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Top Reasons to Start a Company in Singapore in 2023: Opportunities and Advantages
02/05/2023
In 2023, entrepreneurs and investors increasingly seek new business opportunities and potential locations to establish their ventures. Singapore has long been a popular destination for companies due to its strategic location, business-friendly environment, and favorable tax policies. In this blog post, we’ll explore why you should start a company in Singapore in 2023. From the country’s stable political environment to its highly skilled workforce and supportive startup ecosystem, many reasons exist to consider Singapore as your next business destination.
This blog will explore why Singapore should be at the top of your list for starting a company in 2023.
Excellent Connectivity and Strategic Location
Singapore’s central location in Southeast Asia provides access to over three billion people within a few hours of flight time. Singapore Changi Airport is a regional transportation hub connecting over 380 cities in about 100 countries and territories worldwide. In addition, the port of Singapore is classified as a premier International Maritime Centre, connected to 600 ports in over 120 countries and handling nearly 15% of the world’s container transshipment throughput. Singapore also ranks fourth in the Global Connectivity Index 2019 for its excellent digital infrastructure.
Business-Friendly Environment
Singapore has one of the most efficient and bureaucracy-free regulatory frameworks globally, ranking second among 190 economies in the ease of doing business. Incorporating a company takes about 2 to 3 days, and the Singapore government offers an online platform, BizFile, for instant incorporation.
The country is a leading financial hub in Asia, home to over 100 commercial banks, 29 merchant banks, and 40 representative offices of foreign banks. Its sound banking sector offers various services and products, including banking, foreign exchange, bonds, equities, derivatives, asset management, and insurance.
Leading Financial Hub
Singapore is one of the largest financial centers globally, with a foreign reserve ranked the 10th in the world. The Global Financial Centres Index (GFCI) ranks Singapore fifth in terms of competitiveness, home to over 100 commercial banks, 29 merchant banks, and 40 representative offices of foreign banks.
It is also among the top ten countries attractive to FinTech, offering a favorable environment for businesses and financial institutions to adopt new technologies like crypto and blockchain. The Singapore Exchange (SGX) is the largest stock exchange in Southeast Asia, with over 640 mainboard listings and 215 catalyst listings.
Attractive Tax Regime
Singapore’s well-structured tax regime is one of the world’s most straightforward. Companies and individuals are taxed only on income generated within the country, with no tax imposed on foreign-sourced income. Double Taxation Agreements are signed with more than 80 countries, preventing any Singapore tax resident company from paying twice for the same taxable income.
Singapore does not have capital gain tax, and dividends distributed to shareholders are also tax-free. The corporate tax rate is capped at a flat rate of 17%, while the tax break for newly incorporated companies’ first S$200,000 income is available for the first three years after incorporation.
As of 1 January 2023, the rate of GST in Singapore is 8% and is charged on taxable goods and services sold by businesses registered under the GST scheme. However, starting in 2024, the GST rate will be increased to 9%, so businesses need to be aware of this change’s impact on their operations.
Extensive Trade Agreements
Singapore’s Free Trade Agreements (FTAs) aim to liberalize trade by eliminating tariffs and non-tariff barriers among ASEAN members. The scope of FTAs has expanded to include e-commerce, intellectual property rights, competition, government procurement, and dispute settlement. Singapore has a network of FTAs, including 14 bilateral and 11 regional FTAs in force.
Start-up and Entrepreneur Friendly Environment
Singapore is a regional hub for start-ups, offering local and foreign entrepreneurs grants, loans, or tax incentives. The government introduced Startup SG, a one-stop source for entrepreneurs to access loans, grants, funding, and capability enhancement. Startup SG Founder provides mentorship and co-funding to first-time entrepreneurs. At the same time, Startup SG Equity helps early-stage companies with strong intellectual property and global market potential access equity financing. The government also introduced a Start-up Tax Exemption Scheme (SUTE) that exempts qualifying start-ups from paying tax on their first S$200,000 of taxable income for the first three years.
How can Belaws help?
If you have a question about starting a company in Singapore, please speak directly with one of our experts.
You can also view our Singapore incorporation services here.
This article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of 1 hour and are conducted by our expert lawyers who are fluent in English, French and Thai.
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Frequently Asked Questions
How do I register my GST number in Singapore?
You can register your GST number in Singapore by submitting an application online through the Inland Revenue Authority of Singapore (IRAS) website using your SingPass or CorpPass account. Alternatively, you can also submit a hard copy of the application form to the IRAS.
Who needs to register for GST in Singapore?
Businesses that make taxable supplies of goods and services and have an annual turnover of more than S$1 million are required to register for GST in Singapore. However, businesses that have an annual turnover of less than S$1 million may choose to register for GST voluntarily.
When should I register for GST in Singapore?
You should register for GST in Singapore within 30 days of your business exceeding the annual turnover threshold of S$1 million, or if you anticipate that your business will exceed the threshold within the next 12 months.
What does it mean to be GST registered in Singapore?
Being GST registered in Singapore means that your business is registered with the Inland Revenue Authority of Singapore (IRAS) and is authorized to charge GST on taxable goods and services provided to customers. GST-registered businesses can also claim input tax credits on GST paid on business purchases and expenses.
Is GST number the same as business number in Singapore?
No, GST number and business number are not the same in Singapore. A GST number is a unique identification number assigned by the Inland Revenue Authority of Singapore (IRAS) to businesses that are registered for GST. On the other hand, a business number in Singapore generally refers to the Unique Entity Number (UEN) which is a standard identification number used by government agencies to identify businesses.
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