Advantages Of A Singapore Company Setup

By Author: Diane Paz
Total Articles: 172
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There are a lot of advantages that a corporation or commonly known as company in Singapore benefit from such as tax exemption and other incentives, protection of assets and limited liability.

Under the Singapore Companies Act, a company is a legal business entity that is separate from its shareholders and directors. In this provision, an entrepreneur benefit from a personal asset protection called a limited liability that arise in case a company incurs unfavorable business circumstances such as bankruptcy, financial loss, and legal claim related to their business.

A company is viewed like a "real person" because it is authorized to obtain properties, purchase supplies, and file a lawsuit or be sued under its name.

Its perpetual existence is one of the most notable advantages of a company ownership since its ownership is transferable and additional shareholders may be appointed.

As opposed to the perception of most people, a company is not only ideal to large businesses but as well as to some small and medium enterprises wanting to enjoy the protection of a limited liability.

The private limited ...
... company and the public company are the two types of Singapore company set up. Private limited company is allowed to have one to 50 shareholders, while a public company can have more than 50 shareholders.

As the name suggests, a public company can invite the public to become shareholders through the selling of shares or debentures in the Singapore Exchange. However, in a private limited company, the shareholders can only accumulate funds among themselves or opt bank loan application to come up with the needed funds.

The provisions and legal requirements stated in the Singapore Companies Act should be complied, therefore, there is a need for shareholders to appoint at least one resident director who will ensure that requirements are being complied.

Meanwhile, it is possible to appoint a foreign individual as a resident director. However, he should apply for Employment Pass to the Ministry of Manpower's Work Pass Division.

Having drawbacks is inevitable in registering a Singapore company despite the outstanding benefits it upholds. A few of the flaws as mentioned above are the strict formalities and procedures in complying the requirement which includes submitting annual returns, conducting annual general meeting, appointing qualified secretary and auditor, designating directors, etc.

With the above-mentioned formalities, a company is more expensive to set up and maintain unlike other business structures like the sole proprietorship and partnership.

In addition, the profit of the company is taxed on corporate level which rate is currently 17 percent. Also, another disadvantage is that the taxes are only deducted at a corporate level and do not include the shareholder's dividends because the country is following a system called "single tier tax system".

AsiaBizSetup is a leading corporate services firm that assists entrepreneurs and investors with Singapore company setup including forming a Singapore company incorporation and other corporate services. The firm provides a range of services to assist the success of the Singapore offshore company, including opening Singapore corporate bank accounts.