A Foreigner’s Guide to Setting Up a Company in Singapore from Hong Kong
Today, our world is a global economy. It is not unusual for individuals in Hong Kong to think about company incorporation in Singapore.
However, the question is, “How easy it is?”
Well! It is pretty easy to form a Singapore company. You can actually do it in 1-3 days without any hassles.
You need to fulfil following pre-incorporation criterion to set up a company in Singapore from Hong Kong:
- At least 1 shareholder
- At least 1 local director
- At least 1 company secretary
- Minimum initial paid-up capital of S$1
- Registered office address
- Company name approved by ACRA
Approved Company Name
You need to visit ACRA’s BizFile+ portal and check the availability of the name of your proposed company. You need to register it with ACRA for your use for 60 days. If it contains terms like ‘casino’, ‘finance’, ‘media’, ‘education’, ‘security,’ the approval may get delayed and may take up to 2 months.
Register the Right Business Structure
A foreigner can choose from the following business structures:
- Sole Proprietorship
- Limited Liability Partnership (LLP)
- Private Limited Company (Pte Ltd)
Research the business structures thoroughly as your choice can affect your company’s taxation and benefits.
Relocate to Singapore
No! There is no need for you to relocate to Singapore after forming your business. You can control its activities from your home in your country or anywhere else.
However, if you choose to relocate to Singapore, you can do so. You will need a work visa for it. Acquiring an EntrePass will enable you to relocate to Singapore and work as the local director of your company.
You can also work in Singapore on Employment pass. However, you will need to appoint a local director for your company. You will also need to pay yourself a salary that is appropriate for your experience.
After starting your business activities and letting the dust to settle you can choose to bring your family to Singapore using Dependant Pass. Depending on your needs, you can also explore other work visas like LTVP for the purpose.
You need to open a corporate bank account for your company to streamline its finances. You will need to be physically present at the time. You may also need to take shareholders and directors along with you.
Hire Employees in Singapore
You do not have to hire employees in Singapore for your new company, apart from a resident director and corporate secretary. If you can cope up with the demands of your business on your own, do so. Later on, you can hire employees to expand your business activities. A foreigner can open a business in Singapore without a single employee there.
Cost of Forming a Company in Singapore
You need to accomplish 2 steps to set up your Singapore company. In the first step, you take approval for your company name from ACRA. It costs S$15. And in the second step, you pay S$300 to register your company with ACRA.
However, you, as a foreigner, cannot self-register a company in Singapore. Hire a professional firm to manage the incorporation process for you. Depending on the incorporation package you choose, you will have to pay for company registration, name approval, corporate secretary, and registered local address.
Business Licenses and Permits
If you need business licenses and permits to start your business activities, that will be an added cost. And depending on your industry and needs, it will vary.
Singapore Taxes You Will Need to Pay
In Singapore, you pay company income tax and personal income tax on locally generated income. The income received from outside of Singapore may also be taxed.
Corporate Tax: You pay corporate tax on the income generated in the preceding financial year. The current rate is in the range of 0%-17%. For the majority of companies, the effective tax rate is as low as 8%-9% because of the tax exemptions, benefits, incentives, and deductions they get.
Personal Income Tax: Singapore personal income tax ranges from 0%-22%. You don’t need to pay any tax on capital gains like dividends.
GST: When your turnover is over S$1million, you will need to register your business for GST and collect 9% of GST from your clients and pay it to IRAS.
How Much Tax Do I Pay to Hong Kong Government?
Hong Kong also charges territorial-based tax. And, you will not have to pay any tax to the Hong Kong government on the income generated in Singapore.
Singapore Tax Exemption
Startup Tax Exemption Scheme
Singaporean authorities support new companies by offering them tax exemptions. You can take advantage of the startup tax exemption scheme for the first three years. Under this scheme, you get to enjoy:
- At least 1 shareholder
- 75% tax exemption on first S$100,000 nominal taxable income
- 50% tax exemption on S$100,001-S$300,000 of nominal taxable income
- 17% of the flat tax rate on income above S$300,000
Partial Tax Exemption
Starting from the 4th year, you can claim Partial Tax Exemption. You can claim:
- At least 1 shareholder
- 75% of tax exemption on the first $10,000 of chargeable income
- 50% tax exemption on the next, $190,000 of chargeable income
You will need to appoint a reliable registered filing agent like SBS Consulting Pte Ltd to form your Singapore company. Check out our promotional incorporation package that comes with freebies. It will assist you in keeping your initial incorporation cost down. If you have any questions related to company incorporation in Singapore, do not hesitate to call us on +65-6536 0036 or email us at firstname.lastname@example.org for the answers.