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Register Company in Singapore from India: A Green Pasture for Business Owners

Last modified: May 30, 2018
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Register Company in Singapore from India A Green Pasture for Business OwnersAccording to the World Bank Report 2018, India has improved its ranking in Ease of Doing Business indicator to 100. It is a remarkable leap from the previous ranking of 130. On the other hand, the report ranks Singapore at the 2nd position. Such a ranking means a lot to the smart entrepreneurs. It smells of a green pasture. And so, the city-state has attracted business owners to register a company in Singapore from India.

Starting a Business in Singapore

“How to register a company in Singapore?” is not a big issue once you decide to do it. The process for Singapore company registration process is streamlined and simple. And, if you are opting to register a company in Singapore from India, you will have to hire an incorporation services provider for it.

You, as an individual or a corporation, can use different business structures to register your businesses. Know about these deeply or pay heed to the advice of your services provider. It is important to choose the right legal structure, or it can hurt the future prospects of your business. You can choose from the following business structures:

Individual Business Owner:

  • Private Limited Company (Pte Ltd)
  • Sole Proprietorship
  • Limited Liability Partnership (LLP)

Corporate Business Owner:

  • Subsidiary Company
  • Branch Office
  • Representative Office

Singapore is a very competitive market. You, right from the word go, need to be ready with the business idea, business plans, marketing campaign, market surveys & research. You have to know your targeted customer to sell and generate revenue. Moreover, you must know that Singapore with the population of 5.7 million is not a large market.

Typically, Indian companies opt for a company set up in Singapore to do business in India. They then, register a subsidiary company in India. The subsidiaries then tap the Indian talent pool of professionals cost effectively.

The subsidiary pays the dividends to its parent Singapore company. The dividends are exempted from the tax as per the trade treaty between India and Singapore.

India’s Quest to Reform its Business Environment

Indian Government is on the war-path to improve its business environment. It has implemented reforms in 8 out of 10 Doing Business indicators. The rise in the ranking is mostly due to the improved handling of insolvency cases and shortening of the process of winding-up the loss-making companies.

Currently, India is placed 4th in the global ranking on Protecting Minority Investors and occupies the 29th place for Getting Electricity. However, it is placed at 164th position for Enforcing Contracts. The locals need 30 days to register a new business. They have to complete 12 procedures. On the other hand, the entrepreneurs need only two procedures for starting a business in Singapore in a couple of days.

India has achieved partial success in untangling itself from the Permit Raj. It has a long way to go in becoming an ideal marketplace for the local as well as global entrepreneurs. It still needs to trim the rules and streamline the regulations to facilitate easy mergers & acquisitions and initial public offerings. It is no wonder ambitious individuals are searching, “How can a foreigner start a business in Singapore?”

Singapore as a Business Destination

In the World Bank Report 2018, New Zealand managed to dislodge Singapore from the number 1st spot for Ease of Doing Business indicator. Singapore occupied it for the last decade years. However, nothing much has changed. The city-state is still a top investment destination for the investors.

Singapore is still an attractive marketplace for the business owners. They still want to opt for Singapore company setup and test a few of their business ideas. It really works for the Indian companies offering IT, gaming, social media, & mobile applications to the technophile population. They rely on it as a test-bed to prove their new products.

Singapore is an entrepot facilitating a huge amount of trade between the East and West. It has efficient harbors and serves more than 600 harbors spread throughout the world. There are some world-class companies to offer logistical solutions.

Singaporean authorities value the Intellectual Property and know the need to protect it from miscreants. They have strong Intellectual Property protection laws designed to protect business’ innovative ideas. It is a great deterrent for the copycats. It is one of the reasons why the city-state has attracted well-known research and development organizations from various fields to its shores.

Concessionary Tax Rates Under GTP, RHQ, & IHA Schemes

Singapore authorities run a very aggressive campaign to attract foreign corporate. They offer various concessions to make a new Singapore company registration worth their while. Indian companies too have benefited from these schemes after relocating their headquarters to Singapore.

The notable schemes are Global Trade Program (GTP), Regional Headquarters Award (RHQ), and the International Headquarters Award (IHA).

  • Under the RHQ scheme, the business owners get the concessionary tax rate of 15% on income from qualifying activities for three years. They can enjoy these benefits for the additional two years if they could meet the prescribed conditions.
  • Qualifying for IHA gets them even lower tax rates of either 10% or 5%. However, they have to exceed the criteria listed for the RHA by a large margin.
  • The global trader programme (GTP) offers incentives to the business owners preferring Singapore as their regional base. They can enjoy 10% or 5% concessionary tax rate on the qualifying income.

Treaties Conducive to Cross-Border Trade

In addition, more than 74 Double Taxation Agreements treaties (DTAs) that Singapore has in place helps them immensely in cross-border trade. This island nation further increases their market reach with the 41 Investment Guarantee Agreements and 21 Free Trade Agreements / Economic Partnership Agreements that it has signed with its trading partners.

Foreign Tax Credit Scheme (FTC)

Under the Singapore’s FTC scheme, the companies registered in Singapore also qualify for the tax credits if they have to pay taxes in India. Singapore corporate having a number of subsidiaries can benefit from FTC pooling and reduce their tax liabilities on the foreign remitted income.

Singapore Corporate Tax

Indian corporate tax ranges from 25%-29%. In addition, these companies have to pay a few other cess and surcharges.

Singapore has an undeniable advantage over India as its corporate tax ranges from 0%-17%. It also offers many other tax incentive, rebates, and exemption schemes which brings tax paid by the Singapore companies to 8.5%-9%.

Moreover, the Singaporean authorities supports its startups by exempting their initial chargeable income of up to S$100,000. Existing companies also get 30% of rebate in the corporate tax. The consumption of goods and services in Singapore is uniformly taxed at the rate of 7%.

A chance to rub shoulders with bigwigs, easy availability of finance, support to the startups, and affordable tax rates plays a great part in an entrepreneurs decision to register a company in Singapore from India. In addition, the country offers political stability, liberal taxes, world-class infrastructure, and pro-entrepreneur environment, communication networks, and reliable sea and air links to the outside world.

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