Which is an ideal jurisdiction for company incorporation in Asia? Singapore and Hong Kong have been dominant players in the Asian region, vying for the position of “the best place to do business.” But the crucial questions are, which of these jurisdictions have an edge over the other? Is incorporating a business easier in Singapore or in Hong Kong?
Strategic location and attractive tax benefits make Singapore the most preferred location for the overseas companies to set up their business. Various options are – opening up a Branch Office, a Representative Office or a Subsidiary in Raffles Place . The country also has liberal immigration policies. If the company wants to set up their regional head quarters in Singapore they are also provided with Financial Assistance.
Best Tax Preparation Services In Central, SG
A key determinant for setting up a business in Raffles Place is the tax regime in force. In this regard Singapore boast of being one of the lowest tax jurisdictions in the world. Detailed below is an overview of the tax system and Tax Preparation Services in Singapore.
Tax jurisdiction Singapore: Taxes are levied on a territorial principle i.e. companies and individuals are taxed on Singapore sourced income. In addition, the Foreign sourced income (branch profits, dividends, service income, etc.) are taxed when it is remitted or deemed remitted into Singapore unless the income was already subjected to taxes in a jurisdiction with headline tax rates of at least 15%.
Financial Reporting & Auditing in Singapore
Singapore is one of the leading Asian countries for business and commerce and has been rated as one of the best business environments in Asia Pacific. It's no wonder that small and medium sized businesses and even business conglomerates from across the globe surge to this tiny nation.
If you are planning on starting a business in Singapore here are some useful tips that can help you in the Singapore business incorporation process.
Singapore Companies Act
To begin business formation in Singapore you must be familiar with the Singapore Companies Act (SCA). Singapore companies are primarily governed by the Singapore Companies Act, but it must be noted that companies may fall under regulations of other statutes based on the type of business they are into.
Requirements for Singapore business set up
• The law states that the in order to set up a company in Singapore, the company must have a minimum of 1 Shareholder + 1 Director + 1 Company Secretary
The director of the Singapore business setup must be a citizen or permanent resident of Singapore. He/she may also be Singapore Employment Pass holder. The director of the company must be above 18 years of age and must not be bankrupt nor have prior record of malpractice.
The law allows a maximum of 50 shareholders for a Singapore business setup. The share holders may be individuals or a corporate entity. The said director can be the shareholder as well or they can be separate individuals. 100% local or foreign shareholding is permitted.
The company secretary
According to the SCA, a Singapore business set up must have a company secretary. The company secretary needs to be appointed within six months of company incorporation and he/she must be a resident of Singapore.
• The company must also have a minimum initial paid-up share capital is S$1
The minimum paid-up capital for registration of a Singapore company is S$1 unless if you are an EntrePass holder in which case the paid-up capital will be S$50,000.
• The Singapore company setup must have a Singapore registered office address. The office address must be a Singapore registered address and addresses with a PO Box are not allowed.
Singapore business formation is made much simpler with the help of a professional business start up service. A professional service provider can aid you in the process of business incorporation in Singapore. A professional service provider will not only assist you in registering a company in Singapore but will also assist you throughout the entire process of business incorporation.
Professional business incorporation services ensure that you have the right information, documentation and get the right resources for setting up a business in Singapore.
Business incorporation services advise you on the relevant licensing requirements specific to your line of business and you can also avail useful business concierge services that can help you find a suitable location for your office, develop your IT and networking infrastructure etc.
You can also avail several supporting services such as taxation services, bookkeeping services and business accounting services.
Company Incorporation - Singapore Vs Hong Kong
A lot of people who do not understand business will tend to ignore accounting of the business. So why use accounting or accountancy for business?
I have a close friend (with an accounting background) who is married to a man who sells computer components and DIY desktops. She was working in an events management company at first, but because their marriage was on the rocks, she decided to resign from her job to help out with her husband's business.
At first, the computer business was getting less than 20,000 dollars profit per month, but since her entry into the business, the profit began to grow monthly. It eventually exceeded 300,000 dollars profit within her first year of taking over the business. When I asked her how she did it, she answered that all she did was to make sure the accounts was recorded daily. She also ensured that costs were kept under tight control.
Most important of all was that the husband / wife relationship grew as well.
My friend's story taught me a lesson. In running the day-to-day operations of a business, it is necessary to keep track and document all your income and expenses. If marketing and sales activities are always the top priority in any business, then accounting and bookkeeping statements will come as the second most important element.
I have been reading books about entrepreneurs outsourcing accountants and bookkeepers for their business transactions, and this decision has given them a great amount of extra time to focus on the marketing and sales aspects of the business.
Do not even try to Do-It-Yourself by getting accounting software especially so if you do not understand accounting. Even if you do understand accounting, you will not be able to focus on growing you business.
By engaging an outsourced accounting or bookkeeping firm, you will be able to cut down a lot of your costs. At the same time, a third party outsourced firm will be able to verify your business transactions for the whole work year, thus further decreasing the cost in auditing services.
Always have the attitude of outsourcing and not the DIY mentality. While we must try to be an all-rounder in our business, we must also acknowledge the fact that we are not always able to do everything. Instead, delegate tasks that are not directly generating in income to the business.
This is the new generation of doing business - knowing where exactly costs can be easily reduced.
In summary, if you do not take the time to properly analyse your accounts, you will be unable to assess how your business is doing.
With proper bookkeeping to ensure that every transaction is properly filed, you can be assured that generating a quarterly profit/ loss statement and monthly cash-flow statement will be easy and most important of all, accurate and up-to-date.