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Looking to incorporate in Asia? Singapore is a good choice.

Historically, Singapore has always been an international business hub. From its days as a British trading port in the 1800s to its more recent history as the gateway to the Asia Pacific, Singapore has often been dubbed a strategic choice for global trade.

Singapore is continuously ranked as one of the top countries for ease of doing business and offers businesses plenty of incentives and benefits for incorporating.

More recently, we’ve seen large global companies use Singapore as their launchpad for Asia Pacific expansion.

This year saw the US ride-hailing giant Uber settle into Singapore, joining already established Airbnb. Additionally, job and recruitment site Glassdoor announced it will enter the market, though they aren’t yet clear on an exact date.

Glassdoor told Tech in Asia that the move was “inevitable” saying that Singapore is a front-runner for a regional hub. Uber agrees that a move into the area offers a lot of benefits.

“This is an amazing talent hub for us, both in terms of people who are already part of the team, and our ability to attract and export talent across the region,” Amy Kunrojpanya, Asia-Pacific senior director of policy and communications at Uber, shared at a media briefing.

In an article for the Business Times, DBS senior economist Irvin Seah shared that, “Singapore is a “natural destination” for tech-driven firms to scale regionally, given the country’s reputation as a hub for multinational corporations.” He expects the number’ foreign unicorns’ setting up regional headquarters there to grow.

But it’s not just big corporations utilising the benefits of Singapore, and the country’s attractiveness goes far beyond talent.

“We get a lot of companies talking to us about if they were going to set up in Asia which country should they go to,” says Duncan Macintosh, one of ShieldGeo’s co-founders.

“I always say Singapore,” he says.

Daniel Spencer from corporate secretary company, Sleek, agrees the move to Singapore is extremely popular.

“Every month we’re incorporating about 100 new companies coming to Singapore,” he says.

Singapore as a gateway to the Asian market

Singapore has become an international choice for many businesses looking to expand their reach in the Asian market.

Logistically, it makes sense because of the ease and efficiency offered through Singapore’s Changi Airport.

“Singapore is great in that it’s very connected,” Daniel says.  “There are more than 400 direct flights to Changi Airport, and you have a 7-hour radius to half the worlds population.”

Duncan agrees, “Singapore is a lot more affordable, the timezone is easier to manage, and it’s easier to get to when comparing to Australia or other APAC countries.”

Singapore also has an established expat community, world-class telecommunication infrastructure and lightning fast internet speeds. It’s been ranked the #1 city in Asia for quality of life, making it a desirable location for Western transfers.

By establishing in Singapore you’re also gaining access to the nearby emerging Asian markets.

“Relationships are very important in Asia,” Daniel says. “It’s very important in terms of relationship building to show that you’re committed to the ground.”

While settling in Singapore doesn’t grant employment rights in surrounding countries as it does in Europe, Singapore still acts as a good base for doing business in the area.

“I speak to quite a few clients that are setting up in Singapore, putting together a team and then that team is selling the product or service around Asia [without] actually putting footprints in these other countries,” Duncan says.

This scenario allows businesses to reap the benefits of establishing in Singapore while also gaining proximity and developing relationships with the Asian market.

Why incorporate in Singapore ?

Singapore’s government is very supportive of startups and entrepreneurs offering a range of incentives and benefits to new businesses. 

Tax

One significant incentive for businesses to establish themselves in Singapore is tax benefits. The Singaporean government has set up several tax incentives to encourage and attract entrepreneurs and businesses.

Some of the key tax benefits include tax-exempted profits for the first S$100,000 earned in Singapore in the first three years, no tax on foreign earnings and double taxation avoidance agreements (DTA) with over 50 countries.

 “[Entrepreneurs are] coming to Singapore and living here because you can get a work visa quite easily as an entrepreneur, the tax is quite good, and there are exemptions on tax for new companies,” Daniel says. “It’s a great place to be when you’re developing your own ideas and your trialling something.

Equally, investment companies benefit from no tax on dividends.

“Singapore’s a great place to [set up investment companies or SPVs] because there’s no tax on dividends. If you’re pulling money out of that business, you’re not getting taxed,” Daniel says.

On top of this, “if you sell the company there’s no capital gains tax, and if you’re a director of a company living in Singapore, personal tax is very low and its scaling,” Daniel says.

Business-friendly policies in Singapore

The tax system isn’t the only area set up to help businesses get off the ground. Corporate regulations in Singapore are simple and straight forward which makes compliance far more straightforward than other countries.

If a startup qualifies for a small business, they are not required to be audited every year.

“What that means is, you have less running costs every year as a business,” Daniel says.

The Singapore government allows foreigners to own 100% of the stock of a company incorporated in Singapore, without the need to have local partners or shareholders and there are no restrictions on capital movement into or out of Singapore.

Additionally, if your business falls within specific economic sectors, the government also subsidises labour costs for your new business.

Access to resources

In addition to Singapore’s robust and open economy, the country is known for being a supportive environment for business growth.

The Singapore government has set up several grants, funding avenues and schemes to help new businesses. Many of which become available simply by incorporating. The country is also a hub for accelerators, incubators and VC funds, meaning there are several methods to access capital.

Ease of set up

Setting up a company in Singapore is relatively easy compared to many other countries.

“There’s only four things you need to have a company in Singapore – you need to have a local director, a corporate secretary, a local address and a shareholder,” Daniels says.

With companies like Sleek, these steps are even easier.

“We offer all of those except the shareholder – the shareholder is obviously the owner of the business.

So if you pick a local director (which is one of our colleagues) they act as a nominee director – that’s $1500, a secretary is $800 a local address is $300. So for $2600 you can have a company in Singapore.”

It’s also relatively easy to set up bank accounts in Singapore, which are obviously critical to running a business.

“A lot of countries make it very difficult to get bank accounts (Hong Kong is one of them), we met with a very large company last week which set up a company in Hong Kong 8 months ago, and they still haven’t managed to get a bank account,” Daniel says.

Do you have to incorporate to reap the benefits?

Deciding whether or not to incorporate will always be a case by case situation. It largely depends on what you want to do in the country.

If your goals are to expand into the wider region, Singapore is a good choice to set up base. It has a number of business benefits, mentioned in this article, and grants easier access to the surrounding region.

“If they’re wanting to expand to Singapore then definitely incorporate,” Duncan says. “But if they want to employ Jo Blogs because he’s amazing at coding then that’s a different story.”

Despite the relative ease of incorporating in Singapore, hiring someone internationally for talent reasons doesn’t require full incorporation. Utilising a third-party GEO solution is lower risk, lower cost and generally easier option.

It’s also worth noting that you don’t have to incorporate everywhere. If your aim to enter Singapore is to then expand into other Asian markets you may consider a hybrid approach.

“Then it just comes down to a question of – do they incorporate there or do they use a service like ours – generally it’s both,” Duncan says.

Of all the countries in Asia, Singapore is a top contender to incorporate for many of the reasons we’ve listed in this article. Comparatively, other countries in Asia are difficult to incorporate in and have a number of barriers to entry. In this case, it may make sense to use Singapore as your base and use a GEO service to hire multiple people in the surrounding countries you wish to do business.

– Bree Caggiati

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