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 Kolam Ayer . 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 Kolam Ayer 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 Firms 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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The Inland Revenue Authority of Singapore (IRAS) has imposed a new scheme known as the Production and Innovation Credit (PIC) to benefit logistics companies in Singapore. For several years IRAS was designing strategies for logistics department to be at par with international companies of Japan and China so they came up with PIC.
The several ways PIC Grant can benefit the logistics companies are listed below:
Funds for automated machines
The PIC scheme has been very beneficial for the logistics companies as they can purchase automated machines and devices. The entire funding is covered by IRAS PIC Grant. As a result, the companies can reach higher levels with increased production and returns. The automated machines also reduce the cost of extra labour and the job can be finished in less time. The productivity becomes higher resulting in greater profits thus competing in the international market.
The experts of IRAS also help these companies to come up with efficient strategies to enhance their productivity. The highly educated panel of IRAS has a lot of experience when it comes to managing financial growth of a company. In most of the cases, the managers of these logistics company are not well accustomed with the strategies to match the international standards. A proper analysis by the IRAS experts will ultimately lead to higher sales and improve the quality of their service.
Logistics companies are a huge blunder when it comes to paying taxes. The tax keeps on mounting and at the end, the companies have to pay a large sum compromising their profit. So the IRAS comes into the scenario and helps these companies set up various plans to solve problems regarding taxation. There can be tax deductions up to 400% in several cases. This will help the companies to provide their services at a cheaper rate to beat their competitors.
The cash pay-out option
The small and growing businesses are the ones who can be hugely benefitted by this cash pay-out option. To aid these companies the Singapore government has come up with many strategies so that they can reach the heights of big companies. With the cash pay-out option, the financially distressed companies can invest in modern equipment and improve their standards.
Productivity along with improvement of Logistics Companies
The PIC Grant, 2014 offers productivity with improvement of the companies all at the same time. There are certain regulations and to be eligible, these companies need to invest in several areas of Singapore economy. This will ultimately benefit the logistics companies but at the same time, the government is doing its part.
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Accounting is one of the most crucial aspects of almost any business. If you intend to outsource your company's accounting functions to a third-party, it is absolutely important to carefully assess every facet of such company's activities before reaching a conclusion.
Here are core tips for choosing a professional accounting vendor for your business:
State your expectations and find out if they can deliver them
Your search for a professional accounting vendor should start with a clear definition of what you want from the vendor and the value you expect the relationship to bring to your business. Find out if the vendor you intend to partner with can deliver what you expect in terms of value and ROI. Do not conceal your expectations.
Discuss your expectations with the vendors. Tell them exactly what you want, how you want it and how you intend to measure their performance. This approach will prevent misunderstanding in the future if they fail to meet your expectations. Also, ensure all agreements are done in writing and signed accordingly.
Growth and size of the accounting vendor
Experience is crucial in accounting. Before outsourcing your accounting functions to any company, do some research on the level of growth of the company in recent years. If the company has shown a positive level of business growth, it could be an indication of the quality of services they render clients.
Find out about the internal structure of the company and the level of experience of the experts they can boast of. Outsourcing to a startup may not be such a good idea, although some may deliver beyond expectations. But outsourcing to an established professional accounting firm will ensure your business accounting is in safe hands and you wouldn't have to bother about ROI.
Track Record of the accounting vendor
The track record of any accounting firm is a reflection of the quality of service it renders clients. Find out if the prospective accounting vendor has a track record of service commitment or if it has a recognized reputation within its own industry. Also, find out if the vendor tracks customer satisfaction level, which is a strong indication of the extent they are willing to go to ensure customer satisfaction.
Feedbacks from previous customers
Listen to what previous customers are saying about the prospective accounting vendors you are considering. One easy way to start is to go online and search for reviews. Find out if an unsatisfied client has written a piece about the vendor or if a satisfied client has recommended them. But do not stop there, ask the accounting vendors to give you a list if their previous customers. They will have no problem with providing you such list, if the quality of the services they are rendering is top-notch.
Data security is as important as your business accounting or even more. Before outsourcing to any accounting company, find out about their security and confidentiality processes. Accounting vendors must be able to show that they use modern and secure information technology systems.
Assess the level of information security management of the vendor, if you observe loopholes or have doubts about the authenticity of their data security, do not hesitate to consider other options. Also, find out if the company has invested in modern data security technology such as cloud to ensure client data are secured.
Relationship management is crucial for the success of the accounting functions you outsource. You need to understand how the accounting vendor you intend to outsource to manage relationship with clients. Consider their communication skills.
Do they often create a communication gap that leaves you searching for more information? Or will language and business culture be a barrier between you and them? You need to consider how well your company can relate with them, share ideas, discuss solutions, establish and maintain a professional relationship.
Avoid the deceit of lowest bidders
There is often the temptation to outsource your business accounting functions to the lowest bidder. Professionals in the accounting business are relatively expensive in service delivery. If you intend to outsource to a professional accounting firm, be ready to pay a competitive price. Just like in any other industry, there are charlatans in the accounting business too. One of the easiest methods these charlatans use to get victims is offering prices that falls below the normal competitive market price.
While the lowest bidder may not be the best option, the most expensive accounting firm may fail to deliver on its promises. As such, do your best to strike a balance between a successful track record, expertise and competitive pricing when selecting an accounting vendor.
Assess financial stability
It is crucial to ensure that the accounting vendor you intend to outsource to be financial secured. You need to find out if the vendor is financially strong enough to manage its business. If the vendor is financially weak or has financial problems such as inability to pay employees, such weakness will affect their quality of service delivery and ultimately affect your business.
How often will you have the opportunity to discuss your concerns with the accounting company you outsourced to? You need to consider the availability of the accounting vendor before signing any contract. In most cases, many small businesses often demand for face-to-face meetings every week or every two weeks, while some large business may demand for monthly meetings or vice versa. Depending on the nature of your business, you may have to discuss with the department or employees responsible for communicating with vendors in order to come up with a reasonable timeframe that will favor your business. It is crucial for you to outsource for the best accounting services for your business in order to ensure ROI.