Business Blog

Why Singapore Is Known As A Tax Heaven For Corporates?

One of the major reasons why several investors are attracted to Singapore is due to its low corporate tax and the strongest financial incentives provided by the Government of Singapore. Singapore tax is one of the major draws to the corporates as the government levies taxes on profits and not on revenue. Profits of your company will be taxed at 17% if you are a non-Singapore resident company; otherwise, the tax rate is often lower for Singapore-resident companies.

In Singapore territorial tax system is followed where the major income is grossed through treaty countries, avoiding double taxation using a foreign tax credit that is granted under those treaties. Also, the county follows a single-tier tax system in which companies have to pay taxes on their profits, but post-tax profit distribution to shareholders is absolutely tax-free. There are generous incentives and tax breaks for those who are investing in innovative and promising industries, productivity-boosting technologies, and R & D projects. Apart from this, specific foreign-source income is exempted from taxation in Singapore.

Corporate Tax Rate

Singapore’s current corporate tax rate is covered at 17%. However, with the tax exclusion and incentive programs presented by the Singapore government, the actual tax rate for foreign companies can be suggestively lower.

Current Tax Rates

  • Tax on corporate profits: 17%
  • Tax rate on capital gains by the company: 0%
  • Tax rate on dividends distributed to shareholders: 0%
  • Tax rate on foreign-sourced income that was already subjected to taxation overseas: 0%

Incorporate Your Singapore Company

The demand for Singapore company incorporation is accelerating by every passing month because Singapore tax for foreign companies is the best in the world. But for company incorporation, you would need the professional help of someone who has expertise in Singapore Company Registration Services and steps for incorporating a Singapore company.

Before you incorporate your company in Singapore, first you have to choose the type of company you want to establish. You have the below option to choose from:

Local Entrepreneur: This Singapore formation company package is appropriate for financiers who wish to set up a company and have their own local Singapore Director.

Foreign Entrepreneur Without Relocation: This type of company formation package is suitable for foreign investors who wish to set up a Singapore offshore company but have no plans to relocate to Singapore.

Foreign Entrepreneur with Employment Pass: This Singapore formation company package is appropriate for financiers who wish to set up a company in Singapore and ready to relocate to Singapore to run their company operations. For this, you must have a degree qualification and/or relevant working experience to establish a business set up and apply for the employment pass.

Foreign Entrepreneur with Entrepass: This type of company formation package is suitable for foreign investors who wish to set up a Singapore offshore company and relocate to Singapore on an Entrepreneur Pass (EntrePass) to run their business operations. You must have original ideas from overseas that could prove beneficial to the country as well as add to the entrepreneurial vibrancy in Singapore. Moreover, you must meet all the requirements related to the Entrepass application.

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