Entrepreneurs interested in expanding their business activity in Singapore
should know the taxation system
applicable to companies here. Singapore
is an investment oriented country, interested in attracting foreign direct investments
; as such, the Singaporean government
has created a taxation system
attractive to foreign investors. The business environment in Singapore
is appealing to foreign investors due to a lower corporate tax
and tax incentives
offered to companies set out here; our Singaporean lawyers
can provide you with further information on the taxation law.
Corporate taxes in Singapore
is one of the most important economies in the world; the legislative system
is favorable to an easy process of doing businesses and the workforce
here is highly educated and trained; as such, foreign entrepreneurs are interested in setting up a company in Singapore
The taxation system applicable to foreign company is comprised of the following:
• corporate tax – applicable at a standard rate of 17%; the corporate tax has been reduced in six stages since 2001, when the corporate tax had a value of 25.5%;
• withholding tax on royalties, applicable at a rate of 10% of the gross amount of the dividends;
• withholding tax on interests, applicable at the rate of 15%.
Tax incentives for companies in Singapore
The Singaporean government offers a set of tax incentives to resident companies in Singapore. According to the local legislation, a company is considered a tax resident regardless of the incorporation place, as long as the place of control and management is set up in Singapore.
The Singaporean government
offers a 100% corporate tax exemption
for newly incorporated companies, for the first $100,000 taxable income in the first three year of financial activity. The business should meet the following criteria:
• the company is incorporated in Singapore;
• the company is a tax resident in Singapore;
• it is compulsory for the business to have an individual shareholder who owns a minimum of 10% of the company’s shares.
Newly formed companies with a taxable income of maximum $300,000 can benefit of corporate tax reduction (applied at the reduced rate of 8.5%) for the first three years of activity.
If you need further information on the taxation of companies in Singapore
, our Singaporean law firm
can offer you with assistance on this subject.