Tax Considerations For Offshore Companies In Singapore

Singapore has one of the most favorable taxation policies for offshore companies. As a matter of fact, Singapores taxation policy along with the credibility involved in doing business in Singapore have been instrumental in the rise of the country has a preferred destination for offshore company formation. Foreign entrepreneurs who are considering setting up a business in Singapore must be aware of the tax considerations for Singapore companies.

First of all, if the foreign entrepreneur has decided to do business within Singapore and not just use their Singapore Company as an offshore business, then the standard corporate tax rates would apply. Currently Singapore has the second lowest corporate taxation rate in entire Asia at only 17 per cent. Tax rates have been lowered in the country over the past couple of decades and it wont be surprising if the corporate tax rate is lowered even further in the future. Apart from the maximum rate of 17 per cent, there are a number of other tax benefits available to foreign owned companies as well. Some of these include zero taxation for income up to SGD $100,000 for each of the first three years the company is in operation, concessional tax rate of 8.5 per cent for income up to SGD $300,000, tax breaks for investments in research and development and also for investing in upgrading the skills of employees. There are also a number of industry specific tax incentives available in Singapore.

One of the more key taxation policies that offshore company owners must be aware of is the territorial system of taxation followed in Singapore. As per this system, foreign sourced income in Singapore is completely tax free. However, if foreign sourced income is deemed as remitted to Singapore, then the standard corporate tax rates would apply. For offshore companies, since they usually would not remit overseas income to Singapore and would prefer to transfer the funds to their own home countries, this could result in a zero tax obligation for offshore businesses registered in Singapore. However, a professional must be consultant to understand what exactly qualifies as foreign sourced income and when is it deemed remitted to Singapore.

Singapore does not have any other kinds of taxes such as capital gains tax or dividends tax. In fact Singapore has bilateral treaties with over 50 countries from around the world to avoid double taxation possibilities for businesses registered in the country.

About the Author:
Bryan Wong is a business analyst in the Asia-Pacific region and in his free time writes business articles. In this article, Bryan talks about Singapore Offshore Company and Singapore Corporation.

Article Originally Published On: http://www.articlesnatch.com

Tags: Singapore Offshore Company

, Singapore Corporation

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