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 Toa Payoh . 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 Toa Payoh 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 Accounting System 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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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.
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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.