Company Incorporation Singapore: Pros & Cons of Start-up Ecosystem
Over the last couple of decades, Singapore has grown into a well-known financial hub. It has come up as the ideal destination company incorporation in Singapore and a test-bed for startup ventures. It has proven itself as a melting pot for individuals from all over the globe.
Singapore’s dynamic and supportive business environment and financial infrastructure make the island nation opens opportunities for the business owners. The startup ecosystem of Singapore is predominantly known for its diverse nature and economic prominence. It is the best startup system in South-East Asia.
This blog will outline the pros and cons of this startup ecosystem and how it will benefit your company incorporation Singapore.
Singapore: A Gateway to World-Class Business Environment
Here is a list that emphasizes why entrepreneurs and investors from all across the world consider Singapore as an excellent location for starting their business.
- Ease of Doing Business: Rated 2nd best place for ease of doing business by World Bank report 2020.
- Richest Country (GDP): the Third wealthiest country in the world as per the Forbes Magazine.
- Corruption Perception Index: Singapore is 4th least corrupt country in the world.
- Intellectual Property Law: Singapore ranked fourth in the world and top in Asia for offering the best IP protection in the World Economic Forum’s Global Competitiveness Report.
- Global Finance Center: Singapore is 3rd ranked Global Finance Center.
- Quality of Life: Singapore ranks 2nd in Asia for the quality of life.
Additional factors, like progressive tax regime, state-of-the-art infrastructure, competitive and multilingual workforce, and supportive government policies, contribute to the republic’s reputation of having one of the best startup ecosystems in the world.
Startup Ecosystem of Singapore
Capital or funding, infrastructure, and resources are integral to the survival and growth of a startup. And, Singapore can offer all these key elements to empower the young and new entrepreneurs. In this line, the role of government cannot go unnoticed.
The extensive support from the government to build a healthy and vigorous startup ecosystem has apparently made an impact. In the beginning, the government started the initiatives through financing programs and incentives.
But in later years, its policies have become more refined and prominent with the introduction of various startup events, accelerators, and incubator programs. Today, Singapore’s vibrant startup system is ranked 16th in the 2020 Global startup ranking.
Key Facts of Singapore Business Environment
- The process for company incorporation in Singapore can be initiated online.
- Normally, a company can be registered in just 1-3 days.
- It is open to both local and foreign individuals over 18 years of age.
- ACRA’s fee for registering a company name is $15, and it charges $300 for incorporating a company.
- Quick and fuss-free process for starting a company. It is simple without any bureaucratic red-tape
- Singapore is the global leader in hosting foreign subsidiary companies.
- The headline rate of Singapore corporate income tax is 17%.
- Personal income tax ranges between 0-22%.
- No taxes on capital gains, dividends, and inheritances.
- It has an extensive network of Double Tax Avoidance (DTA) treaties with more than 90 countries.
- The tax exemption scheme for startups supports them in their initial years.
Pros of Singapore Startup Culture
A newly incorporated Singapore company can benefit from the conducive business environment, state-of-the-art infrastructure, progressive tax system, the absence of bureaucracy, protective legal environment, and competitive workforce.
Also, there are some powerful and positive features of Singapore, which have transformed the startup ecosystem into a vibrant one. Discover those advantages hereunder:
Financial Assistance: The government has rolled out many initiatives and programs to enable new entrepreneurs to gain access to capital or funding. These funding initiatives include:
- Cash grants
- Government-backed equity financing schemes
- Incubator schemes
- Debt financing schemes
Singapore startups can raise funding to execute their business plan through programs like ACE startups scheme, iStart- ACE Scheme, and iSPRINT.
Tax Exemption Scheme for Startup: Singapore local startups get 75% of tax exemption on their first $100,000 taxable income and next $200,000 gets 50% of exemption. they can benefit from the scheme for their first 3 years. All qualifying Singapore-based startups can avail of the benefit.
Easy Company Registration Process: The Company Registrar of Singapore, i.e. ACRA, has laid down incredibly simple and business-friendly rules. For instance, the Singapore company incorporation process takes 1–3 days to complete.
ACRA has made available an online portal called BizFile+, which makes the process easy, prompt, and user-friendly. However, ACRA (Accounting & Corporate Regulatory Authority) advises foreigners to appoint the professional registered filing agents. These providers of company incorporation services in Singapore assist them in completing the process hassle-free.
Cons of Singapore Startup Environment
Before embarking on company incorporation Singapore, you must be well aware of both strong and weak points of its startup ecosystem.
When you dive a little deeper, you may come across a few cons of starting a company in Singapore. These include,
- Tight labor market
- High workforce costs
- Increasing competition
- Dependence of Singapore on the trade economy
- High rental costs for the businesses
Hire the right agent for your company incorporation in Singaporean. Do not let the odds or cons ruin your dream of entrepreneurship. Focus on and leverage the advantages of Singapore’s startup ecosystem and take the final plunge in the most vibrant economy in South East Asia.