There comes a time where every entrepreneur, family trust or corporate entity take things back to the drawing board: this includes ample consideration as to their preferred tax and trade jurisdiction. Often this even involves economic migration, particularly when it turns out that a destination has a desirable combination of things that matter. When the co-founder of Facebook, Eduardo Severin, renounced his US citizenship in favour of moving to Singapore, many business owners started asking the question: Why Singapore? Well, besides being a sunny destination with friendly people that ranks exceptionally well on the human development index, there is something more to Singapore. It has a pro-business environment, a solid legal system and most of all, very competitive tax rates.
It is not to say that everyone would want to relocate to Singapore like Eduardo Severin and many other elites, but many still register a business there for tax purposes – some even open an AIPAC regional headquarters in Singapore to benefit from it’s location. Think about it this way: The same streamlined legal system, based on common law that gives peace of mind for those who prefer London and Sydney as their legal base can be found in Singapore where things like administrative law, contract law, equity and trust law, property law and tort law are based on common law. Most entrepreneurs are happy to know that English is sufficient for administrative purposes and there is no need for additional translations.
Formalities to get started in Singapore:
In most cases, legal incorporation in Singapore will be the first step. This may involve setting up a EPC (Exempt Private Company) that benefits from tax incentives or other more complex structures. Then, for compliance with basic statutory laws, you really want a simplified corporate secretarial solution. This lays the foundation for good corporate governance that can function at a global scale. From here on, financial accounting is the next step: in many cases this is done annually for compliance purposes, or in some cases, where intense and regular transactions occur, it is managed on a month to month basis. Whether or not should register for GST (general sales tax, which is their equivalent of VAT in other countries) is something your accountant can advise on.
There is in fact no need to hire a different consultancy service for each of the activities mentioned above. For example Sandhurst Consultancy Pte Ltd offers very competitive rates and an A to Z solution – which is all of these services under one roof.
Concluding thoughts on Singapore:
In terms of OECD compliance, Singapore is not considered a harmful tax jurisdiction. It has an excellent standing within the international community, notwithstanding the fact that tax rates are competitive – which is precisely with international entrepreneurs desire. It has been through a fine balancing act to become the sort of business and investment destination that is second to none, with a history of stability and a reliable reputation. If you are concerned about red tape and low competitiveness within the EU, Singapore in particular may be an excellent choice. Choosing the right consultants can speed up the process.