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 Raffles Place . 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 Tax Preparation Services In Central, SG
A key determinant for setting up a business in Raffles Place 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 Tax Preparation Services 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%.
Company Incorporation - Singapore Vs Hong Kong
Tax information exchange agreement (TIEA) is an agreement between parties to transfer domestic tax information. It possesses no benefit to private third party. In fact, the government is the only party getting the benefit. The existence of such an arrangement will affect financial secrecy. It is considered as an important feature for some offshore investors. Experts of offshore banking and investments would not suggest their clients to do business in a country with a TIEA attachment.
TIEA is implemented to avoid a harmful tax practice. According to Organization For The Economic Co-Operation and Development (OECD), the lack of effective exchange of information is one of the key criteria in determining harmful tax practices. It even has a working group aimed to develop a legal instrument that could be used to establish effective exchange of information. The Agreement represents the standard of effective exchange of information for the purposes of the OECD's initiative on harmful tax practices. The OECD even has developed a manual and tool-kit for automating the process of information exchange between countries. It also lists countries, which deemed to be unco-operative. Andorra, Liechtenstein, and Monaco listed by The OECD's Committee on Fiscal Affairs as unco-operative tax havens.
A recent act by the OECD was forcing tax haven characterized countries to favour for greater transparency and exchange of information. Singapore and Hong Kong was among the countries devoted to such and arrangements with OECD countries. Both of them were categorized as a tax haven country by offshore specialists.
For individuals this could means less privacy and little space to move. Tax haven is great place for an internet-based business. Own a monetized website, create an offshore account in a tax haven country, and you have a tax-free income. However, this strategy would soon be neglected, since the information and exchange agreement would be implemented and propagate rapidly. For your own convenience, offshore investment as a tax avoiding strategy should not be relied on. Contact a well-known CPA's or tax consultants for a better and legal tax minimizing strategy.
Benefits of Outsourcing Accounting Services to a Professional Accounting Firm
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.