Expanding your business horizons beyond the borders of your home country can be a strategic move that opens up a world of opportunities. One effective way to achieve this expansion is by setting up an offshore company. As one of the best countries to establish business endeavors, Singapore can be your ultimate choice to establish an offshore company.
Want to know more about an offshore company, what are the benefits, and the step-by-step guide to establishing an offshore company in Singapore? Read on below to get the comprehensive insight!
What is an Offshore Company?
An offshore company is a business entity established outside the country of residence of its owners or investors. These entities are often set up in jurisdictions that offer favorable tax and regulatory environments, making them an attractive option for businesses seeking international expansion.
Here are some of the ultimate reasons why the offshore company provides be a great strategy for a company to do:
- Access to Additional Expertise: Your company can get an extensive talent pool that is diverse, skilled, and knowledgeable.
- Business Expansion: Consider setting up an offshore company when your business experiences growth, which leads to increased interest from investors and stakeholders.
- To Retain Assets: Opening an offshore company can help a company retain assets through various legal and financial mechanisms that are often advantageous in offshore jurisdictions. For example, Singapore offers substantial relief from Stamp Duty and Capital Gains, making the establishment of a Singapore offshore company an attractive option.
What are the Benefits of Setting Up an Offshore Company in Singapore?
There are plenty of reasons why Singapore is a great place for you to set up your offshore company. We have outlined all the benefits that Singapore can offer below.
Tax Advantage
Singapore is renowned for its attractive tax regime. With low corporate tax rates, no capital gains tax, and no dividend tax, businesses can significantly enhance their profitability.
Easy Incorporation Process
Singapore has maintained its status as a country with a top business environment as indicated by the latest rankings from EIU. One contributing factor to this status is the seamless ease of incorporating business in Singapore, where it can even be completed within a short time frame - typically ranging from two days to a week. If you’re uncertain about the process, you can enlist the assistance of a corporate service provider to guide you through every step. Moreover, Singapore also permits foreign companies to fully own businesses within its jurisdiction.
Robust Banking System
Singapore with its reputation as a global financial hub, stands out as a premier destination for setting up an offshore company. Additionally, offshore companies in Singapore can enjoy a wealth of banking options due to the country’s robust banking system. With its affluent financial landscape, Singapore has emerged as one of the most accommodating destinations in Asia for offshore banking. The country’s major banks provide an extensive array of financial services which is tailored to the needs of the offshore entities.
Political & Economic Stability
Singapore is one of the least bureaucratic and most politically stable nations in Asia. It is renowned for its transparent governance, corrupt-free government, and a pro-business country. The political and economic stability in Singapore helps to further ensure that businesses can operate in a secure and predictable environment. This stability is crucial for entrepreneurs who aim for long-term success and sustainable growth.
Global Accessibility
Singapore boasts a strategic location in the heart of Asia, providing easy access to the burgeoning markets of the region. With its strategic location, Singapore facilitates easy access to markets in Asia and beyond. Additionally, the city-state’s world-class infrastructure and efficient transportation network make it an ideal country to set up a business or become a base for international trade.
Build Credible Business Image
Incorporating an offshore company in Singapore carries significant credibility and legal stature due to its country's reputation. Thus, establishing an offshore company in Singapore will signal legitimacy and reliability. This choice communicates to stakeholders and other professionals - that your business operates with transparency and adheres to high standards of governance.
Variety of Venture Capital and Funding Options
Setting up an offshore company in Singapore provides access to a diverse range of venture capital and funding options, enhancing the growth potential of your business. Singapore’s robust financial ecosystem attracts investors from around the globe, including venture capitalists, private equity firms, and angel investors. These stakeholders are drawn to Singapore's reputation as a dynamic hub for innovation and entrepreneurship, making it easier for offshore companies to secure funding for expansion. Additionally, Singapore also offers various government grants, incentives, and funding schemes to support businesses across different stages of growth.
A Supportive Environment for Foreign Ownership
Singapore also prides itself on being one of the most open and welcoming economies for foreign investors and businesses. Unlike other countries which apply restrictions to foreign ownership or investment, Singapore does not restrict the percentage of foreign ownership in most industries. The country's pro-business policies and supportive regulatory framework make it easy for offshore companies to establish a presence and operate with confidence in Singapore.
How to Set Up an Offshore Company in Singapore?
Step 1: Appoint Incorporation Agent
Setting up an offshore company in Singapore involves several steps, and the first step is to appoint an incorporation agent. At Wealthbridge, we have established ourselves as one of Singapore's top leading incorporation providers. We specialize in bridging the gap between your company and the relevant authorities and guiding you through all the necessary procedures and paperwork. Therefore, if you're currently seeking a reliable incorporation agent, you can easily reach out to us!
Do keep in mind that appointing a trusted incorporation agent is crucial for ensuring a smooth and efficient incorporation process for your offshore company.
Step 2: Prepare All The Requirements
Step 3: Register your company with ACRA
Once all required documentation is assembled, the next step is to register your company with the Singapore company registrar. This process is typically swift and can often be completed within a single day. Upon approval by ACRA, your business will be officially acknowledged by the Singaporean government.
Step 4: Post Registration
After completing all the setup processes and acquiring approval, several steps need to be taken before commencing your business operation.
- Register for GST, CPF, and SDL
In Singapore, registration for CPF and SLD is necessary for tax compliance related to the employment of workers. CPF registration can be conveniently completed online, while SDL payments offer multiple channels for submission. As for GST registration, it is mandatory if your company earned S$1 million in the previous year or plans to do so in the upcoming year.
- Acquire Business License or Permits
Setting up a business operation in Singapore might necessitate you obtaining a business license, depending on the nature of your business activities. Certain types of business necessitate the acquisition of a license, which must be secured from the appropriate government agency after the company incorporation but before the commencement of business operation.
- Open Bank Account
Next, you can also open a local bank account which can help to facilitate financial transactions, ensure tax compliance, enhance credibility, and access a wide range of financial services essential for business operations.
Step 5: Adhere to ACRA Rules After Incorporation
After you have successfully incorporated your business and commenced its operation, the next thing you should always keep in mind is to adhere to ACRA rules. ACRA plays a crucial role in regulating businesses in Singapore. Under the Singapore Companies Act, all Singapore companies are mandated to file with ACRA annually, necessitating continuous administrative efforts from offshore companies operating in Singapore.
For example, you should conduct the Annual General Meeting (AGM), and your initial AGM must be held within 18 months after your company incorporation. And preparing a company's annual returns report, which includes various documents for verification such as the company's full name and registration number, details of directors, company secretaries, auditors, shareholders, principal activities, and registered charges. All of these must be submitted to ACRA within 30 days after its AGM. Additionally, these documents are also required to be submitted to the Inland Revenue Authority of Singapore (IRAS) and ACRA on an annual basis.
Non-compliance with these regulatory requirements may lead to court prosecution, thus you should be careful and prioritize adhering to all ACRA rules.
Incorporate with Wealthbridge!
Setting up an offshore company in Singapore is a strategic move that brings forth tons of advantages for your business. Fortunately, bringing your offshore company to life in Singapore doesn't have to be a daunting task!
Our reliable team at Wealthbridge is here to assist you every step of the way. With our expertise, you can establish a robust offshore presence in Singapore, and tap into the many benefits the Lion City has to offer!