Singapore

The standard corporate income tax for the year of assessment (YA) 2020 stands at 17% applied on chargeable income of both domestic or foreign companies, subject to exemption as follows:

The corporate income tax rebate for YA 2019 is 20% and capped at $10,000. In addition, there is no capital gains or dividend tax in Singapore.

In order to qualify for start-up exemption, a newly incorporated company in Singapore must satisfy below conditions:

• Be incorporated in Singapore (other than a company limited by guarantee**);
• Be a tax resident* in Singapore for that YA;
• Have no more than 20 shareholders throughout the basis period for that YA where:
  • All of the shareholders are individuals beneficially and directly holding the shares in their own names; OR
  • At least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.

*A company is resident in Singapore if the control and management of its business are exercised in Singapore.

Singapore has an extensive investment protection agreement and double tax treaty network. This includes most countries in the Asia-Pacific Region and countries in Europe, Africa and the Middle East. These countries include China, Indonesia, Thailand, Malaysia, Philippines, Vietnam, India, Japan, Korea, Australia, New Zealand, South Africa, United Kingdom, Netherlands, Germany, Switzerland, Sweden, France, Belgium, Finland and the United Arab Emirates.

Singapore is also one of the very few countries to have a tax treaty with Taiwan. This explains the popularity of Singapore holding companies for Taiwanese investments into China and the region.

Types of company that can be registered in Singapore are:

• Public/Private company limited by shares;
• Company limited by guarantee;
• Unlimited company.

Singapore private limited company by shares is the most popular form, while company limited by guarantee is often used for non-profit purposes. Moreover, there are also exempt private companies eligible for certain privileges for small enterprises.

A minimum of one director (for both individual and corporate), who must be a Singapore natural resident is required. To fulfill this obligation, BBCIncorp could assist you in appointing a Singapore professional director. A foreigner who wants to register a new company in Singapore and act as a resident director of the company or operate the company, must first obtain a valid pass from the government.

The minimum of one shareholder is a must. Shareholders may be corporations or individuals. 100% foreign ownership is allowed. The maximum number of shareholders for a private company is fifty (50).

Names and addresses of company directors/shareholders are publicly disclosed.

The concept of authorized share capital has been abolished in Jan 2006 and the minimum number of issued share is one.

Some of the typical classes of shares include ordinary shares, preference shares and redeemable shares, non-voting shares.

In order to comply with local regulation, a private company has to maintain the followings:

• Corporate structure of at least one natural resident director, one shareholder;
• Local company secretary and a registered address in Singapore;
• Filing annual return with ACRA and tax return with IRAS together with annual audited accounts. The accounts must be audited by a registered certified public accountant in Singapore.
• Holding annual general meetings.

There are two cases where audit exemption is granted: small companies and dormant companies.

To qualify for "small company", a company must meet 2 out 3 following conditions:

• Its total annual revenue at the end of the financial year in question must not exceed S$10 million;
• Its total assets evaluated at the end of the financial year in question must not exceed S$10 million;
• Its total number of full-time employers on the payroll must not exceed 50.

A company is deemed to be dormant if it has no accounting transactions for the financial year in question or has not started business since its incorporation.