Taxation system

The Singaporean tax system is very interesting for both individuals and companies. International companies are also benefiting, since profits from abroad do not have to be taxed.

Income tax is calculated on the basis of the net profit, which, however, is only applied to income generated in Singapore or income that is transferred to Singapore.
Singapore does not have a double burden on profit distributions (eg dividends). Because these are generally tax-exempt in the country, which is regarded as gate to Asia. There is no capital gains tax in Singapore either.

Further tax cuts were decided by the government in February 2007. The max. uniform income tax rate was therefore reduced to 17% (previously 20%). However, this tax rate is only applied from a yield of SGD 300,000, -. Lower yields are taxed at a lower tax rate. This is shown in the table on the progressive tax burden.

Progressive tax burden

For income up to SGD 10,000, – a tax rate of 4.5% is applied, for income up to SGD 300,000- the tax rate is 9% and from SGD 300,001, – the maximum tax rate of 17% applies.

 

The first 3 years of the company

The first 3 years a company is not taxed. It is tax exempt at this time.
In each case the first SGD 100.00 of profit are also tax-exempt.

Taxation of foreign income

Foreign income is taxed by the country of service provision.

“Non-resident” companies

The companies must be “non-resident” so that the income is tax-exempt. A company is considered non-resident if it has no business in Singapore. The income is neither earned nor transferred to Singapore. (Interesting opportunity for holding and trading companies.

Constitutionally protected banking secrecy

As well as in Lichtenstein and Switzerland, bank secrecy also applies in Singapore. Thus, no customer information may be disclosed without his consent except a criminal act – focus on suspected drug trafficking. Singapore also does not provide assistance in cases of suspected tax evasion.

Singapore Private Limited Company

The private limited company is a limited liability company. However, there is no capital deposit requirement on the liability capital. The minimum capital is SGD 1, -. An exception is, however, if the company wishes to apply for work and residence permits, then a capital of SGD 100.00- must be paid.
To establish a private limited company, the director and the company secretary must be resident in Singapore and have a residence permit. As far as other directors are used, they can also be foreigners.
A registered shareholder and a share certificate, which shares may not have a face value because only registered shares are allowed, must be issued.

 

Special feature of the company name

The company name must be approved by the Accounting & Corporate Regulatory Authority (ACRA).

Accounting and Auditing

In Singapore, there is a book keeping obligation as well as the annual external auditing obligation. It should be noted that the auditor must be resident in Singapore and capable of carrying out his duties. Companies with fewer than 20 shareholders and no legal entities as shareholders, with less than SGD 5,000,000 per annum, are exempt from the annual audit requirement.

 

General Assembly

Legally prescribed are the annual general meetings. This may be waived if all shareholders agree.

 

The key advantages of Singapore are

• - Constitutionally protected banking secrecy
• - Liberal tax system

 

The biggest mistakes when starting a company abroad

Not all topics related to founding a company abroad are always free of prejudices and false information that have prevailed over the years. We give you an overview of the most important questions about founding a company abroad.

Founding a company abroad as a citizen of another country is legal?

Founding a company abroad as a citizen of another country is legal?

Yes, in most countries foreigners can be sole shareholder of a local entity.

Do you have to live in the country where you start a company?

Do you have to live in the country where you start a company?

No you can set up a company anywhere in the world, as long as the country in question allows you, as a foreigner, to acquire shares in local companies. If this is not the case, trustees can be used. Freedom of establishment applies within the European Union. However, it is important that the management takes place locally, in the country in which the company is registered. In addition, a permanent establishment must be set up. Without this, a German tax office will not recognize the company and, in the worst case, would demand back payment of corporate and trade taxes plus late payment penalties. We rent you a real office and set up a permanent establishment that meets all requirements without a doubt. In addition, we have real managing directors who run companies in the home country and are resident there.

Problematic law firms: closure is made more difficult

Problematic law firms: closure is made more difficult

Some law firms tie clients with gag contracts and apply pressure when the client wants to close their business. If you are a client of a law firm that has set up a legally unsound company for you, you make yourself vulnerable to blackmail. Because in the event of a tax problem, law firms without a license are not bound by a duty of confidentiality.

Changing offices is made more difficult

Changing offices is made more difficult

We receive many inquiries from customers who already own a foreign company and are looking for a new law firm. Switching to us is then often made more difficult. So horrendous final bills are made, which have to be paid before a change is possible. Therefore we have developed a trust principle. If you are not satisfied with us and want to switch, you can do so at any time. You will receive the necessary documents (resignation letter) from us in a standardized form after the foundation. This protects you from unexpected costs and you are free to go to another law firm at any time. So far we have not lost a client to another law firm.

Privacy Policy/Office Location

Privacy Policy/Office Location

Your accounting documents are safe with us. In addition, all electronic data is only stored in encrypted form and apart from us, who are bound by professional secrecy, no one has access. All accounting documents are also only stored locally. Neither authorities nor hackers can access this data.

No taxes?

No taxes?

There are certainly locations in the world that do not charge any taxes to companies and private individuals or only charge a very low flat-rate tax. However, this can rarely be used without a corresponding change of residence. If you are resident in Germany, the relevant double taxation agreement is decisive. Providers who promise otherwise will tempt you into tax evasion, which is usually severely punished if discovered. We advise you not to set up companies in countries that have already been blacklisted by the OECD. The foundation is usually very cheap, but the tax consequences in Germany can be devastating. Since the introduction of the automatic exchange of information between almost all major countries, an anonymous account or company no longer exists.