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 Clarke Quay . 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 Small Business Tax In Central, SG
A key determinant for setting up a business in Clarke Quay 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 Small Business Tax 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%.
Professional Accounting Bodies 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.
Company Registration Options in Singapore
The extent of your business financial transparency and the level of expertise of the people responsible for such transparency will influence the growth and expansion of your business as well as its survival. This is why accounting and bookkeeping are some of the most crucial aspects of any business and should only be taken care of by licensed professionals with wealth of experience.
Regardless of the size of your business and niche, as it grows, the need for keeping accurate and transparent financial records also grows with it. This is a good reason why such aspect of your business must never be treated with levity. Considering the relationship between in-house accountants and other employees under the same roof, outsourcing your accounting functions is often the most appropriate option in ensuring financial transparency in every facet of your business.
But what exactly is outsourcing? It is the practice of giving out some job functions or responsibilities to a company or an individual that specializes in providing services for such functions or responsibilities, rather than have an in-house employee or department handle such jobs.
Here are the key benefits of outsourcing your accounting functions to a professional accounting firm:
Gives you enough time to focus on business growth
Outsourcing your accounting functions will give you all the time you need to direct your attention on other crucial aspects of your business. Once your accounting responsibilities are outsourced, you can focus on delivering high-quality services or products to your customers and prospects.
Also, you can develop strategies to break into new markets and expand on existing market etc. focusing on these core business competencies and less on the burdens of accounting accuracy and transparency will translate into business growth and profitability that will outweigh the costs of outsourcing.
Your payments will always be on time
Once you outsource your accounting functions you no longer have to worry about missing payments such as unpaid bills or invoices not going out on time. If your invoices are delayed, payments get delayed too and your business cash flow ultimately suffers.
Also, if your bills are not paid when they are due, you will receive collection calls, vendors will limit or stop their discounts, and you may even spend more time trying to resolve shut-off notices, unhappy vendors and grumbling collectors. But with a professional accounting firm handling your accounting, you can seat back, relax and watch your entire business accounting functions run smoothly.
You don't have to bother about turnover or absence
With your accounting functions outsourced, your business accounting will be done every day, every week and every month and you wouldn't have to bother about things like vacation, illness or turnover. The company you outsourced your functions to will be working for you round the clock ensuring professionalism in every facet of your job without excuses such as vacations, illness, absences, etc.
Maintaining your cash flow during growth
The survival of almost any business is tied to its cash flow. Once a business begins to grow, it gradually sucks cash. During periods of major growth, accounting functions are often relegated to the bottom of administrative responsibilities list. During such moment, you may not have the time to review your business report, manage collections and invoices, and your bookkeeping may end up in a very bad shape.
At such periods you will easily notice that while your business is thriving, you have no cash in the bank to show for it. Digging yourself out of such hole may require twice of the effort it took to get into it and you can easily lose sight of your business core competence while trying to dig yourself out.
Outsourcing saves money! When you outsource your accounting functions you don't have to bother about things like health insurance, vacation, sick time, payroll taxes, retirement benefits etc. The company you outsource your accounting functions to will bill you for its professional services and workers time depending on the agreement you signed.
The money you should have spent on an in-house accountant can be re-invested into other crucial areas of your business. Also, in the long run, you get to save a whole lot of money by outsourcing your accounting services.
Your business accounting will be done by top-notch professionals
Accounting companies that perform outsourcing services are often made up of top class accounting professionals with several years of experience and education to survive without being hired by just one client. They have skills, experience and expertise to deliver with speed and accuracy.
You don't have to bother about the level of competence of their workers or if they have the required experience to do your job as expected. Once you outsource your accounting services, be assured that your business accounting functions are in good hands. Also, you don't have to go through the rigor of screening accountants, conducting tests, interviews etc. before hiring. You can skip all that once you outsource your accounting functions.
You're still in charge
It is easy to assume that once you outsource your business accounting functions you will lose control of your money. That is a pure fallacy. Outsourcing gives you greater power to control your money and puts you in the driver's seat of your business financial matters. Every payment will require your approval before it is done. You will be involved in every relevant communication chain with your clients and prospects and your accounting reports will be consistent and up to date.
Without a strong bookkeeping and accounting services, it will be difficult for any business to thrive and compete in its niche. Outsourcing your accounting services will give your business the edge it requires to be at the forefront of financial transparency, recording and absolute accuracy in all its transactions and accounting related matters.