Singapore – Ready Made Shelf Companies – Company Formation

Singapore, officially the Republic of Singapore, is a sovereign city-state and island country located in maritime Southeast Asia. Singapore lies about one degree of latitude (137 kilometres or 85 miles) north of the equator. The country’s territory, which is archipelagic, is composed of one main island, 63 satellite islands and islets, and one outlying islet.

The 1819 establishment of a British East India Company trading post on the main island marked the genesis of modern Singapore. During the Second World War, Imperial Japan invaded and annexed Singapore. In 1945 Singapore was returned to British control. In 1965 Singapore regained independence, to become a high-income economy and developed country within a single generation.

Singapore is a unitary parliamentary constitutional republic with a unicameral legislature that has been characterised by dominant-party rule since independence. It is considered a soft authoritarian technocratic state. The country is home to 5.6 million residents. The country, which is Anglophone, has four official languages: English, Malay, Chinese, and Tamil; Malay, as the ancestral language of the country, is accorded protected status in the country’s constitution as the national language, while English is the lingua franca, being spoken as a common tongue by the vast majority of Singaporeans.

Singapore is one of the five founding members of ASEAN, is the headquarters of the Asia-Pacific Economic Cooperation (APEC) Secretariat and Pacific Economic Cooperation Council (PECC) Secretariat, is a member of the United Nations, World Trade Organization, East Asia Summit, Non-Aligned Movement, and the Commonwealth of Nations. Singapore is also a popular tourist destination, with well-known landmarks such as the Merlion, Marina Bay Sands, Gardens by the Bay, the Jewel, the Orchard Road shopping belt, the resort island of Sentosa, and the Singapore Botanic Gardens, the only tropical garden in the world to be honoured as a UNESCO World Heritage Site.

The official currency is Singapore dollar (SGD).The legal system of Singapore is based on the English common law system. Major areas of law – particularly administrative law, contract law, equity and trust law, property law and tort law – are largely judge-made, though certain aspects have now been modified to some extent by statutes. However, other areas of law, such as criminal law, company law and family law, are almost completely statutory in nature.

New start-up companies are eligible for the Start-up Tax Exemption (SUTE) scheme. To qualify for Start-up Tax Exemption (SUTE) the company must have no more than 20 individual shareholders; for corporate shareholders, one individual must hold at least 10% of the issued shares; property and investment holding companies are not eligible.
Full Exemption for New Startup Companies is for first 3 years of assessment. The effective tax rates are from 3.18% (for income to S$100K), up to 16.64% (for income > S$10M).

Double taxation

Singapore has more than 80 agreements in place with other nations to avoid double taxation on investments overseas.

The economy of Singapore is a highly developed free-market economy and it has been ranked as the most open in the world, 3rd least corrupt, most pro-business, with low tax rates (14.2% GDP) and has the third highest per-capita GDP in the world in terms of purchasing power parity (PPP).

State-owned enterprises play a substantial role in Singapore’s economy. The Singaporean economy is a major foreign direct investment (FDI) outflow financier in the world. Singapore has also benefited from the inward flow of FDI from global investors and institutions due to its highly attractive investment climate and a stable political environment.

Exports, particularly in electronics, chemicals and services including Singapore’s position as the regional hub for wealth management provide the main source of revenue for the economy, which allows it to purchase natural resources and raw goods which it lacks.

Singapore could thus be said to rely on an extended concept of intermediary trade to entrepôt trade, by purchasing raw goods and refining them for re-export, such as in the wafer fabrication industry and oil refining. Singapore also has a strategic port which makes it more competitive than many of its neighbours in carrying out such entrepot activities. Singapore’s trade to GDP ratio is among the highest in the world, averaging around 400% during 2008–11. The Port of Singapore is the second-busiest in the world by cargo tonnage.

To preserve its international standing and further its economic prosperity in the twenty-first century, Singapore has taken measures to promote innovation, encourage entrepreneurship and re-train its workforce. The Ministry of Manpower (Singapore) (MoM) is primarily responsible for setting, adjusting, and enforcing foreign worker immigration rules. There are approximately 243,000 foreign domestic workers (FDWs) in Singapore.

The politics of Singapore takes the form of a parliamentary representative democratic republic whereby the President of Singapore is the head of state, the Prime Minister of Singapore is the head of government, and of a multi-party system. Executive power is exercised by the cabinet from the parliament, and to a lesser extent, the President. Cabinet has the general direction and control of the Government and is accountable to Parliament. There are three separate branches of government: the legislature, executive and judiciary abiding by the Westminster system.

Legislative power is vested in both the government and the Parliament of Singapore. The legislature is the parliament, which consists of the president as its head and a single chamber whose members are elected by popular vote. The role of the president as the head of state has been, historically, largely ceremonial although the constitution was amended in 1991 to give the president some veto powers in a few key decisions such as the use of the national reserves and the appointment of key judiciary, Civil Service and Singapore Armed Forces posts. They also exercise powers over civil service appointments and national security matters.

Singapore is one of the leading financial centers of the world and a major distribution hub of finance in Southeast Asia. No wonder, therefore, that the country has created one of the most advanced banking systems in the world, numbering about 700 local and foreign banks and financial institutions that provide services ranging from consumer banking and asset management to the stock exchange, investment banking and specialised insurance services.

Activities of commercial banks licensed in Singapore are subject to the Banking Act. Commercial banks may engage in all possible types of banking activities. In addition to providing commercial banking services, including deposit-taking, lending and checking operations, banks may also engage in any other kind of banking business, which is regulated or permitted by Monetary Authority of Singapore (MAS), including consulting services in finance, brokerage services in the field of insurance and capital market placement services.

Commercial banks and their representatives do not necessarily need a separate license for such activities, but must comply with the code of conduct in its business activities prescribed in the Act on Financial Advisors (IA) and the Law on Securities and Futures Act (SFA), respectively. Currently, in Singapore operate over 100 commercial banks. Six of them are registered at the local level and are owned by three local banking groups. Commercial banks can operate as banks, providing the full range of services, wholesale banks or offshore banks.