You are considering setting up a business in Singapore; congratulations. As you may already know, there are many benefits to doing so. You can take advantage of cheap Singapore company formation fees and low tax rates, not to mention the ease with which your company can access free trade agreements (FTA) with other countries.
However, before deciding on the best business structure for your needs, you must consider all of the implications associated with each option. That way, you will be able to make an informed decision. Here are things for you to think about:
- Ownership Restrictions
The first thing that should be considered is restrictions on ownership. All companies formed in Singapore must have at least one individual or entity resident in Singapore. However, they must also have at least one foreign owner who is interested in more than 25% of the company’s issued capital.
Ownership restrictions are not unique to Singaporean companies and are fairly common around most world jurisdictions. By being aware of them upfront, you can plan accordingly. It is important to note that there are no nationality requirements for directors or shareholders, so your initial thoughts on selecting a business structure should be quality rather than convenience. You may want to consider using a corporate service provider (CSP) since they will be able to assist with this process and provide valuable local knowledge regarding cheap Singapore company formation.
- Business Licenses and Permits
There is no ‘one size fits all’ solution here either. Before you consider cheap Singapore company formation, it is important to investigate the required licenses and permits. Again, this is where a CSP can be of assistance since they have the expertise to navigate you through these complex procedures fast – saving you time and money in the process.
- Your Target Market
Before deciding on your business structure, it is important to consider your target market for the product or service that you are planning to sell. Such considerations include currency controls, banking regulations, import/export restrictions, economic sanctions, and international trade agreements. By understanding potential legal restrictions that may affect your ability to operate in Singapore you will be able to make informed choices on how best to protect yourself from risk while capitalizing on opportunities at home and abroad.
- Your Company’s Annual Tax Liability
To make a sound business decision, it is important to consider your company’s annual tax liability. This factor will play a significant role in determining which type of structure would be most suitable for your needs. In addition, you should bear in mind the potential tax liabilities imposed on foreign shareholders that have an interest in your company. Being aware of these factors upfront will allow you to plan effectively while ensuring compliance at all times – avoiding costly penalties and legal action down the road.
- Confidentiality & Privacy
Finally, consider confidentiality and privacy issues before deciding on a particular Singaporean business structure since each type has different reporting requirements to various authorities. This will depend largely on the nature of your business activities and the countries in which you are likely to do business, as well as their respective laws regarding data protection.
If you already know what type of company you want to establish, make sure your CSP has experience with that specific structure. As mentioned before, a knowledgeable advisor can save you plenty of headaches down the road by helping you make informed decisions from the outset. In our experience, this is one area where businesses often struggle when they attempt to go it alone without professional support.