Tax planning, by nature, involves effective use of available and legitimate strategies to minimize tax liabilities. This could be done by either deferring your tax or to avoid tax using certain tax-break provisions. Following with several tax crimes in Singapore, including tax evasion on rental income and joss paper company, PIC Fraud from management consultancy business, tax planning is believed to be one mechanism that is of paramount importance for the tax payer in contemporary business context.
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In many businesses and organizations, formal shareholders agreement is commonly put in place, even if it is not a legal requirement to do so. There are many benefits to having one, however. Companies are given the security of knowing that the operations of the business and the responsibilities the shareholders have are already taken into full consideration. Everyone within the organization will therefore understand what is allowed or disallowed and are informed of how decisions within the organization are to be made. This reduces the incident of conflicts that may arise between shareholders that could potentially disrupt operations and hurt the profitability of the business.
Many businesses, however, tend to delay drafting an agreement when they first start a new company. While this is not normally an issue, it makes better business sense to have one in place in the near future as different shareholders are bound to have differing opinions on how businesses should be managed. In addition, circumstances such as the economy can change. Misunderstandings can occur where shareholders disagree over profits sharing; leading to fracturing of the company and unnecessary stress.
At the foundation of every company is built on these stakeholders - Directors. They hold crucial appointments that chart the direction and operation of the company. The longstanding relationship of directors in the company reflects the health of the company’s performance. To pick and appoint the right director can boost the company’s market position or set them back in their efforts. Here is an easy guide to all you need to know about appointment of directors.
Who is a director?
A director is the officer in charge of managing the operations and setting directions for the company. He/she must be objective in decision making, executing his duties with diligence and integrity and act in the best interest of the company.
In any company, the role of directors is always a vital one. Apart from setting direction and making strategic decisions, they carry the heavy responsibility to ensure the company is fulfilling its statutory obligations. Recently, there was a stark increase in directors disqualified for breaches of the Companies Act. This led to authorities stepping up in their regulatory actions against repeat offenders. Once disqualified, the individual is barred from taking directorship or participating in management of any company unless given permission by the High Court or Assignee. They will also be listed on the Accounting and Corporate Regulatory Authority's (ACRA) public register.
The penalty and disqualification being imposed on directors reinforces the importance of directors complying with their statutory obligations.
Effective from 1 Jan 2018, all companies in Singapore are to adopt and implement Financial Reporting Standard 115 (FRS 115) Revenue from Contracts with Customers. Based on the International Financial Reporting Standard 15 (IFRS 15), FRS 115 will bring more clarity in revenue recognition and align to a cohesive standard across more than a hundred countries. Whether you are running/managing a large multinational corporation or a small medium enterprise, FRS 115 will affect the day-to-day operations. It is necessary to equip yourself to ensure a smoother transition in your business.
The core principle of FRS 115 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to for the stated goods or services.
In light of the new FRS 115 revenue recognition standard that takes effect from this year onwards, practically every company, big or small, are affected in their operations and revenue reporting. Still, not everyone may not be familiar with the new standards. in 2017, less than 10% of companies are ready for the FRS 115, while 60% are undecided on approaching these changes. To prepare ourselves for the incoming changes from the new revenue recognition standard, we offer a series of articles to inform you in navigating through these huge changes. This is...the introductory guide to the new revenue recognition standards.
Singapore is well known as a prime location for global businesses looking to expand into Asia. Located right in the middle of robust and booming markets in the region, it has a highly skilled pool of labour ready to be assimilated into any organisations. To attract more businesses and investors, the government has since put forward several incentives, making it easier than ever for entrepreneurs to set up their own companies in the City State.
In Singapore, tax incentives are catered towards organisations engaging in activities that provides value to the country’s economy and technological development. Intellectual Property (IP) activities are therefore regarded as high value activities, strengthening the nation’s innovative capabilities and creating a better business environment. As such, these incentives are offering compelling reasons that continue to put Singapore on the map as a preferred location for setting up IPs.
Singapore remains as the top location of choice for businesses looking to register IP. Strong government support is a huge factor, especially with policies in place to assist entrepreneurs on a quest to turn “ideas into assets”. The nation’s legal system, fierce government support and a collective vision to turn Singapore into a Global IP Hub in Asia by 2020 are all great reasons that provide a pull for potential business owners and companies into the Republic.
That said, assets such as IP can tricky when migrating to “favourable tax jurisdictions ”, especially with governments issuing crackdowns on companies looking to evade tax. In the event that these IPs are undervalued, local governments could potentially issue taxes based on the value of the new assets, even if it has moved abroad to avoid hefty tax charges.
While Singapore will no doubt provide a strong global position and allows companies to operate efficiently, here are 3 essentials to consider for IP Migration into Singapore.
Photo by Victor Garcia
Singapore is internationally known as a safe haven for both local and foreign entrepreneurs looking to set up their businesses. In World Bank’s annual “Doing Business” 2018 report, for instance, the nation is ranked 2ndamongst 190 global economies, miles ahead of other economic powerhouses such as the United Kingdom and the United States of America.
Similarly, international surveys such as the World Economic Forum has also ranked Singapore’s Intellectual Property (IP) laws as one of the best in the world. Large brand names such as Procter and Gamble as well as Mead Johnson have selected Singapore as their preferred location to invest in business and research and development – all of whom have listed strong IP laws as a factor in their decisions.
Here are the top 3 reasons why Singapore is an intellectual property haven.
Photo by Peter Nguyen
In today’s globalised age, all companies will need to constantly innovate to keep their competitive advantage and keep ahead. Any complacency or stagnation would have eliminated them from the race. According to the Global Innovation Index, Singapore ranked 5thmost innovative nation out of 126 economies, ahead of USA & Germany, and top innovative nation in Asia. As such, Singapore is a haven for many Small, Medium Enterprises (SMEs) and Multi-national corporations (MNCs). For companies to stay competitive in Singapore, they will need to innovate. Most importantly, they need to know how to protect their innovative ideas – their intellectual property.