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 Bishan . 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 Firms In Central, SG
A key determinant for setting up a business in Bishan 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%.
Why Use Out Accounting Or Accountancy For Business?
For some business owners, a third party accountant just seems like a waste of time and money. Sure, they can minimize the amount of time you spend calculating taxes and duties, but when you're high on time and short on financial resources, the overall cost of an accountant can seem to be too high to have any purpose. While this is sometimes true, for the vast majority of businesses accounting services have the exact opposite effect; you actually end up saving money by using them.
There are several different types of business currencies out there. Of course, money is known as the universal business currency, and it is for trading and purchasing. However, there's another currency that's worth just as much to millions of businesses: time. Without time, there's no way to achieve your annual sales goals, grow your business and meet your business targets. While the global recession has made more businesses starved for money, even during points of economic prosperity businesses are troubled by limited time.
This is where accounting services can prove highly useful. Hiring in-house accountancy staff is incredibly expensive, especially when you take the health costs, legal hiring expenses and time costs into account. While having extra employees adds manpower and time to your business, the cost associated with it is often too high. Accountancy services can save you both time and money in this regard. By minimizing the accountancy workload for your team, you can focus on more direct and important goals. Of course, by using an outside contractor rather than an internal employee, the amount of paperwork surrounding your accountancy dealings decreases tremendously.
Of course, the benefits of using accounting services for your business aren't just limited to time. Many people associate outside contractors and services with extra costs, but for accountants this can be a misguided and inaccurate way to judge them. Accountancy services can save you money, and the cost of using an accountancy firm is easily made up in the amount that you'll save on taxes, duties and government rates. Think about it this way - when you're taking care of your own taxes, you're in a financial world that's completely foreign. As such, some things get passed over and some boxes are left un-ticked. However, by using accounting services to manage and calculate your taxes, you're putting the job in the hands of an experienced specialist, who knows exactly what they need to do to save you money.
It's the old cost vs. time dilemma, and a lot of business owners fall for the wrong metric. Time saved is money saved, regardless of whether it comes with a direct cost or not. If your business has the potential to earn $1000 per hour with your full attention, spending your time on accountancy tasks that can be outsourced for just a fraction of that is a waste of both time and money. Opportunity cost factors for a lot in business, and by focusing on what is important you'll end up saving a bucket load of income.
So next time you're about to embark on a complicated tax mission using your internet employees, or even your own time, think about the opportunity cost involved. Juggling taxes and payments with a major project could end up costing you the quality of both, which means extra costs on both sides. Whenever possible, stick to the direct services of your business, and let your accounting services provider take care of the rest. You'll save money, save time, and grow your business without having taxes, payments and accounts bother you.
Useful Tips For Singapore Business Start Up
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. 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.
Branch Office - Registration of the branch office is done by ACRA and it is treated as an extension of the foreign company. It is the least popular option with foreign companies because
- Head office accounts have to be submitted for taxation purposes. Many companies may not be comfortable doing this.
- Head office bears all the liabilities of the actions of branch office
- Branch office cannot claim local tax benefits
The name of the Branch Office and the foreign office must be same and should be approved by ACRA before registration. Branch office has to appoint two agents that are resident in Singapore. The Branch office can repatriate all its earnings and capital. Only that part of earnings derived from local operations are taxed at local tax rates.
Subsidiary Company - This is the most preferred option for setting up business by the foreign companies because:
- Its liabilities are not transferred to parent company. It is considered a separate company.
- It enjoys the local taxation benefits.
- It can have a local name which is different from the parent company.
One or more directors need to be appointed and at least one director has to be a local resident.
Representative Office - It is used for having a presence in the country while not conducting any business activity. It does not have any legal status and cannot enter into any contracts.
- It can undertake promotional activities for the parent company
- It can negotiate but cannot conclude on deals
- Parent company bears liability for activities of the office.
- It must be staffed by at least one representative from the head office
International Enterprise Singapore (IE Singapore) is the registration authority for Representative Offices for manufacturing, business services, commerce and other sectors. Banking, finance, insurance needs to be registered with the Monetary Authority of Singapore (MAS).