October 21, 2013 | Valerie Wong
Many foreign businessmen are attracted to Singapore due to the country's low corporate taxes and highly developed infrastructure, which rivals that of many European nations. But before you consider setting up a business there, you should be aware of some unique attributes that the country has to offer for foreign investors. There are some positive elements, as well as a few negative ones.
Perhaps the biggest advantage of Singapore, when compared to other countries in the region, is stability. The local government has been very stable and the country is one of the least corrupt in the world. Procedures and regulations related to business are uniform and applied to everyone fairly. You won't have to deal with officials requesting “gifts” just so they can do their job.
As the country is doing everything possible to attract foreign investment, the procedures to start a business are pretty straightforward and relatively easy to navigate, even for a foreigner who has never set foot in the country before. You won't experience undue bureaucratic delays or have to submit mountains of documents that sometimes get “lost” by officials. Most of the business registration process can actually be done electronically, right from your computer.
As the legal system is fair and unbiased, doing business in Singapore is much safer than in other Asian countries. If you make arrangements, such as contracts, you can be sure that they will be enforced. In the rare event that a dispute should arise, it will be settled fairly by a legal system that is free from corruption.
Nearly everyone in the country's business sector speaks English and all legal documents will be drafted in that language. This means that you won't have to go through the trouble of hiring translators or take risks signing documents that you don't fully understand.
Finally, corporate taxes are quite low, especially if you compare them to the United States. In Singapore, the maximum tax rate on corporations is 17%, while in the USA, corporate taxes can reach 35% in come cases. No taxes are assessed on yearly turnover that is lower than $30,000. This is excellent news for small businesses. Larger enterprises, especially if they hire local workers, can benefit from various tax credits and deductions.
But there are a few downsides to conducting business in Singapore too. The main one would be the high cost of physical overhead. As you probably know, Singapore is a very small country, which makes land a relatively scarce resource. Renting an office, buying a building of any kind and even renting a small retail location is going to cost you a lot more than in the surrounding countries.
If you conduct business in Singapore, you will also need to have good knowledge about the local labor pool. While there is no shortage of highly skilled, experienced and educated individuals that are willing to work in fields such as engineering and finance, hiring people for other, “less prestigious” industries such as retail shops and tourism establishments is a bit trickier. While Singapore allow entry of some foreign workers for low-skill positions, there is a quota system in place and worker levies are imposed, which raises the costs of hiring workers.
If after reading this, you believe that a Singapore business will be the right choice for your needs, you can take the next step and proceed with registration. A company in Singapore can be 100% foreign owned, minimum paid-up capital requirements are of only $1, plus the whole process takes only a couple of days to complete if you have all the documents in order. For those thinking of registering a Singapore company, Serpcorp can help