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 Marina Bay . 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 Marina Bay 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 Audited Accounts 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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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
Business disputes are an inevitable fact of life. In a competitive world-be it with local business transactions or on the other side of the world in Singapore-business law is a necessary tool for running an enterprise. A small business attorney is often as much a partner to a corporation as are tax accountants, marketing consultants, and human resource recruiters.
In the U.S., business law is largely the same. Business laws are written to establish fairness and a means of resolving disputes. The process is orderly and predictable, even if the outcomes are not always assured. Following is the process your attorney guides you through in business-to-business litigation:
- ADR (Alternative Dispute Resolution) - This is a court-supervised approach to avoiding litigation, seeking to resolve the dispute in a speedy, efficient and inexpensive way. Both parties must agree to participate in this process.
- File the claim - Your attorney formally makes this filing to the court and the defendant, stating your dispute and asking for a specific settlement.
- Discovery - Both plaintiffs and defendants must be amenable to allowing business records to be examined by the other party in gathering evidence. Employees and agents may be required to provide testimony in advance as well.
- Proceed to trial - If pre-trial attempts at settlement are unsuccessful, the plaintiff and defendant must meet in court to make their arguments. The court will render its judgment at the close of the trial.
- Appeals court - If a matter of how the trial was conducted is in dispute, or new evidence surfaces that is germane, a higher court can rule on the judgment. At times, decisions can be reversed.
Note that the ADR approach comes with its own set of rules. Impartial, neutral parties that include mediators, case evaluators, and arbitrators must facilitate the discussions and resolution. The mediation focuses on needs and interests instead of rights and positions, whereas the settlement is ultimately voluntary. Non-binding arbitration results in rendering a decision, but either party can reject the decision and choose instead to pursue a trial in court.