How to Incorporate a Singapore Company
In an effort to draw international corporations and encourage native entrepreneurs, the Singapore government has passed a couple of company regulations that provide tax exemptions and bankruptcy coverage for corporations.
The following is a list of advantages of a Singapore Company Incorporation:
- The business is treated as a separate legal entity from its shareholdersWith this arrangement, a corporation can enter a contract, acquire a property, and purchase supplies under its name. And because the business is treated like a real person, it is usually named in a lawsuit instead the company officials or shareholders (who are too many to mention).
- Shareholders enjoy limited liabilityLimited liability means that the personal assets (such as houses, cars, and properties) of each shareholder are protected from debts, losses, and liabilities related to business. This means that in case of bankruptcy, only the business assets can be liquidated and not the personal assets.
- Continuous existenceThe corporation will continue its existence even if one or more shareholders die or some board of directors and officials leave the company. This is not the case for the sole proprietorship in which it will cease its existence once the owner dies.
- Capital incentivesCorporations that have opened their shares to the public can provide the key employees with incentives and bonuses through ownership. With this arrangement, the employees will most likely stay in the company and will be encouraged to maximize their productivity.
- Easy to raise fundsCorporations can raise more funds for expansion without having to loan from the banks that is usually associated with high interest rates. By making their ownership open to the public, they can raise capital which can be used for business expansion.
- Tax benefitsFor corporations which remain “private”, they can enjoy zero tax on the first $S100,000 chargeable income within the first three years of incorporation. Another 50 percent tax exemption is awarded on the next $S200,000 income.
- Efficient operational structureShareholders have the right to appoint a board of directors whom they think have the capability and knowledge to run a business. After the voting process, the directors will then select among themselves on who will be the secretary, CEO, vice president, treasurer, etc.
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AsiaBiz provides Singapore Company Incorporation services and has successfully helped foreign and local entrepreneurs wishing to start a Singapore company.
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