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 Bukit Timah . 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.
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A key determinant for setting up a business in Bukit Timah 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 CPA Accounting 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%.
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In 2010, Singapore was ranked as the most competitive country in the world. Doing business in Singapore, therefore, means a more fulfilling business atmosphere and better chances of higher profits. However, anyone can say the same about any other country or city in the world. So, what sets Singapore aside from the others? What makes it unique and more business friendly? Why is it that many multinationals are moving their headquarters in to this 710 square kilometers span of an island?
What Makes Doing Business in Singapore Attractive?
1. Singapore is a modern city
Singapore is placed among the most dynamic cities to live in and work in the world today. It has global connections, is cosmopolitan and is also multi-cultural, accommodating a population of about 5 million inhabitants. It is also regarded as one of the most conducive cities for the knowledge-driven industries, globally.
2. It is pro business
Within the last 4 decades, this city has transformed itself from being a small business trade center to one of the world's top financial hubs. It has international air, sea hubs, and one of the most open economies for investment and trade.
3. Consistency in governance
This city is governed by consistent guidelines on business and investment where any business is guaranteed access to an impartial and competent judicial system. There is also clarity and commitment with regards to corporate governance and anti-corruption policy enhancement.
4. Ease of set up
The excellent infrastructure, a cosmopolitan labor force that is highly skilled, attractive tax laws that allow avoidance to double taxation, and low startup costs make starting a business in Singapore very attractive and easy to set up. Entrepreneurs are known to come in to Singapore and set up big businesses within a week!
5. Knowledge based industry
The economy of Singapore is skewed towards high knowledge based industries. There is a lot of emphasis towards innovation and this is what keeps this city very competitive business-wise. The government of this city-state is also relentless in its efforts to protect intellectual property to ensure that ideas and innovations nurtured here are well protected. This further enhances competitiveness.
6. Free trade
Being an active member of the World Trade Organization, Singapore businesses enjoy the luxury of investment guarantee agreements and the many free trade agreements with most other countries in Asia and around the world. International businesses here also get to enjoy 50 of the state's comprehensive double taxation avoidance agreements.
It is these powerful factors that have made Singapore to stand as one of the strongest financial hubs in the Asian region regardless of its small size and small, almost insignificant, population. It has grown in to an Asian region power house for international banking, maritime finance, asset and wealth management, trade finance, treasury operations and insurance.
Companies and businesses that seek to establish themselves in this city-state can easily tap in to the diverse and deep capital markets, while at the same time getting access to the many local and international professional service and financial institutions that are based here.
Simply put, doing business in Singapore is affordable, easy to set up, and fun for any serious business person.
Why Use Out Accounting Or Accountancy For Business?
For some business owners, a third party accountant just seems like a waste of time and money. Sure, they can minimize the amount of time you spend calculating taxes and duties, but when you're high on time and short on financial resources, the overall cost of an accountant can seem to be too high to have any purpose. While this is sometimes true, for the vast majority of businesses accounting services have the exact opposite effect; you actually end up saving money by using them.
There are several different types of business currencies out there. Of course, money is known as the universal business currency, and it is for trading and purchasing. However, there's another currency that's worth just as much to millions of businesses: time. Without time, there's no way to achieve your annual sales goals, grow your business and meet your business targets. While the global recession has made more businesses starved for money, even during points of economic prosperity businesses are troubled by limited time.
This is where accounting services can prove highly useful. Hiring in-house accountancy staff is incredibly expensive, especially when you take the health costs, legal hiring expenses and time costs into account. While having extra employees adds manpower and time to your business, the cost associated with it is often too high. Accountancy services can save you both time and money in this regard. By minimizing the accountancy workload for your team, you can focus on more direct and important goals. Of course, by using an outside contractor rather than an internal employee, the amount of paperwork surrounding your accountancy dealings decreases tremendously.
Of course, the benefits of using accounting services for your business aren't just limited to time. Many people associate outside contractors and services with extra costs, but for accountants this can be a misguided and inaccurate way to judge them. Accountancy services can save you money, and the cost of using an accountancy firm is easily made up in the amount that you'll save on taxes, duties and government rates. Think about it this way - when you're taking care of your own taxes, you're in a financial world that's completely foreign. As such, some things get passed over and some boxes are left un-ticked. However, by using accounting services to manage and calculate your taxes, you're putting the job in the hands of an experienced specialist, who knows exactly what they need to do to save you money.
It's the old cost vs. time dilemma, and a lot of business owners fall for the wrong metric. Time saved is money saved, regardless of whether it comes with a direct cost or not. If your business has the potential to earn $1000 per hour with your full attention, spending your time on accountancy tasks that can be outsourced for just a fraction of that is a waste of both time and money. Opportunity cost factors for a lot in business, and by focusing on what is important you'll end up saving a bucket load of income.
So next time you're about to embark on a complicated tax mission using your internet employees, or even your own time, think about the opportunity cost involved. Juggling taxes and payments with a major project could end up costing you the quality of both, which means extra costs on both sides. Whenever possible, stick to the direct services of your business, and let your accounting services provider take care of the rest. You'll save money, save time, and grow your business without having taxes, payments and accounts bother you.