Home » Blog » Setting up a company: Singapore vs India
This post examines the company incorporation requirements in Singapore vis-a-vis India. In recent times the question of where to set up a business has become as important as what, when, why and how to set up a business. In this regard, foreign entrepreneurs and investors prefer jurisdictions where setting up a company is easy, quick, efficient and cost-effective. The basic requirements to set up a company, incorporation procedure, time-line and statutory compliance are some of the factors that need to be taken into account while deciding on where to incorporate a company.
Note: For detailed information on setting up a Singapore company, refer to Singapore Company Registration guide.
Foreign Ownership
| Singapore | India |
| Liberal policy regarding foreign ownership 100% foreign shareholding allowed in all sectors. No prior approval is required from authorities No restrictions on permitted fields of business activity for foreigners | Restrictive policy regarding foreign ownership 100% foreign shareholding allowed only in certain sectors. Certain sectors are subject to caps on investment limits and require prior approval from the Indian government Certain sectors prohibit foreign investment. Examples: gambling, lottery business, atomic energy and retail trading. |
Minimum Statutory Requirements
| Singapore | India |
| A local registered address | A local registered address |
| At least one local resident director (Singapore citizen, PR or foreigner holding an Employment Pass, Entrepreneur Pass or Dependant Pass) | At least two directors (Indian citizens or foreigners) who need not be local residents. All directors must obtain a ‘Director Identification Number’ and ‘Digital Signature Certificate’ |
| A minimum of one and maximum of 50 shareholders | A minimum of two and maximum of 50 shareholders |
| A local resident and qualified company secretary | - |
| Minimum paid up capital of SGD 1.00 | Minimum paid up capital of INR 100,000 |
Incorporation Procedure
| Singapore | India |
| Step 1: Company name approval with the Company Registrar. Step 2: File incorporation documents with Company Registrar and obtain incorporation confirmation, just within a few hours of documents submission. Step 3: Register with the tax department. Step 4: Obtain business licenses or permits, if required. Step 5: Open a corporate bank account. | Step 1: If applicable, seek government approval for setting up a company in India. Step 2: Apply to the Central Government for a ‘Director Identification Number’. Step 3: Apply to a central licensing authority for a ‘Digital Signature Certificate for Directors’. Step 4: Company name approval with the Registrar of Companies. Step 5: File incorporation documents with Registrar of Companies. The Registrar will issue the Certificate of Incorporation within 1-2 weeks. Step 6: Register with the tax department. Step 8: Obtain business licenses or permits, if required. Step 9 : Open a corporate bank account |
Incorporation Time-line
| Process | Singapore | India |
| Company Name Approval | 1 hour | 5-10 days |
| Company Incorporation Certificate | 1 day | 7-14 days |
| Business Licenses | 7-14 days | 30 days |
| Director Indentification Number | NA | 7 days |
| Digial Signature Certificate for Directors | NA | 7 days |
| Government approvals for foreign investment | NA | 30 days |
Annual Filing Requirements
| Singapore | India |
| Annual returns + audited annual accounts must be filed with Companies Registrar Small companies with an annual turnover of < SGD 5 million are exempt from the audit requirement | Annual returns + audited annual accounts must be filed with Companies Registrar No company is exempt from the audit requirement |
| Tax returns + audited accounts must be filed with the tax department annually Small companies with an annual turnover of < SGD 5 million are exempt from the audit requirement | Tax returns + audited accounts must be filed with the tax department annually Companies with an annual turnover of < INR 4 million are exempt from the tax audit requirement |
| Not all companies are required to appoint an auditor. Only companies with an annual turnover of SGD 5 million and above need to appoint an auditor | Every company, regardless of turnover, must appoint a qualified auditor |
Corporate Taxes
| Singapore | India | |
| Corporate Tax Rate | 8.5% for profits up to S$300K and a flat 17% for profits above S$300K | 30.9% for taxable income up to INR 10 million and 33.9% for taxable income above INR 10 million |
| Dividend Distribution Tax on companies declaring dividends | NA | 16.995% |
| Capital Gains Tax | Nil | 15% – short term capital assets 10%-20% – long term capital assets |
| GST/VAT/Service Tax | GST – Indirect tax on sale of goods and services – @ 7% | Service Tax – Indirect tax on sale of services – @ 10.3% VAT – State level indirect tax on sale of goods within a state – ranging from 1%, 4%, 12.5% to 20% depending on the type of goods. CST – Central level indirect tax on inter-state sale of goods – @ 2% |
| Taxation of foreign sourced income | Singapore resident companies are taxed on world-wide profits only when remitted to Singapore | Indian resident companies are taxed on world-wide profits, whether or not remitted to India |
Interested in doing business in Singapore? Find out how to setup a Singapore company.
