Taxes, regulations, infrastructure, economic stability and reputation or perception are some of the main factors to consider when choosing a domicile to setup your business. Onshore or mid-shore companies are gaining more interest as offshore jurisdictions are getting more scrutiny after the impact of the Panama papers and other data leaks. Banks in general are making it more difficult for offshore companies to open accounts.
It is clear from many sources that the interest in onshore or mid-shore structures have risen in the past few years; and after the implementation of the automatic exchange of information and economic substance requirements on offshore jurisdictions.
- Singapore remains one of the most business-friendly countries in the world; in the World Bank's 2019 rankings for ease of doing business, Singapore took second place while Hong Kong was placed fourth.
- Singapore grants generous tax incentives and tax breaks for new and existing businesses.
- Singapore is one of the most favourable tax jurisdiction in the world with generous tax exemptions and incentives; and provides a vast network of Double Tax Avoidance treaties.
Factors to consider when evaluating and planning for the relocation:
- Assets: Evaluate the tangible and intangible assets of your business and examine the process by which you can transfer them to Singapore.
- Banking relationships: Establish new banking relationships in Singapore and then transfer your banking assets.
- Client relationships: You will have to introduce your clients to your new business entity and any branding issues that may arise.
- Supplier relationships: Likewise, you will have to introduce your new business entity to your vendors and suppliers.
- Contracts: Check whether contracts be reassigned to the Singapore company.
- Staff: Any staff relocation required.
- Office: Office or virtual office
- Shareholdings: Any shareholdings in public or private companies may have to be moved over, depending on the type of structure to be set up.
Possible business structures:
Establish a Singapore holding company
One can establish a new Singapore company that will be the holding company of your existing company (A). You can setup another Singapore company that will eventually become the operating company for your business in the long term after the transfer has been fully executed, and transfer of business activities such as supplier relationships, customer contracts, assets, etc from A to the Singapore operating company. Thereafter, all the shares of the operating company will be owned by the holding company.
The Singapore operating company will also be able to sponsor working visas for employees who will be relocated to work here.
Establish a Singapore subsidiary company
You can retain your company, and establish a Singapore company as its subsidiary. The subsidiary will be the operating company, have its bank account in Singapore. There is no withholding tax on dividends and capital gains. Using a Singapore operating company would be more tax efficient, and ensures the shareholders benefit more from their investments.
Inward re-domicilation to Singapore
Under the Companies (Amendment) Act 2017, foreign corporate entities are allowed to transfer their registration to Singapore instead of setting up subsidiaries (e.g. foreign corporate entities that may want to relocate their regional and worldwide headquarters to Singapore and still retain their corporate history and branding. There are minimum requirements and solvency criteria that must be met by the company. There are specified well-defined procedures for such a transfer.
Zetland provides a one-stop solution, who can partner with you to plan and relocate your business. For more information, you may contact Ms Su Lee Chan, Director of Zetland Singapore at firstname.lastname@example.org
or +65 6557 2071