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 Commonwealth . 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 Accounting System In Central, SG
A key determinant for setting up a business in Commonwealth 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%.
IRAS PIC Grant scheme, a Huge Boost for Small Logistics Companies
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.
Company Registration Options in Singapore
What is an accountant? According to the Australian Accountants Directory they are, "a practitioner of accountancy or accounting, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources"("About Accountants"). As you may already know, different areas of the world have different professional bodies of accounting.
For example, not every country uses the American Institute of Certified Public Accountants (AICPA). As the name suggests, that's only used in the United States. Australia however, has three legally recognized local professional accounting bodies; the institute of public accountants (IPA), CPA Australia (CPA), and the institute of chartered accountants of Australia (ICAA).
The IPA has been around since 1923 and continues to grow in the organization today. After 90 years it currently sits more than 26,000 members and students across 64 countries and is ranked in the top professional accounting bodies in the world ("Institute of Public Accountants"). They acquired a full membership of the International Federation of Accountants (IFAC) in 2005 as well as the Confederation of Asian and Pacific Accountants (CAPA) in 2011. They are really working towards building relationships and exchanging knowledge overseas. They are innovative in everything that they do as they already are recognized as one of the top 20 in BRW's most innovative companies in Australia list for 2012. The IPA has three levels of membership, Associate (AIPA), Member (MIPA), and Fellow (FIPA). An Associate membership requires one to have an Australian Advanced Diploma of Accounting or a Bachelor's degree in Accounting that can be Australian or equivalent in nature. MIPA membership requires Australian Advanced Diploma of Accounting, two years of pre-IPA program full-time work experience in accounting or related fields and a mentored experience program. A FIPA membership requires 7 years' MIPA status or equivalent and 10 years' experience in accounting the last five years have to be at a senior level ("Institute of Public Accountants").
According to CPA Australia, they are one of the world's largest accounting bodies with a global membership of more than 150,000 members working in 120 countries around the world, and with more than 25,000 members working in senior leadership positions ("About Us"). They provide education, training, technical support and advocacy. They were an early entrant in the Asian Market, where their involvement began in the early 1950s and aimed at developing and strengthening the accounting profession in the region. As of today almost one-quarter of CPA Australia's members reside outside of Australia, with over 35,000 in Asia. They currently have nineteen staffed offices across Australia, China, Hong Kong, Malaysia, Singapore, Indonesia, Vietnam, New Zealand and the UK. To become a member of this program candidates most hold a postgraduate award that is recognized by CPA Australia, and demonstrate competence in the required knowledge areas and, within a six year period, successfully complete the CPA Program ("About Us"). They must also have three years of professional experience in finance, or accounting for business. To offer public accounting services, CPAs must also complete CPA Australia's Public Practice program, which involves distance learning and a residential component, and must hold a Public Practice Certificate in accordance with the CPA Australia's by laws.
The ICAA is the professional body representing Chartered Accountants in Australia. They currently have over 50,000 members and 12,000 students("News and Updates"). In order to become a member of the institute, one has to complete the Chartered Accountants Program which includes study of Graduate diploma in Chartered Accounting (GradDipCA) and three years of practical experience. Entry is available to anyone who holds an accounting degree; however, those holding non-accounting degrees can also be permitted entry after additional requirements are met. If one does become a Chartered Accountant they must complete a total of 120 hours of Continuing Professional Education every three years. The ICAA is a founding member of the Global Accounting Alliance (GAA). Members of this alliance are part of the international accounting coalition of the world's premier accounting bodies. Chartered Accountants audit 100 percent of the top ASX-listed companies in Australia. They are recognized by the international accounting bodies of the leading financial centers of the world. As of November 2013, the ICAA merged with the New Zealand Institute of Chartered Accountants and are now known as "Chartered Accountants Australia and New Zealand"("News and Updates").
Compared to the professional bodies in America the ones in Australia aren't too different judging from the research. They each go off of the same principals in a sense but there are very few minimal things that are different.
"About Accountants." Australian Accountants Directory / Australian Accountants Directory / Accountants. N.p., n.d. Web. 07 Apr. 2015.
"About Us." CPA Australia -. N.p., n.d. Web. 03 Apr. 2015.
"Institute of Public Accountants." Institute of Public Accountants. N.p., n.d. Web. 07 Apr. 2015.
"News and Updates." Chartered Accountants Australia and New Zealand. N.p., n.d. Web. 05 Apr. 2015.