Singapore is a well-known location in Asia that primarily promotes the ease of doing business in its region. Company incorporation Singapore entities prefer Singapore as a location to establish a business and achieve success. Singapore’s business-friendly and pragmatic tax system are crucial in attracting foreign investors. Not only that, but Singapore, along with Luxembourg and Qatar, is one of the wealthiest countries in the world in terms of economic output per head. So, if you’re looking for a place to invest, Singapore is unquestionably a great place to do so, with a strong emerging economy and a prime location for trade and business such as a holding company.
When it comes to the types of entities that can be formed in Singapore, a Holding Company is one of the most popular business entities preferred by entrepreneurs. A Singapore holding company owns stock in another new company set up known as a subsidiary or a company that owns property such as real estate, patents, stock, and other assets. A holding company’s goal is not to produce goods or services, but rather to own stock, control its subsidiaries, and reduce risks for the owners. This article explains why it is essential to establish a new company set up in Singapore.
Why create a Singapore holding company?
Singapore, as previously said, is one of the richest countries in the world, with a large developing market and a strategic position for trade and investment opportunities. If you are considering investing in Singapore, the benefits mentioned below will help you make your decision. Examine it out.
#1 Convenience of doing business
Over the past 12 years, Singapore has been listed in the top three economies in the World Bank’s Ease of Doing Business rankings. Singapore business formation is comparatively simple as opposed to other developing countries around the world. Company incorporation Singapore process, submission of all relevant documentation, and collection of required documents will all be completed in as little as 5 days. On the website, you can also apply for any of the requisite permits. So, who wouldn’t want to start a new company set up in a country like Singapore, where the business registration process is so simple?
#2 Highly skilled workforce
Company incorporation Singapore process has the most technical workers per capita. If a worker lacks the niche talent needed for that market, you can recruit from outside. Even as the city-labor state’s laws have been more stringent, the best work permits for the right talent can be obtained.
#3 Economic growth
Singapore is a growing economy with a lot of international investment flowing in. This is mostly due to the government’s pro-business stance and the numerous benefits offered to entrepreneurs. If the holding company is based in Singapore, it would benefit from being a part of a growing economy. This will bring economic security that many other countries could not be able to provide, as well as protect the business from economic downturns.
#4 Rational tax rates
Singapore has the world’s most competitive tax rates. The marginal corporate tax rate is as low as 17%, and with different initiatives, the effective tax rate can be reduced even higher. All of this makes Singapore one of the best places to start a company. The money you save from paying less tax can be reinvested in your company incorporation Singapore process. There are only a few places in the world where you can get those tax breaks.
#5 Elimination of double taxation
This is perhaps the most significant advantage of establishing a company in Singapore. A business will escape double taxation in Singapore since Singapore has signed Avoidance of Double Taxation Agreements with over seven countries. And by eliminating such high taxation, the business will gain the competitive advantage it requires on a global scale.
#6 Political environment that is stable
Singapore’s democratic structure is predictable and provides investors with a high level of predictability. The government’s regulations are fair and pro-business, giving investors great faith in their ability to succeed in the Singapore market.
#7 High life quality
The well-being and quality of life for one’s family is one of the most important considerations for someone wanting to start a new company set up or move to Singapore. Overall, there is no need to be concerned because Singapore has outstanding public and private transportation, high-quality hospitals, a clean and stable living atmosphere, excellent education, and an endless array of cultural and educational opportunities.
#8 Strict anti-money laundering and anti-tax evasion laws
Singapore’s respective authorities do not tolerate bribes and instead conduct regular inquiries to track and address tax evasion and fraud. Surprising visits to the company incorporation Singapore premises, as well as an audit of financial books, source documentation, and other relevant records, can be part of the investigation.
#9 There is no capital gains tax
Investors of a Singapore Holding Company are eligible for tax breaks on qualified funds. These treaties, along with low-income tax rates and no capital gains tax, make Singapore quite appealing to investors.
#10 Dividends are tax-free
Dividends paid on or after January 1, 2008, by a Singapore resident corporation are excluded from tax under the one-tier corporate tax scheme, which means shareholders may not be taxed on profits from dividends.
#11 Incentive programs for holding companies
Singapore holding firms are eligible to qualify for the Headquarter Incentive. This form of opportunity is provided to persuade multinational corporations to relocate their foreign headquarters to Singapore’s international headquarters. Other rewards are open, such as Pioneer Status or Development and Expansion Incentives.
#12 Relationships with different countries that are business-friendly
Aside from the above benefits, some additional relevant non-tax-related foreign factors should be kept in mind when establishing a holding company in Singapore. Over 30 investment guarantee agreements have been signed by the government. These agreements are intended to encourage greater investment movement between the two countries by offering a legal mechanism that specifically defines investment standards and safeguards when invested on the other side.
Sum it up
WLP Group is a corporate registry and incorporation firm that takes pleasure in aiding clients in dealing with relevant laws. We provide specialist advice and oversee regulatory and statutory responsibilities to ensure that the new company set up complies with Singapore law as it grows and expands.