Offshore Company Singapore: A guide for business success
If you want to know the ins and outs of establishing an offshore company in Singapore, you’ve landed on the right page.
Singapore’s tax system is favorable for residents and non-residents alike. There are no restrictions on the types of industries allowed, and 100% international shareholding is also permitted. As one of the top global destinations for an offshore company,
Singapore has a reputation for its transparent and efficient legal framework, making it an ideal choice for astute entrepreneurs. But what exactly constitutes an offshore company, and why should it pique your interest? Let’s dive in!
What is an offshore company in Singapore?
If you’re looking to expand your business internationally, you’ve probably heard about the benefits of setting up an offshore company in Singapore.
But what exactly is an offshore company? An offshore company is a business entity incorporated in a jurisdiction different from where its main operations or investors are located.
In other words, it’s a company that’s registered in a country other than where it primarily does business.
Definition of an offshore company
Singapore offshore companies are exempt from paying taxes on profits earned outside of Singapore, as long as they comply with services tax regulations. That’s a huge advantage for businesses looking to minimize their tax liabilities. But the benefits don’t stop there. Incorporating an offshore company in Singapore also offers:
- A stable and business-friendly environment
- Strong intellectual property protection
- Access to sophisticated banking facilities
- A simple and straightforward incorporation process
Benefits of incorporating an offshore company in Singapore
Singapore is one of the best global destinations for an offshore company. Why? For starters, Singapore offers a host of tax benefits and exemptions for offshore companies.
There are no capital gains or dividend taxes. But it’s not just about the tax advantages. Singapore also has a liberal foreign ownership policy, allowing 100% foreign ownership of companies in most sectors.
This makes it easy for international businesses to set up shop in Singapore without having to navigate complex ownership restrictions.
Types of offshore companies in Singapore
Now, let’s explore the different types of offshore companies you can set up in Singapore. The most common types are:
- Subsidiary company
- Branch office
- Representative office
A subsidiary company is a separate legal entity from its parent company, with its own assets and liabilities. A branch office, on the other hand, is an extension of the parent company and does not have a separate legal status.
A representative office is a temporary setup used for market research and liaison activities, but cannot engage in any commercial transactions. The type of offshore company you choose will depend on your business goals and activities.
But regardless of which type you choose, setting up an offshore company in Singapore can provide a range of benefits for your business.
We have prepared a guide for you to read on registering a subsidiary company vs Branch office.
Advantages of setting up an offshore company in Singapore
Advantages of running an offshore company in Singapore are significant. From the tax benefits to the ease of doing business, Singapore has proven to be an ideal location for many entrepreneurs around the world.
1. Tax benefits and exemptions
One of the biggest advantages of setting up an offshore company in Singapore is the tax benefits. Singapore has a progressive tax system, with corporate tax rates ranging from 0% to 17%. But for offshore companies, there are even more tax exemptions and incentives available.
For example, Singapore offshore companies are exempt from paying taxes on foreign-sourced income. This means that if your company earns income from outside of Singapore, you won’t have to pay Singapore corporate tax on that income. Additionally, there are no capital gains or dividend taxes in Singapore.
2. Liberal foreign ownership policy
Another major advantage of incorporating an offshore company in Singapore is the country’s liberal foreign ownership policy.
In most sectors, foreign companies can own 100% of their Singapore subsidiary or branch office. This makes it easy for international businesses to set up shop in Singapore without having to navigate complex ownership restrictions.
3. Sophisticated banking facilities
Singapore is known for its world-class banking facilities, and this is a huge advantage for offshore companies.
The country has a strong and stable banking system, with a wide range of international banks operating in the country. This makes it easy for offshore companies to access sophisticated banking services, such as multi-currency accounts and international wire transfers.
4. Political stability and business-friendly environment
In addition to the tax and banking advantages, Singapore also offers a stable and business-friendly environment for offshore companies.
The country has a strong rule of law, with a transparent and efficient legal system. This provides a level of certainty and predictability for businesses operating in Singapore. Moreover, Singapore consistently ranks as one of the easiest places in the world to do business.
The country has streamlined bureaucratic processes, making it easy to set up and operate a company in Singapore.
5. Protection of intellectual property
Finally, Singapore provides strong protection for intellectual property rights. The country has a robust intellectual property regime, with laws and regulations that are in line with international standards. This is particularly important for businesses in industries such as technology, pharmaceuticals, and creative industries, where intellectual property is a key asset.
Requirements for incorporating an offshore company in Singapore
Now that you know the advantages of setting up an offshore company in Singapore, let’s analyse the requirements for incorporation.
Appoint a resident director
One of the key requirements for incorporating an offshore company in Singapore is the appointment of a resident director. The resident director must be a Singapore citizen, permanent resident, or hold a valid work pass.
This requirement ensures that there is a local point of contact for the company, and that the company complies with Singapore’s laws and regulations. If you don’t have a suitable candidate for the resident director position, you can appoint a nominee director.
Engage a qualified company secretary
Another requirement for incorporating an offshore company in Singapore is engaging a qualified company secretary. The company secretary is responsible for ensuring that the company complies with Singapore’s corporate laws and regulations, including filing annual returns and maintaining statutory registers.
The company secretary must be a natural person and a Singapore resident. If you don’t have a suitable candidate for the company secretary position, you can explore Sleek for company secretarial services.
Get a registered local address
All Singapore companies, including offshore companies, must have a registered local address. This address must be a physical address in Singapore, and cannot be a PO box.
The registered address is where official correspondence from government agencies will be sent, and where statutory registers and records will be kept. If you don’t have a physical office in Singapore, you can use the address of your corporate service provider as your registered address.
Minimum paid-up capital requirement
Finally, there is a minimum paid-up capital requirement for incorporating an offshore company in Singapore.
The minimum paid-up capital is S$1, which must be deposited into the company’s bank account upon incorporation. While this capital requirement is low, it’s important to note that the amount of paid-up capital can affect the company’s credibility and ability to secure funding or contracts.
Therefore, it’s recommended to have a higher paid-up capital that is commensurate with the company’s business activities and goals. In conclusion, incorporating an offshore company in Singapore can provide a range of benefits for businesses looking to expand internationally.
From tax benefits to a business-friendly environment, Singapore offers a compelling proposition for offshore companies. However, it’s important to ensure that you comply with all the requirements for incorporation.
Key takeaway:
Setting up an offshore company in Singapore lets you enjoy big tax breaks, own your business 100%, and tap into top-notch banking—all in a stable, welcoming place for businesses. Just make sure to meet the local rules like appointing a resident director and getting the right address.
Opening a bank account for your Singapore offshore company
Singapore is a world-class financial hub. That means offshore companies have their pick of reputable banks to work with. The banking system in Singapore is known to be incredibly robust and efficient. It’s a big reason why this country consistently ranks as one of the best places to do business.
Choosing the right bank for your offshore company
With so many great options, how do you choose the right bank for your offshore company? Consider factors like:
- Range of services offered (multi-currency accounts, online banking, credit facilities)
- Fees and minimum balance requirements
- Ease of account opening process
- Bank’s reputation and financial stability
Some popular choices for offshore companies include DBS, OCBC, and UOB. These local banks have a strong presence and deep understanding of the Singapore market.
Required documents for opening a bank account
Once you’ve selected a bank, it’s time to gather the necessary documents for opening a corporate account:
- Certified copy of company incorporation documents
- Proof of business address
- Identification documents for directors, shareholders, and authorized signatories
- Business profile and activity description
The exact requirements may vary slightly between banks. It’s best to check with them directly or consult with a corporate services provider.
Benefits of having a Singapore corporate bank account
Having a corporate bank account in Singapore brings several advantages:
- Lends credibility to your offshore company
- Provides access to secure and efficient banking facilities
- Allows for easy international transactions and fund transfers
- May offer perks like multi-currency accounts and attractive interest rates
A Singapore corporate bank account is an essential piece of the offshore company puzzle. It streamlines financial management and opens up a world of opportunities.
Managing your Singapore offshore company
Running an offshore company in Singapore is relatively straightforward. But there are some key compliance matters to stay on top of.
Appointing a nominee director
If your offshore company doesn’t have a locally-resident director, you’ll need to appoint a nominee director. This is a common service provided by corporate service firms in Singapore.
The nominee director helps fulfill the legal requirement while the actual business owners maintain control. Some key things to note:
- Nominee directors should be reputable and properly screened
- They do not have executive powers or involvement in day-to-day operations
Business owners can replace the nominee director anytime
You need a reliable service provider to appoint a nominee director and incorporate your business in Singapore. Speak to friendly experts at Sleek – they will guide you and help you fulfil your nominee director requirements legally and efficiently.
Annual compliance requirements
Singapore offshore companies must adhere to annual compliance requirements, including:
- Holding an Annual General Meeting (AGM)
- Filing Annual Returns with ACRA within 30 days of the AGM
- Maintaining proper books of accounts
- Preparing and filing annual tax returns
While the requirements are not overly burdensome, it’s crucial to stay on schedule to avoid penalties. We recommend keeping a compliance calendar and working with a qualified corporate secretary.
Maintaining proper records and bookkeeping
Proper record-keeping is a must for any Singapore offshore company. This includes:
- Minutes of meetings and resolutions
- Register of directors, shareholders, and charges
- Accounting records like invoices, receipts, and bank statements
Not only is this a legal requirement, but it also helps you stay organized and make informed business decisions. Cloud-based accounting software can streamline the process, and it’s also something the team at Sleek can provide with or without an accounting package.
Maximizing the potential of your Singapore offshore company
A Singapore offshore company opens up a world of possibilities. But it’s up to you to seize the opportunities.
Expanding your business operations
Singapore’s strategic location and pro-business environment make it an ideal launchpad for regional expansion. Some avenues to explore:
- Setting up a physical office or branch in Singapore
- Hiring local talent to tap into their expertise and networks
- Partnering with Singapore-based companies for joint ventures or projects
Many offshore companies have successfully used Singapore as a springboard into the lucrative Southeast Asian market. The key is to have a clear strategy and local insights.
Attracting venture capital and investments
Singapore is a hotbed for venture capital and investment activity. In fact, it’s often referred to as the Silicon Valley of Asia. Having a Singapore offshore company can boost your credibility and attractiveness to potential investors. They view it as a sign of stability and compliance. To catch investors’ attention:
- Develop a compelling business plan and pitch deck
- Highlight your competitive advantages and growth potential
- Showcase your team’s expertise and track record
- Tap into local investor networks and pitch events
Offshore companies have secured significant funding rounds from Singapore-based investors. It’s a testament to the confidence in the business ecosystem in this country.
Obtaining necessary business licenses and work passes
Depending on your offshore company’s activities, you may need to obtain specific business licenses. Common ones include:
- Goods and Services Tax (GST) registration
- Import/export permits
- Industry-specific licenses (e.g., financial services, food & beverage)
If you plan to relocate or hire foreign staff in Singapore, you’ll also need to apply for the relevant work passes:
- Employment Pass for foreign professionals, managers, and executives
- EntrePass for eligible foreign entrepreneurs
- Dependent’s Pass for spouses and children of work pass holders
Navigating the license and work pass landscape can be complex. But with proper guidance from a trusted corporate services provider, the process is very manageable.
Key takeaway:
Choosing the right bank in Singapore for your offshore company hinges on comparing services, fees, and account opening ease. Get all needed docs ready. A corporate bank account boosts credibility and smooths international dealings. Stay sharp with compliance, like appointing a nominee director and annual filings to avoid hiccups.
Conclusion
So, we’ve finally covered all you need to know on ‘offshore company Singapore’. It’s not just about the tax benefits (although those are pretty sweet, too). It’s about tapping into a thriving business ecosystem, enjoying a stable political climate, and gaining access to a world of opportunities.
Singapore is like the cool kid on the block when it comes to offshore companies. It’s got the brains (hello, top-notch legal system), the looks (have you seen that skyline?), and the connections (we’re talking global business networks) to help your venture succeed.
If you are looking to start a company in Singapore, and need expert and reliable services in business registration, accounting, and local tax compliance services, speak with your local experts at Sleek today.
