Singapore Background

Major international financial and trade centre.
Tax-efficient legislation.
Significant ongoing statutory requirements.

Introduction

Singapore is located on the southern tip of the Malay Peninsula. One of the original tiger economies, Singapore is now a major international financial and trade centre and rivals Hong Kong as the world's biggest container port. Singapore has a reputation for being highly regulated, however in reality it is a carefully administered jurisdiction.

Law and Taxation

Singapore has a British-based legal system and corporate law operates on a common law basis. Singapore is a signatory to a number of double tax and investment protection treaties which provide some tax planning and security advantages. A Singapore company with external investments that are correctly structured and administered may not be liable for tax on profits generated from activities conducted outside Singapore. From Year of Assessment (YA) 2008, companies are taxed at a flat rate of 18% on their chargeable income. A newly incorporated company that satisfies the qualifying conditions can claim full tax exemption on the first $100,000 of normal chargeable income (excluding Singapore franked dividends) for each of its first three consecutive YA's. Estate duty was abolished on 15 February 2008.

Please consult your tax accountant to fully understand how and when the exemptions apply.

Corporate Requirements

Each Singapore Company must have a local registered office which must be a physical address and not just a Post Office box.
Each company must have at least one director. A corporate director is not permitted and the director must be a citizen of Singapore, a permanent resident or an employment pass holder.

For incorporation purposes, an individual subscriber is preferred. Thereafter, shares may be held by a corporate shareholder (i.e. holding company). Bearer shares are not permitted. Each private limited company must have a local company secretary and maintain accounts which must be audited by a local auditor. A qualified local company secretary is only required for a public company. A sole director may not act as the company secretary.

The current law allows certain private companies to be exempted from audit requirements in respect of a financial year if its revenue in that year does not exceed SG$5 million for financial years starting on and after 1 June 2004.

Details of the company's directors, shareholders and secretary must be filed with the Registry of Companies and put on public record. Each year, the company must submit an annual return together with audited accounts (unless exempted). Penalties apply for late filings.

Subject to the Companies (Amendment) Act 2004, private companies may dispense with Annual General Meetings.

Local Infrastructure

Singapore is a sophisticated international business and financial centre and as such it is home to numerous domestic and global banks, stockbrokers and finance houses. All the major international legal and accounting firms have offices in Singapore. Singapore has a stable government and a rich pool of professionals who are able to assist in all international business transactions.
With an airport that serves as a regional hub for over 100 destinations, state-of-the-art communications and a sound infrastructure, Singapore companies are well positioned to take advantage of its many tax treaties.