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Nowadays, to enter the regional or global market, there are a vast number of attractive jurisdictions. Nevertheless, according to analysts, in the last decade, the attention of our compatriots has been increasingly attracted by a small country in Southeast Asia. Of course, this is Singapore. Why is it attractive today?
We will try to reflect on this in our article and find several reasons for this choice.
If you do not have enough information on registering a startup in Singapore (register a company in Singapore), please contact our experts for help. You can leave a request on our website in a convenient form or write to us at info@eltoma-global.ru.
Many people spend most of their lives in the country where they were born. It is understandable. They live by the principle: be of use and carry your business in the country where you were born. Therefore, most entrepreneurs start a new business in the conditions usual for them, in their homeland. But not everyone is ready to put up with existing stereotypes. Some may start their business in new realities and, as a result, find themselves in another country. It's no secret that as the economy integrates and cross-border movement becomes more accessible, you can explore other countries and choose more promising jurisdictions for business.
Of course, you must be prepared for the fact that you will have to navigate in completely unfamiliar conditions, learn new rules of everyday culture and state policy, overcome the language barrier and a lot more that you may encounter in new environmental circumstances. But, firstly, you need to thoroughly study the details of different life spheres in this country. The Internet and other sources of information will help you with this. Secondly, if you know the answer to the question “why do I need this” or if you don’t afraid to change your life drastically, you will overcome any obstacles and succeed.
We can confidently say that a business-friendly jurisdiction is one where the government guarantees private companies access to a high-quality workforce, creates an attractive tax regime, ensures smooth transport operation, controls public safety and improves the judicial system. Moreover, there should be no bureaucratic delays in the country and optimally convenient access to all structures of public services is needed. In other words, the state should be FOR the person, not vice versa.
And what do you think, which state best meets these criteria? Yes, it is Singapore.
For more than ten years, the World Bank has placed this jurisdiction in the top three among 190 countries for ease of business. Think about these numbers! Behind this simple arithmetic is the real prospect of business stability.
Launching a startup in Singapore is easy. Corporate compliance rules are accessible and understandable. Startups can follow these rules without undue delay and financial burden. The following rules apply to small and medium-sized companies:
• Compliance with accounting standards and timely filing of tax returns.
• Timely updating of state reports in case of any changes in the structure of the company.
• Compliance with the rules of employment registration.
• Protection of personal data of employees and customers.
• Providing conditions for open competition between markets.
• If necessary, a start-up can obtain permission for a license to conduct activities.
Singapore's corporate tax policy is market-oriented, and tax incentives apply to start-ups that are owned by foreign nationals. Companies with foreign capital benefit from open ownership rules and minimal currency controls. The government allows foreign nationals to own 100% of a firm's shares registered in Singapore without the need to have shareholders and local partners.
Startups do not follow the government's wishes but choose a capital structure that is convenient for them. Moreover, there are no restrictions on moving capital into the country and back. All of the above factors allow startups to operate in Singapore without burdensome laws and with free access to funds.
To succeed, a startup will need the help of many market participants: investors, various service providers, licensed service providers of research institutes, co-working spaces, accelerators, and government organisations.
The resources available in Singapore for startups are another vital reason for choosing this jurisdiction.
Entrepreneurs prefer megacities with a developed startup ecosystem. Startups benefit from a business infrastructure where peers and mentors help launch new startups and support existing startups.
Singapore is a small country, comparable in population to a large metropolis: it is home to about 6 million people. However, in Singapore, there are more than a few thousand startups, dozens of investment funds, a huge number of business angel networks, more than 50 co-working spaces, and a new culture of entrepreneurship is being formed. As a result, Singapore confidently leads in the production of "startup factories" in Asia.
The government of the jurisdiction provides support to startups in Singapore, provides a large number of resources, creates grants, provides attractive tax incentives, and provides other assistance. Such support depends on the needs, the demand for services and the ability to meet qualification requirements. After registering a startup in Singapore, many resources for companies become available. The government oversees the creation of several funds and grants that target specific emerging industries. Most of all, substantial global venture capital funds focus on local startups.
With the free movement of international capital allowed by Singapore, fundraising has become fast and efficient.
The ecosystem of early investors in Singapore is more vital than ever before. The industry has taken off internationally as many startups seek funding from venture capitalists, who may also exist outside of Singapore. Singapore startups are not limited to the capital as they can access local and international money.
In addition, Singapore is recognised as the second free economy in the world, which makes it an even more attractive place to launch startups.
The country's tax policy is highlighted as a defining argument when choosing a jurisdiction for registration. Singapore, in this sense, is a unique jurisdiction for startups.
During the first three years of their existence, newly formed companies receive tax benefits. As a result, the tax burden for the first 100 thousand Singapore dollars of income from 2020 has been reduced to 25%. Numerous tax deductions are also available to promote R&D and improve the productivity of startups, further reducing the effective tax rate. Commercial losses are also carried forward to future tax liabilities.
Singapore has had a single-tier corporate tax system since 2002. Corporate dividends are exempt from taxes, and companies are not required to withhold tax on dividends paid to shareholders.
There is no capital gains tax in Singapore. Instead, shareholders receive the total amount of the value without taxation if the business is sold. It can be contrasted with the tax policy of most countries: Germany, the USA, Great Britain, Japan, India, Brazil, Australia, China, and Russia.
Including various tax credits and R&D deductions, the effective tax liability on corporate income is reduced by less than 10%.
In new innovative sectors, intellectual property is a significant asset for companies. Concerning the protection and enforcement of intellectual property laws, the position of Singapore is apparent. Therefore, according to the International IP Index, the jurisdiction takes its rightful place among the top 10 countries in the world.
The Singapore government has a sound policy regarding intellectual property, supporting and protecting it. It makes Singapore one of the safest jurisdictions. The government is pursuing a master planning line for an IP hub where Singapore protects IP rights with a modern legal framework in the areas of patents, trademarks, copyrights, trade secrets and industrial designs.
Among many foreign companies for which intellectual property protection is of paramount importance (Microsoft, Facebook, Google and Instagram), Singapore is increasingly attractive to other jurisdictions; it is chosen as a hub because of such protection.
Singapore's legal system is known for its fairness. The efficiency and impartiality of the legal system allow Singapore to take its rightful place among the countries with minor corruption.
Since the beginning of the state's existence, corruption has been limited by a set of rules and moral norms established by the first Prime Minister of Singapore, Lee Kuan Yew.
Thanks to the careful selection of personnel and a competent training system, the percentage of bribery and other illegal acts in the government are negligible. The State Security Agency of the country is systematically working in this direction: the best specialists are selected and provided with good salaries so that they would not be tempted to receive illegal money in the future. Moreover, severe punishment is imposed in case of the unreliability of actions and misconduct, which subsequently reduces the temptation to commit corrupt acts.
The courts strictly control the observance of laws, while the judicial system enjoys authority worldwide for its fairness, neutrality, lack of political influence, and quality. Confirmation of the established reputation of the Singapore legal system is that most large corporations are ready to use Singaporean law for contracts, even if neither party is located in the country.
WANT TO EXPAND YOUR STARTUP IN SINGAPORE? IT'S SIMPLE!
You will be pleasantly surprised by how easily you can expand a startup in Singapore to the global market. This circumstance favourably distinguishes the jurisdiction from other countries, another factor in the choice of jurisdiction. Many entrepreneurs understand that international expansion is essential to their growth strategy. Singapore is a unique jurisdiction that provides almost unlimited opportunities for overseas expansion.
Singapore has several other advantages. One of these is its favourable geographical location: Singapore is located in the heart of Southeast Asia. Singapore Changi Airport is a modern, comfortable and reliable air harbour. It has a huge aircraft capacity, Skytrax, and has been the "world's best airport" for seven years. Passenger traffic is really big: it is more than 20 million passengers, flights to major cities of the world are made daily.
Some of the world's largest economies - Japan, Australia, China, and India - are nearby. Entrepreneurs choose the essential quality of "accessibility" to other major world markets.
In addition, the Singapore authorities allocate large enough funds to finance programs that assist startups in Singapore with their expansion and promotion in world markets.
It is allowed to use grants for marketing research.
Singapore corporate law provides significant support for holding company structures. Other advantages, such as an extensive network of agreements to avoid double taxation, the absence of currency restrictions, the ease of capital movement and other benefits when starting a startup in Singapore, were mentioned above.
We offer to register a startup in Singapore and open a bank account in a foreign bank convenient for you.
If you want to get more detailed advice on company registration in Singapore, please get in touch with our experts.
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