Company Formation - Singapore as an offshore

Company Formation - Singapore as an offshore

Setting up Singapore as an offshore company – A preferred choice as an offshore company and a Gateway to Asia

Reasons for using Singapore Singapore is a city state located at the southern tip of the Malaysian Peninsular with a population of approximately 5.6 million and Singapore Government has projected to have 6.9 million populations in next two decades.

Once a British colony, Singapore still retains close links with the British Crown, Common Wealth Countries and enjoys a legal system based on that of the English common law. English remains the main language of administration and commerce.

Its work force is well educated and hard working with a high level of expertise consisting of both local and foreign employees. Singapore is one of the leading international financial centres in the region with most of the major banks present along with numerous financial institutions, investment management companies and accounting and legal firms, which provides high standard of incorporation and business support services.

The World Bank’s ‘Doing Business 2010’ study has also recently concluded that Singapore is the best country in which to run a business. Incorporating a company in Singapore can provide a tax efficient corporate structure in order to conduct international business. Singapore is seen as a respectable jurisdiction with a sophisticated banking and trading centre.

Singapore is regarded as a major centre for business, transportation hub and trade within South East Asia region and has a highly regarded international reputation and not traditionally perceived as an offshore haven. Singapore is on the OECD White List, this identifies Singapore as a transparent offshore jurisdiction.

By keeping corporate tax rates competitive, Singapore continues to attract a good share of foreign investment.

Singapore provides the following advantages:

  • Singapore has a simple and business friendly tax system.
  • Singapore’s tax system is territorial based and thus income sourced from outside of Singapore is not taxable in Singapore, subject to certain conditions.
  • Dividends payments by a Singapore company are not taxable to the recipient. In addition, Singapore does not impose withholding tax on dividends.
  • There is no capital gains tax regime in Singapore. Singapore income tax is imposed on the gain on disposal of shares/investments if the gain is regarded as a revenue gain sourced in Singapore.
  • Extensive double tax agreement with more than 60 countries.
  • Singapore has extensive tax incentive schemes to companies, which can be tapped by businesses keen to invest in Singapore.
  • No restriction of foreign ownership.
  • Good legal system (the Singapore legal structure comprises the Legislature, Executive and Judiciary).
  • No restriction on the free entry and repatriation of funds.
  • There is no exchange controls.
  • Singapore Financial Report Standards and Auditing Standard are in line with International Accounting and Auditing Standards.

For more detail refer to Why Singapore

Singapore a preferred choice as an offshore location for the following purpose:

  • Locating holding companies for outbound investment, notably for entry into Asia.
  • To access foreign market by obtaining control of another company in that foreign market as opposed to merger or consolidation.
  • To isolate business units, as the holding company and its subsidiaries are regarded as two separate businesses, to facilitate future disposal.
  • To defer taxation in the jurisdiction of the ultimate parent company on the dividend income not declared by the holding company.
  • To manage tax exposure on capital gains arising from a disposal of a particular asset.
  • To reduce or eliminate withholding tax on the repatriation of profits.
  • For Asset protection purposes such as intellectual property or real estate investments.
  • To facilitate International trade of goods by utilising Singapore’s excellent transportation network or re-invoicing purpose.
  • Registering an offshore company can legally minimise the tax obligations of a business and this is often the primary reason for incorporating a business offshore and making use of Double Tax Agreements.
  • International services and cross border consultancy services. Example person working overseas such as a consultant may set up an offshore company to minimise tax exposure. The individual (like consultants, designers, authors, entertainers, etc) receives a fixed consulting fee in the country of employment, with the balance accumulated offshore.
  • For confidentiality purpose, most offshore financial jurisdictions do allow use of nominee directors and shareholders and will not reveal information or the details of actual directors and shareholders to any third party unless criminal or terrorist activities are suspected.
  • For offshore financing and others.

The above is for general information only. For detailed information, kindly seek professional tax advice in order to understand the preferred / beneficial structure and available tax incentives.

Our tax consultants will be happy to have enquiries from those wanting to set up companies in Singapore and seeking tax advice. You need to provide our consultants proposed business structure, brief write up of your business model and objectives to us for our tax consultants understanding and assessments. Once they have made the assessments, a quotation for the tax advice will be provided for your review and approval.


Know your client policy

The following documents are required in order to fulfill our Know Your Client (KYC) obligations:

  • Copy of Passport
  • Residential Address Proof (in the form of a utility bill, bank statement etc not older than 3 months)
  • A referral letter from professional firm (case by case basis)

We can provide you all the related and relevant services (including those listed below) to set up and operate your company – do refer to our incorporation services and fees for more information.

  • Notarisation and legislation of corporate documents
  • Assistance in the opening and operation of offshore bank accounts
  • Arranging commercial agreements, consultancy and employment contracts
  • Arranging for the endowment of legal and taxation advice and opinions
  • Arranging for the endowment of legal and taxation advice and opinions
  • Goods & Services Tax, registration and related services
  • Transfer pricing consulting