Does Singapore Offers More Ease of Doing Business Than the Middle East?
The entrepreneurs operating in the Middle East have to face various problems. These include a high cost of incorporation, renewal of licenses, initial paid-up capital, and rent. Add to it the dicey political situation of the region and one cannot but applaud their persistence. Is there an alternative to these hardworking and optimistic individuals? Yes, there is! They can immensely benefit from the Singapore company incorporation.
Singapore is a Safe Haven for Your Investment
Singapore is well-known for the Ease of Doing Business that it offers. In 2015, it ranked first for this reason in the list compiled by the World Bank. It has grabbed the top rank for the last 9 years in a row.
Singapore offers political stability, latest infrastructure, skilled and talented workforce, lower tax rates, and most of all, pro-business environment. Following are few of the factors that can work in favor of the entrepreneurs, investors, and corporate from the Middle East.
- The tax rebates, incentives, and exemptions offered by the Singapore authorities bring the effective tax paid by the Singapore companies down to the range of 8.5% to 9%.
- The startup Singapore business benefits from a special scheme. The companies qualifying under the scheme enjoy tax-free profits of up to S$100,000 for the first 3 of their financial years.
- The existing companies qualify for the partial tax exemption scheme. They get a 30% rebate on the corporate tax payable. The rebate, however, is capped at S$30,000.
- Singapore has signed 41 Investment Guarantee Agreements, 21 Free Trade Agreements or Economic Partnership Agreements and as many as 74 DTAs (Double Taxation Agreements) with the countries from all over the globe.
- Because of the agreements, Singapore registered companies during the cross-border trade needs to pay tax only once. It saves administrative efforts too.
Pre-Requirement of Singapore Business Incorporation
- Minimum 1 shareholder
- Minimum initial paid-up capital of S$1
- At least 1 Company Secretary
- At least 1 Nominee Resident Director
- A local registered address for the company office
The process to forming a business in Singapore is a two-step procedure. You get the approval for the name of your proposed company from ACRA (Accounting and Corporate Regulatory Authority) and then apply to the same agency to register your business.
With the assistance of Singapore incorporation services like SBS Consulting, one can set up a company in Singapore in 1 – 3 days.
Doing Business in GCC Countries
Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, and the United Arab Emirates are members of the Gulf Co-operation Council (GCC). Doing business in GCC countries is a tough challenge. It is especially true for the small businesses. They are simply buried under the exorbitant fees levied by the governments.
- Against the cost-effective Singapore company setup, it takes USD5000 in Bahrain and USD15000 in Saudi Arabia to register a business.
- It takes on an average USD10000 to renew business registration annually
- The initial paid-up capital that the entrepreneur must arrange is USD15,000
- For each branch, the businesses have to pay approximately USD10,000 in government fees
- The rental rates of commercial properties are high
Shift Your Business to Singapore
Most of the GCC countries are attracting investors. They are also open to the 100% foreign ownership under certain circumstances, and ranks high in the Ease of Doing Business indicator.
However, the Arab Spring and the mixed results delivered by the policies aimed at moving away from the oil-based to the balanced growth have shaken investors’ confidence. These countries spent heavily to negate the effects of financial crisis and the developments because of the Arab Spring. The experts think such measures are unsustainable in the long term and hardly constitute a solution. It has made the investors a bit hesitant.