that is remitted into Singapore
Ø Singapore follows a single-tier tax system whereby the dividends in the hands of shareholders are not taxed
Ø No tax on capital gains
Ø Attractive tax rate of just 17% and with the available incentive schemes and exemptions effective tax rate is as low as 8.5% for new startups and for small and medium sized companies
Ø Singapore has over 58 Double Taxation Treaties, Singapore resident companies can access the benefits of DTA
Limitations
Ø Redomicilation is not permitted
Ø Details of company members and directors is available on public registry