Singapore is a city-state that has an important role as a global business hub. Stability, good business policy, easy company formation, and low taxes are the main reasons why Singapore is an attractive business destination. Foreign companies, as well as investors in Asia, find it convenient to open their headquarters or business here, making Singapore a well-known business and trading center that also enjoys a good location in Asia. Below, we highlight some of the main reasons why investors choose to open a company in Singapore and why they often prefer this business destination to others in the same region.
Openness towards foreign investments
Singapore offers a set of business advantages, which combined offer a very attractive regime for foreign investors. The pro-business policies and openness towards foreign investments attract a large number of entrepreneurs and determined many large international companies to open headquarters here. Some of the top advantages of investing in Singapore include the following:
- low taxation regime: Singapore has a low taxation regime, a feature that makes it a competitive location for opening a business in the region.
- ease of doing business: there are no limitations on foreign company ownership in Singapore and there are no minimum share capital requirements; investors find it very easy to start a new business as the company formation process is a straightforward one.
- economic stability: the city-state offers a stable political environment as well as encourages innovative businesses.
Singapore’s attractive taxation regime
Investors can often find themselves choosing between starting a company in Hong Kong or one in Singapore as both cities are financial centers in Asia and are competing for the number one investment destination. While both have their advantages, some of which are similar such as the low-tax regime, Singapore does have a standard corporate tax rate that applies differently to the chargeable income: the standard rate is 17%, however, 75% of the first 10,000 SGD and 50% of the next 290,000 SGD are exempt from tax. As a comparison, Hong Kong does not offer this exemption, instead, it imposes a standard corporate income tax rate of 16.5% and 15% for unincorporated businesses. What’s more, Singapore does not impose a capital gains tax, no payroll tax and no withholding taxes on dividends.
Although not a tax haven in the traditional sense of the word, and while not having the same taxation and confidentiality regime applicable to companies in Belize, for example, Singapore remains one of the top locations for starting a business because of the low taxes and the generally advantageous business regime.
Foreign investors who wish to open a business here can reach out to a team of experts in opening companies in Singapore.