Singapore is well known for its pro-business environment. The government has implement various policies to attract foreign companies or foreign entreprenuers to set up the company in Singapore. One of the many advantages is by allowing company to be fully own by a foreigner.
If you are a Foreign Entrepreneur in Singapore and planning to establish a business there, here are few things to take note.
Individual Tax Rate for Non-Resident – Director
Singapore’s individual income tax rate for resident taxpayer are progressive which is based on the annual income received. The tax rates ranges from 2% to 22%depending on the income level. The higher income earner will pay higher tax.
However, for non-resident taxpayer (director), the tax rate will be at 22%. Company are required to withhold the tax at 22% and notify IRAS through the tax portal. The withholding tax has to be pay by the 15th of the second month from the date of payment to the director. This applies to all forms of income (salary, bonus, director’s fees, accommodation, gains from stocks and shares, and other payments)
The director do not required to file a separate tax return as the employer has already withheld the tax and submitted to IRAS.
Corporate Tax Rate
Every company are require to submit its tax return to IRAS latest by 15 December each year. The prevailing corporate tax rate is 17%. To support new start-up companies, the government has implement tax exemption scheme for the first three consecutive year of assessment. Companies can enjoy tax exemption up to $125,000 for the chargeable income of $200,000 on each year of assessment.
Generally dividend are declare at the annual general meeting whereby the financial statements of the company is presented to the members. The director are responsible on the declaration and payment of the dividend. Base on the financial performance, dividend can only be declare and distribute to the shareholders within the retain earning of the company.
Under the one-tier corporate tax system in Singapore, the dividend paid by a resident company will be exempted from tax.
Relocating to Singapore
It only make sense to establish a company in Singapore if you are able to control and manage the company yourself. Therefore there are several options to enable you to stay in Singapore for a period of time.
Employment Pass: Director are consider an employee of the company. Foreign director can apply for employment pass which is similar to a work pass. However, the approval of an employment pass has higher criteria to fulfil compare to work permit or SPass. Some of it are, the applicant’s academic qualification is at least a university degree or similar professional level and the minimum monthly salary is $3,600.
Entry Pass: This work pass is intended for serial entrepreneurs, high-calibre innovators or experienced investors that want to operate a business in Singapore. You need to be either an innovator or investor. To apply for the pass, you will need to meet any of the following criteria.
- The business is funded from a government-recognised venture capitalist or business angel
- Is an incubate at a government-recognised incubator or accelerator
- Has significant business experience or network
- Holds an intellectual property (IP) which delivers competitive advantage to the proposed business in Singapore which is difficult to replicate.
- Has a research collaboration with an Institute of higher learning or research institute in Singapore
- Has extraordinary achievements in your domain expertise related to your proposed business.
- Has good track record of investing in business and willing to invest and drive the growth of highly scalable business in Singapore.
Global investor programme: The GIP is administered by the division of the Economic Development Board – Contact Singapore, that provide advisory to foreign entrepreneurs and business owner who are keen to relocate to and invest in Singapore.
If you are planning to relocate to Singapore and you have sufficient funds to invest, you could consider using the GIP Scheme to acquire your PR status directly. There are two options under the scheme.
- Option A: Invest at least S$2.5 million in a new business start-up or expansion of an existing business operation.
- Option B: Invest at least S$2.5 million in a GIP-approved fund that invests in Singapore-based companies.
To be eligible for the GIP scheme, you will need to have substantial business track record and successful entrepreneurial background.
One of Ace Success core services is to provide advisory and support foreign entrepreneur to set up a company in Singapore. Collectively accumulate years of experience, our professional team are here to assist you in complying with the regulations and back office process. Contact us or Call us at +65 6686 4882 to find out more.
At Ace Success, we aim to be a one-stop service provider for all your corporate needs in Singapore. Our range of services include Company Incorporation in Singapore, Accounting, Annual Compliance, Corporate Secretary, Corporate Tax, Individual Income Tax, Business Solutions, Nominee Director, GST Registration, Auditing and Cloud Accounting.
We adopt a straightforward approach to cater to your business needs. We are dedicated to understanding your current back-end business process and strive towards achieving the best suited solutions. Get in touch with us to know more about our services.
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