There are several reasons why foreign companies prefer setting up a business in Singapore. Some do it for the wonderful business infrastructure while others do so for the number of growth opportunities available in the country. Few foreign entrepreneurs prefer the ease of doing business in Singapore & there’s some who register a company in the country as it makes it simpler to target the whole Asia-Pacific region from Singapore. Whatever may be the reason for a foreign entrepreneur to setup a presence in Singapore, the country’s liberal & simplistic taxation regime is always of the key factors that make foreign company owners take the final plunge in to doing business in Singapore.
Singapore believes in having a taxation process that is simple, simple to understand & simultaneously is a win-win situation for both businesses in the country & the economy of Singapore. In the work of the global economic recession when most countries on https://myfinancesg.com/ were trying to introduce new taxes or increases the existing tax rates to meet their public funding requirements, Singapore actually lowered its overall corporate tax rate to only 17 percents. This was done to be definite that businesses in the country had money to manage their business & not must worry about paying high taxes. By lowering taxes, Singapore attracted several thousand companies to its shore & thereby increasing the general tax collection by the concerned authorities.
Singapore’s taxation organization also believes in a single tax & not having multiple tax burdens of businesses. Therefore apart from the standard corporate tax of 17 percent, there’s no other tax in Singapore. Companies do not even must pay taxes on capital gains or dividends distributed to share holders. Singapore also has bilateral taxation treaty with several countries from around the globe to keep away from double taxation situation for companies based in the country. Singapore does not even tax foreign sourced income if that income is not deemed to be remitted to Singapore.
Apart from an already low corporate tax rate, Singapore also offers plenty of tax incentives to lower the taxation burden of a company. For example, for new startups there’s no taxes for income up to SGD $100,000 for each of the first years they are in operation. Also for income up to SGD $300,000, companies must pay a confessional tax rate of only 8.5 per-cent. Each year, Singapore also introduced special tax schemes for specific industries or tax breaks for expenses related to things like research & development etc.
