Why in 2023 among the many offshore jurisdictions should you choose Singapore for company incorporation? Because Asia is one of the few regions that continues to grow. While the United States and Europe are going through a geopolitical crisis with all its consequences (bank failures, freezing of client accounts, problems for companies with logistics and financial settlements…), Singapore remains economically and politically stable. Let’s tell you why opening a company in Singapore is a great idea for offshore business.
Registering an offshore company in Singapore
Singapore is actually a midshoring jurisdiction, not a typical offshore, which means that local companies pay taxes and file reports, which in turn means that the region’s reputation in the international business market is impeccable. And being a resident of a quality jurisdiction means the ability to cooperate with any company in the world and the ability to be served in any bank in the world.
It is worth clarifying that in Singapore, a registered company is considered offshore, regardless of the type of business structure, if the beneficial owner manages his company remotely, and he himself lives abroad. However, the owner may move to Singapore and obtain a residence permit, in which case the organization will be considered local. The authorities make no distinction between offshore and local legal entities – they all have the same rights and obligations.
What challenges will business founders face in Singapore
- This is one of the most expensive cities on the planet, so you need to be prepared for high operating costs (office and commercial space rent, salaries of employees, generally not cheap cost of living).
- Strict immigration policy. Applicants for a resident visa must prove not only their financial stability, but also their law-abidingness and be ready for a thorough background check. It is not easy to get a residency permit in Singapore, but that is how the country has become safe.
- The founder of a company in Singapore or a shareholder can be a foreigner, but the director and secretary must be citizens or permanent residents. Such requirements make it difficult for the owner to build a management team. On the other hand, a resident director may be a nominee who does not make management decisions, but only performs representative functions and signs documents – and here the problem turns into an advantage.
- A foreign entrepreneur, a non-resident of Singapore, cannot carry out the company registration process on his own until he obtains a special SingPass ID card. This means that local corporate service providers have to be called upon for assistance, and the hefty incorporation costs go up even further. For comparison, the official fee for company registration is SGD 315, with intermediaries’ fees several times higher. On the other hand, professionals have a better understanding of the intricacies of the law, which means they will provide quality service.
- Having a physical office is a mandatory requirement for every company. A PO Box or virtual office is unacceptable. All corporate documents must be stored exclusively at the registered legal address.
As you can see, against the background of the advantages of incorporating a company in Singapore, the disadvantages and limitations look insignificant and tolerable, which means that it makes sense to consider transferring your business to this jurisdiction.
