In 2024, Singapore remains a leading destination for businesses about to leverage the opportunities and potential of the blooming Asian market. Businesses that want to thrive and grow will undoubtedly find the local low corporate tax rate, stable political climate, and efficient IP protection highly appealing. In this context, you shouldn’t brush aside the fact that the city-state also has a skilled workforce and a simple yet fast company registration process that is easy to master especially if you are supported by a professional corporate service provider like International Wealth.
If you are thinking of starting or expanding your business in 2024, here are some compelling reasons why you should consider registering a company in Singapore.
Lower corporate tax rate
One of the main attractions of Singapore for businesses is its friendly corporate tax regime. The headline corporate tax rate is currently 17%, which is lower than many other developed countries in the region, including Japan (30.62%), South Korea (27.5%), and China (25%). Startups, small and medium enterprises (SMEs), and innovation-driven business founders will be happy to learn about various tax exemptions and incentives that Singapore has in store for them.
For example, for the first three years of assessment, newly incorporated companies that meet certain criteria enjoy a 75% exemption on the first SGD 100,000 of normal chargeable income and a further 50% exemption on the next SGD 100,000. This means that a qualifying company will pay as little as a 4.25% effective tax rate on the first SGD 200,000 it earns.
Don’t forget that Singapore has an extensive network of over 80 double taxation agreements (DTAs). These were made with other states to reduce or eliminate the withholding tax on dividends, interest, and royalties paid to or from Singapore. The fact that the jurisdiction does not impose any capital gains or dividend tax makes it an attractive destination for investors and entrepreneurs alike.
Stable political climate
Another reason why Singapore is a preferred choice for businesses is its stable political system. Singapore has a parliamentary republic form of government, with a multi-party system and a dominant ruling party. The government is known for its pro-business policies, transparency, and low corruption. According to the World Bank, Singapore ranks first among 190 economies for the ease of doing business. In its turn, Transparency International mentions Singapore as No. 3 among 180 countries for the least corruption in the public sector.
With its strong rule of law and a well-developed legal system based on the English common law, Singapore comes with a judiciary that is both independent and impartial, while local courts are reliable where the matter concerns enforcing contracts and resolving disputes.
Strong IP protection
A leading hub for innovation and intellectual property (IP) creation and protection, Singapore boasts a modern IP regime, aligned with international standards and best practices. The nation is a signatory to multiple international IP treaties and conventions, inter alia, the Paris Convention, the Patent Cooperation Treaty, the Madrid Protocol, and the Berne Convention.
Various IP incentives and schemes available in Singapore encourage businesses to develop their IP assets. Here, you will enjoy up to a 200% tax deduction on qualifying IP-related expenses (e.g., registration, acquisition, and licensing fees) under the Productivity and Innovation Credit Scheme. The IP Development Incentive grants businesses a reduced tax rate of 5% or 10% on income derived from qualifying IP assets.
Skilled workforce
If you register a company in Singapore, you’ll have access to a highly educated, productive, and diverse workforce, which is a key asset for any business. A 97.3% literacy rate, combined with a workforce participation percentage of 68.8% is a pleasant bonus for any potential business founder. Singapore’s bilingual education system ensures that most Singaporeans are proficient in English and at least one other language (think Mandarin, Malay, or Tamil).
A world-class education system in the country produces graduates with strong skills and competencies in science, technology, engineering, mathematics, business, and finance. According to the QS World University Rankings 2021, the four public universities of Singapore are among the top 100 in the world. Here, you will also find several foreign universities, which offer a wide range of courses and programs to choose from.
A flexible and open immigration policy allows businesses to hire foreign talent to complement the local workforce. Depending on their qualifications, skills, and salary, foreigners have the right to apply for various types of work passes and visas to enter Singapore.
Central location in Asia
Singapore’s strategic location in Asia makes it a gateway to the region’s fast-growing markets. It connects you to over 400 cities in 100 countries by more than 100 airlines and has a busy airport. The place is also a popular maritime hub, with a port that handles one-seventh of the world’s container transshipment.
A member of various trade agreements, the country enjoys a beneficial opportunity to boost trade and investment with its partners. Apart from being a founding member of ASEAN, which has 10 states with over 650 million people and over USD 3 trillion in GDP, the nation is also a signatory to CPTPP. The latter covers 11 countries whose GDP is well above USD 13 trillion.
Convenient incorporation
Last but not least, Singapore offers a hassle-free company setup process for business founders. It is done fully online and you can complete everything within a few hours, provided that all the required documents and information are ready. At SGD 315 for a private limited company, the business registration fee is highly affordable here.
However, if you are a foreigner who wants to register a company in Singapore, you will have to engage the services of a professional corporate service provider. International Wealth is here to act as your local agent and handle the incorporation process on your behalf. Our seasoned experts will gladly assist you with any other post-incorporation matters. With us, opening a business bank account, applying for a work visa, and complying with the tax and accounting obligations in Singapore are a breeze. To launch your business and enjoy hefty profits, message the International Wealth team without further delay! Remember, the road to success is shorter and easier with professional assistance.