Offshore Company Formation In Singapore
The term “offshore” is most often used to describe any business activity or investment made outside the country of residence. An Offshore company, also known as an international business company (IBC), is a company incorporated outside the place of residence of its directors, shareholders and beneficial owners. Offshore company formation can be incorporated in a number of jurisdictions, including British Virgin Islands (BVI), Anguilla, Belize, Seychelles, Bahamas, Panama, Cayman Islands, etc. It is often pursued to realize various financial, legal or tax benefits.
Why Offshore Company Formation?
Offshore companies are widely used to protect assets, legally minimize tax obligations and provide corporate structures necessary for the operation of the international business. Business men and foreign investors especially from countries with high taxes became attracted to these offshore jurisdictions and enjoys total exemption or at least a substantial reduction of the taxes from their profit provided that they are not carrying business within the tax haven itself.
Benefits of an Offshore Company:
- Legally mitigate taxes
Advantages that companies in Singapore have includes a simple and low tax
system. This is characterized by low corporate and personal income tax rates, tax incentives and relief measures, absence of capital gains tax, absence of dividend tax, territorial one-tier tax system, and an extensive tax treaty network.
- Credible image
Since Singapore is not a tax haven, an offshore company that is incorporated in Singapore communicates credibility and stature as a legal entity. By incorporating a Singapore offshore company, your business will be taken seriously by stakeholders such as employees, bankers or other professionals you will be dealing with.
- Optimize confidentiality
- Lower maintenance and operating costs
- As a vehicle for holding assets such as Intellectual Property and real estate Investments
- Offshore company formation can improve cross border sales for the holding company
- Decrease capital gains and inheritance tax when you park your assets under an offshore entity
- Ease of compliance reporting in certain offshore jurisdictions
Offshore company is good for businessmen, consultants, traders, commerce over the internet, expatriates, holding intellectual property rights, for the custody of real estate, or for inheritance purposes.
Factors to consider for offshore company formation
- privacy and protection,
- professional services and investment management options available,
- international banking options,
- for a business, available workforce,
- tax filing and payment obligation,
- locals audit or reporting requirements,
- world image/perception, and h. countries that offer specialized structures (niche markets).
Incorporation Checklist for Singapore offshore companies:
- Company Name Approval
- Name must be approved by the Company Registrar prior to incorporation.
- Minimum 1 local director
- Minimum 1 local or foreign shareholder
- Company Secretary
- 1 local secretary required
- Paid-Up Capital
- Minimum paid-up capital of S$1
- Registered Address
- The company must have a local registered address
- Appointment of Incorporation Agent
- You must engage a professional firm for registration
- Documents Required for Incorporation
- Passport copies of proposed shareholders and directors
- Residential address proof of proposed shareholders and directors
- Details of the parent company if the shareholder is a corporate entity
- Bank Account Opening
- Individual must be physically present
- Registration for GST
- Company may need to register for GST
- Obtain Business Licenses or Permits
- Certain business activities require licenses
- Follow Ongoing Compliance Requirements
- Relocation to Singapore
- You are free to incorporate and operate your Singapore offshore company from overseas without the need to relocate
Types of business:
BVI – Business company
Marshall Islands – International business company
Cayman Islands – International business company
Cyprus – Limited liability company
Malta – Limited liability company
Bermuda – Bermuda exempt company is most popular
St. Kitts / Nevis – International business company
Liberia – corporation, LLCs, partnerships, and not-for-profit businesses
Mauritius – Global Business Company Category 1 (GBC1, offshore) and the Global Business Company category 2 (GBC2, international)
Hong Kong – Limited liability company
Seychelles – International business company
Features of International Business Company: a. a convenient entity type for opening an offshore bank account and obtaining a credit card, b. a confidential company for an international holding, acting as a parent company, c. an ideal vehicle for legitimate transactions, such as e.g. real estate investments, d. an optimal and confidential way of investing offshore, e. IBC may serve all your private and business necessities when you are abroad, f. a handy corporate tool for a yacht or ship registration, and g. an excellent structure for employee recruiting initiatives in the international business setting.