Who Needs To Register A Company Tax File?

Singapore is often called a tax haven because compared to other developed countries, it provides many tax incentives and relaxed taxation policies. Residents are required to pay a maximum 22% tax on their personal profits. Regulations of large enterprises are relevantly lenient, and small-scale businesses are given many advantages as a result. Singapore has become a hub for foreign investment and trade. In Singapore, capital gains are not taxed.

Company registration in Singapore is a smooth and efficient process as all the necessary information is available on relevant websites. Some of the essential information is as follows:

 

Packages for Company registration

Foreigner Package:

This package caters to the foreigner in Singapore business industry.

 

Local Package:

It is meant for the local Singapore citizens as well as permanent residents.

 

Transfer Package:

It is availed during the shifting of a company.

 

Taxable Income

According to the tax rules and regulations in Singapore, the revenue made locally, as well as transferred from foreign businesses, is taxable. Any company having a taxable income must register their taxes.

Overall, the taxable revenue includes:

  • Profits in revenue generated through business and trading
  • Money made from investments like property rents, interests and other investments
  • Royalties and other profits
  • Any gain in income that can be considered revenue

 

registering company tax files

Tax Residency

A company is considered to be the tax resident of Singapore if it is managed and regulated from Singapore. IRAS is responsible for declaring tax residents. Generally, the place of the board meetings of an organization determines the location from which the company is managed. The location of the top management of a company may also play a role in the determination of tax residency status.

There are various tax incentives provided to companies that are declared tax residents. Some of them are:

  • Tax relaxations are given according to the Avoidance of Double Taxation Agreements (DTAs)
  • Tax exception on foreign-sourced bonuses and foreign franchises incomes
  • Tax exemption for small companies

 

Corporate Tax Rates

In Singapore, a flat 17% tax is charged on enterprise incomes. However, tax incentives are also present for certain businesses, which means the tax rate is further reduced. Inland Revenue Authority of Singapore (IRAS) determines the tax rates in different sectors. Start-ups can get up to $125,000 tax break on an income of $200,000 for the first few years of their company.

During the company registration, the management of a small company must have at least 20 shareholders to an avail tax break. Partial Tax Exemption policy is also available, which also offers a more modest tax break.

According to the law, financial institutions are not required to give access to the personal data of the consumers. However, Singapore discloses personal information if a foreign authority request is based on suspicion of criminal activity.

 

Requirements for Singapore Company Registration

There are six main Singapore company registration requirements. These are:

 

a) Shareholding

A company must have 1 to 50 shareholders. They can be residents or foreigners. Moreover, shareholders mean both the people and large organizations.

 

b) Share Capital

The least amount of money used to invest in an organization is S$1. A company has the right to increase the share capital by including additional capital.

 

c) Directors

Local residents of Singapore or foreigners can be the directors of a company. However, one of the directors must be local, who is the permanent resident of Singapore.

 

d) Company Secretary

A competent secretary must be hired within six months of the company formation. The company secretary must be a local resident of Singapore.

 

e) Registered Address

A local address is required. The company must keep records and important documents at this address. It should be noted that the registered address cannot be a PO box.

 

f) Company Name

Before the company registration, the approval of the name of the company is mandatory.

Accounting for small business: applying for licence

Registering a Singapore Company

Singapore company registration is a highly efficient process as it can be entirely performed online easily. The overall cost of the company registration is S$315, which includes S$15 for name approval and S$300 for company registration.

There are three main components of company registration:

  1. Get the name of your company approved
  2. Fill out the online forms and attach the required documents
  3. Get your company registered

Upon the successful registration of a company, ACRA will issue the following documents:

  1. Certificate of Incorporation
  2. Company Business Profile

Finally, the usual business can start after all the formalities are completed. Companies must ensure that they comply with the tax rules and regulations to make sure their registration stays intact in the future as well. For more information on company tax and GST advisory, fell free to get in touch with us.