Setting Up an Offshore Company in Singapore

Are you considering setting up an offshore company in Singapore? Offshore companies, often incorporated in jurisdictions different from their principal place of operation, offer numerous advantages, including tax benefits, simplified reporting requirements, and more. In this useful guide, we’ll walk you through the process of establishing a Singapore offshore company, highlighting the key benefits and requirements.

Why Incorporate a Singapore Offshore Company?

1. Reduced Tax Liability: Singapore boasts a straightforward and low tax system. With low corporate and personal income tax rates, absence of capital gains tax, and no dividend tax, it’s an attractive destination for offshore companies. Foreign-sourced income received in Singapore that meets certain conditions is exempt from taxation. The corporate income tax rate is approximately 8.5% for profits up to S$300,000 and a flat 17% for profits above S$300,000.

   Moreover, a newly formed company benefits from a 0% tax rate on the initial S$100,000 of taxable income for each of its initial three tax filing years.

2. Credible Image: Singapore is renowned for its credibility and legal stature. Incorporating an offshore company in Singapore signals professionalism and credibility to stakeholders, including employees, bankers, and professionals.
3. Ease of Incorporation: Singapore is ranked as one of the world’s easiest places to do business. The registration process is quick, efficient, and free of bureaucratic red tape. With just two steps, company name approval and document submission, your Singapore offshore company can be incorporated in 1-2 days.
4. Liberal Foreign Ownership Policy: Singapore’s foreign ownership policy is open and liberal, with no restrictions on the permitted fields of business activity. You can have 100% foreign shareholding in all sectors, and there’s no need for prior approval from Singapore authorities.
5. Political Stability: Singapore is recognised as Asia’s most politically stable and least bureaucratic country. Its government is known for transparency, integrity, and a pro-business approach. The legal system is efficient, reducing risks associated with offshore company operations.

Incorporation Checklist for Singapore Offshore Companies

Before diving into the incorporation process, here’s a checklist of key requirements:

• Company Name Approval: Ensure your proposed company name is approved by the Company Registrar.
• Directors: Have at least one local resident director. Additional directors can be local or foreign individuals.
• Shareholders: You need a minimum of one shareholder, with a maximum of 50 allowed. Shareholders can be individuals or corporate bodies.
• Company Secretary: Appoint a local resident and qualified company secretary.
• Paid-Up Capital: Maintain a minimum paid-up capital of S$1 with no authorised capital required.
• Registered Address: Your company must have a local registered address, which can’t be a PO Box.
• Appointment of Incorporation Agent: Engage a professional firm for the registration process.

Post Offshore Company Formation

After incorporation, you’ll be provided with a Unique Entity Number (UEN), which is your new company’s standard identification number. Once your company is officially registered, additional documentation may be necessary for submission through an authorised filing agent.

This entire process is conducted online and can be completed electronically on the Singaporean government’s platform, BizFile+. Establishing an offshore company in Singapore mandates the possession of a digital identity, known as a SingPass, allocated to residents and citizens. This SingPass serves as the means to access and log in to the BizFile+ website.

1. Registration for GST: Depending on your business activities, your offshore company may need to register for Goods and Services Tax (GST) in Singapore. This step can also be facilitated by service providers.
2. Open a Business Bank Account: Singapore offers a wide range of reputable local and foreign banks. Services include multi-currency accounts, internet banking, credit cards, and more.Refer to our guide here.
3. Obtain Business Licenses or Permits: Certain business activities may require licenses or permits, and they should be obtained from relevant government agencies after company incorporation.
4. Registration for the Central Provident Fund (CPF): As an employer, you have an obligation to make CPF contributions on behalf of your employees who hold Singaporean citizenship or permanent residency.
5. Ongoing Compliance Requirements: Ongoing compliance and filing requirements, including year-end accounting and tax filing, must be met. Professional assistance can streamline this process.

Relocation to Singapore

While you can operate your Singapore offshore company from overseas, relocating to Singapore is an option. You may need an Employment Pass or Entrepreneur Pass, and assistance is available for work pass applications.

Summary

Establishing an offshore company in Singapore offers numerous benefits, including reduced tax liability, credibility, ease of incorporation, liberal foreign ownership policies, political stability, and sophisticated banking facilities.

By following the incorporation checklist and working with professional Singapore company registration providers, you can navigate the process smoothly and set up a credible offshore entity in this politically and economically stable environment.