When we hear "offshore zone", we have an association - "tax haven". Unfortunately, today there is a very low level of trust in companies established in the territory of classic offshore jurisdictions. Therefore, to do business, you need a country not only with low tax rates, but also with high prestige. We recommend that you pay attention to such an offshore zone as Singapore, which can be called a tax haven due to its flexible taxation system.
Singapore is a midshore zone with some offshore advantages
Singapore's popularity among the world's entrepreneurs is due not only to its flexible tax system, which we will discuss below, but also to its high prestige.
Thus, there is practically no bureaucracy in the country. This is the main difference between Singapore and many other countries, including the CIS. This became possible thanks to the developed e-government system. Even the registration of a company here is carried out remotely through a special service, subject to the availability of SignPass. If you do not have it, you can contact the services of the registrar, in particular, the specialists of the Offshore Pro Group.
Singapore has one of the lowest crime rates and a high standard of living, making the country an ideal place to relocate and start a business.
It is worth noting the high rate of the rule of law and the protection of intellectual property. In Singapore, in comparison with other countries of the world, the consideration of a case in court takes place in the shortest possible time. Thanks to a transparent and tough legislative system, investors, business owners and local residents can count on a fair resolution of the dispute.
Singapore's strategic location makes it attractive for international investment and the creation of a company that will operate in the emerging market of Asia. Moreover, the jurisdiction has been in the TOP-3 of the best countries for business for a long period.
The high level of education of the local population allows you not to worry about the possibility of problems with the search for personnel. Moreover, the government is implementing a program to retrain and improve the experience and knowledge of specialists in accordance with the latest trends in the labor market.
Singapore is a midshore zone with a flexible tax system
First of all, it is worth noting the quasi- territorial principle of taxation, which implies the payment of taxes only on income received in Singapore. The jurisdiction also has a single-tier tax collection system. This means that the company's dividends received by shareholders are not subject to taxation.
Yes, Singapore has a corporate tax of 17%. However, the government has developed many tax breaks and incentives to bring the tax rate down to zero.
For example like offshore companies in UAE, the country has a scheme to support young companies - start-ups. It provides for full exemption from taxation of the first 100 thousand SGD of annual income, 50% exemption for the next 200 thousand SGD, and everything over 300 thousand SGD is taxed at the full 17% rate.
In 2018, there is still a tax rebate of 50%, but not exceeding 20 thousand SGD.
There are many benefits and incentives for companies established in various areas of the country's economy, especially in the field of robotics and R&D. In particular, the PIC scheme, which implies the complete exemption of companies from taxation, provided that their profit for the year is 28 million SGD. International trading companies are also entitled to tax benefits. They are granted preferential tax rates of 5-10% for a period of 5-10 years, subject to the provisions of the Global Tradere scheme. Qualified offshore funds do not pay taxes on dividends, income and interest from traditional types of investments (from stocks, securities, bonds, deposits, etc.).
It is worth noting the flexible system of taxation of personal income. The tax rate varies depending on the amount of personal income from 0% to 20% (for amounts over 320 thousand SGD).
There is no capital gains, inheritance or wealth tax in Singapore.
There is no value added tax in the jurisdiction, but there is a goods and services tax that applies to goods and services supplied or imported into the territory of the state. The tax rate is 7%. It is charged not from the supplier company, but from the end buyer. Goods and services tax does not cover exported goods, international and financial services, sale and leasing of residential real estate.
It is worth noting the withholding tax, the amount of which depends on the type of payment of non-residents of the country:
However, dividends received by a resident company from a foreign source, profits from branches in other countries and the provision of services in the territory of other states are exempt from taxation.
For individuals who are non-residents, the withholding tax is 15%.
