Amidst the various legal entities that can be established in Singapore for venturing into business, companies, partnerships, sole proprietorship and foreign company offices are the most commonly utilized corporate structures for business. Friendly incorporation laws in Singapore facilitate the process of forming and registering any one of these companies in Singapore, though each has its own structure, is taxed differently and formed according to the interests of the owners.

Regular Singapore companies acquire the form of the Private Company Limited by Shares, also referred to as private companies or Pte Ltd. Singapore private limited companies are independent, legal and flexible entities, comparable to a limited liability company or a company ltd. whose liabilities are separate from the personal assets of its beneficial owners. Singapore private limited companies are often converted into public limited companies after having achieved a certain level of expansion. Most Singapore public limited companies are listed on the stock exchange and are regulated by stricter laws due to the fact that they are capable of raising revenue publicly.

The concept of the Singapore sole proprietor is practically the same as that which is generally understood. That is, an unincorporated small to medium size (usually) business setup by a single person (owner) whose assets are tied with the liabilities of the business; hence the reason this Singapore company is not considered a separate legal entity. On the other hand, partnerships are setup as Singapore companies by individuals who enter a business agreement to provide services. Limited liability partnerships are commonly entered into by accountants, lawyers and other professionals who share similar business interests. Similarly to Singapore private limited companies, the liabilities of a limited liability partnership are unattached to the personal assets of every business partner. Singapore companies setup as general partnerships are not highly recommended as the personal assets of the partners are tied to the liabilities of the partnership and each partner can be held accountable for the actions of the other. Last but not least, Singapore foreign company offices are authorized to setup subsidiaries, branches and representative offices in Singapore.

The Singapore Companies Act regulates companies registered and incorporated in Singapore. To summarize, the Act dictates the legal framework that different Singapore companies should take, provides guidelines on the conduct of business transactions between local and foreign Singapore companies and gives rules by which companies should be dissolved or incorporated. Amendments made to the Act in 2005 sought to reform certain aspects regarding Singapore companies by altering the system for buying back shares, introducing a different process for reducing capital without the need of the court’s involvement sanction and making it possible to redeem shares and lifting restrictions that were placed on financial assistance. The amended Act also created the possibility to amalgamate Singapore companies, while allowing shares to be placed in the treasury as treasury shares rather than having those shares cancelled.

As such, a company is non-resident if controlled and managed outside of Singapore and resident if controlled in Singapore. Unlike regular offshore havens where the term ‘non-resident company’ is used synonymously with ‘offshore company or IBC’ which is bound to strict rules and a separate regime from domestic companies, in Singapore a company may be non-resident, i.e., controlled in a foreign jurisdiction but able to operate and earn income in Singapore and consequently be subject to taxation. In the same vein, a Singapore company may be resident but not subject to offshore taxation if income is earned strictly outside Singapore. This signifies that the residency of a Singapore company does not significantly impact its tax liability based on the fact that income is taxed depending on where it is derived – in or outside Singapore, thereby making the grounds for taxation generally the same.

In light of the fact that Singapore companies are all capable of operating offshore, the question of tax on international income is addressed. To avoid double taxation, Singapore companies are taxed on a territorial basis. Singapore companies are therefore fully relieved from taxation on offshore income, and exempt from tax on offshore dividends, service income and branch profits remitted to Singapore under the condition that these dividends, service income and branch profits were subject to foreign taxation.

The times we live in call for taking bold steps to protect financial and personal interests. Our firm networks with lawyers and financial professionals in asset management, company formation, Dominica Citizenship and asset protection devices such as trusts and foundations. These professionals include approved agents who are in the business of creating opportunities for wealth management and tax free structures. This extends to second citizenship passport programs which operate by enabling overseas residents to invest in their countries by meeting certain investment conditions and application requirements such as due diligence. For information on such second passport programs as well other offshore company services such as shelf companies and Limited Liability Partnerships registered in other regions support is available. Exploring various methods of preserving assets in increasing earnings is always worth the time and effort. Such programs exist in the form of the St. Kitts Citizenship-by-Investment Program which creates a channel for families from foreign countries to own real estate and become eligible to get citizenship.

Under the one-tier corporate tax system, which was introduced on January 1st, 2003, Singapore companies were made subject to only one corporate tax and exempt from tax on dividends paid to shareholders. This form of Singapore company taxation is applicable to all companies incorporated in Singapore and replaced the imputation system which applied to only resident Singaporean companies.

Additionally, the beneficial owner(s) of a non-resident Singapore company may be locally resident and will benefit from tax exemption on offshore income so long as such income is not earned in Singapore. Similar to other jurisdictions such as Costa Rica and Hong Kong which do not have offshore company legislation, Singapore permits a dual system whereby both local and foreign nationals are provided with equal tax incentives and business opportunities for owning Singapore companies for use both as offshore or domestic, resident or non-resident Singapore companies. If you looking for another asset protection options, read about Dominica Citizenship program.

Singapore nonresident companies are required to have one Singapore resident director and two non Singaporean directors. Nonresident companies may not keep meetings in Singapore.