Forming an Offshore Company in Singapore

An offshore company is one that is incorporated in a jurisdiction other than the jurisdiction that constitutes its main place of operations or where the company’s principal investors reside. In a broader sense, offshore simply means a jurisdiction other than your own.

Some of the principal advantages of incorporating an offshore company include tax benefits, simpler reporting requirements, ease of company set up and ongoing administration, etc. The choice of a particular jurisdiction for offshore company incorporation is an important decision as it can have a significant impact on your business. In this regard, a Singapore offshore company represents a tax efficient corporate entity that is simple and easy to operate in a politically and economically stable environment.

This guide describes the benefits of incorporating a Singapore offshore company and also provides an incorporation checklist for offshore companies in Singapore.

Why incorporate a Singapore offshore company?

There are several benefits of incorporating a Singapore offshore company. Some of the main advantages include:

Reduced tax liability

Taxes are one of the key considerations for setting up an offshore company. One of Singapore’s unique advantages is its simple and low tax system. Singapore’s tax system is characterized by low corporate and personal income tax rates; tax incentives and tax relief measures; absence of capital gains tax; absence of dividend tax; territorial one-tier tax system and an extensive tax treaty network.

As Singapore follows a territorial basis of taxation, taxes apply to income that is accrued to or derived by the company from Singapore or foreign-sourced income received in Singapore. Foreign-sourced income received in Singapore that meets certain qualifying conditions is exempt from Singapore tax, while foreign-sourced income that is not remitted into Singapore is exempt from Singapore taxation. Singapore follows a single-tier tax policy which means once the income has been taxed at the corporate level, dividends can be distributed to shareholders tax free.The corporate income tax rate is approximately 8.5% for profits up to S$300,000 and a flat 17% above S$300,000. Furthermore, a newly incorporated company enjoys 0% tax rate on the first S$100,000 taxable income for each of the first three tax filing years, provided the company has a maximum of 20 shareholders of which at least one is an individual shareholder holding at least 10% of the shares.

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.

Ease of offshore company incorporation

Singapore has been consistently ranked as the world’s easiest place to do business. The company registration process is quick and efficient, free of bureaucratic red-tape. The registration procedure is fully computerized and involves only two distinct steps – company name approval and submitting incorporation documents. Both these procedures can be executed online and under normal circumstances a Singapore offshore company can be incorporated in 1-2 days.

Liberal foreign ownership policy

Singapore’s foreign ownership policy is open and liberal. There are no restrictions on permitted fields of business activity if you want to set up an offshore company in Singapore. 100% foreign shareholding is allowed in all sectors. Shareholders can be individuals or corporate bodies. Additionally, foreigners wanting to register an offshore company in Singapore do not require prior approval from Singapore authorities.

Political stability

The Political and Economic Risk Consultancy has rated Singapore as the most politically stable country in Asia and Asia’s least bureaucratic country. The Singapore government is noted for its high integrity and pro-business approach. It is often described as rational, pragmatic, transparent and corrupt-free. Singapore is also characterized by a transparent, sound and efficient legal system. There are clear-cut rules and regulations pertaining to commerce, intellectual property protection, manpower and other business related areas. As a result, the level of risk involved in setting up and operating a Singapore offshore company is minimal and almost non-existent.

Sophisticated banking facilities

Singapore has emerged as the leading financial center in the Asia Pacific region. Singapore offshore companies have a broad choice of world-class local and foreign banks for opening an account. Banks in Singapore offer a wide-array of attractive features such as multi-currency accounts, internet banking, credit cards, trade financing, freedom to move funds across countries and more. Although most of the banks require physical presence at the time of opening the account some of them are willing to make an exception on a case-by-case basis. The account opening process may take anywhere from 2-15 days depending on the amount of due-diligence undertaken by the bank.

Incorporation Checklist for Singapore offshore companies

Once you have decided to incorporate a Singapore offshore company, the following details will help you understand the key requirements and the overall incorporation process.
Item Description
Company Name Approval
  • The proposed name of your Singapore offshore company must be approved by the Company Registrar prior to incorporation.
  • Company name reservation is part of our offshore company incorporation service.
Directors
  • Minimum of one local resident director (Singapore citizen, Singapore permanent resident, or Singapore work pass holder).
  • Any number of additional local or foreign directors can be appointed.
  • Directors must be natural persons and above 18 years of age.
  • If you are unable to satisfy the local director requirement, we offer nominee director service.
Shareholders
  • A minimum of one local or foreign shareholder is required.
  • There can be a maximum of 50 shareholders.
  • A director and shareholder can be the same or different person.
  • A shareholder can be an individual or corporate body.
Company Secretary
  • A local resident and qualified company secretary is required.
  • Company secretary must be a natural person and not a corporate body.
  • A sole director/shareholder cannot act as the company secretary.
  • We act as the company secretary for all offshore companies we incorporate.
Paid-up Capital
  • Minimum paid-up capital of S$1 is required.
  • No authorized capital required.
Registered Address
  • The company must have a local registered address (commercial or residential).
  • A PO Box is not allowed.
  • We provide registered address service for all offshore companies we incorporate.
Appointment of Incorporation Agent
  • You must engage a professional firm such as our company to register a Singapore offshore company.
  • Singapore law does not allow foreign individuals or entities to self-register an offshore company in Singapore.
Documents Required for Incorporation In general, the following documents will be required:

 

  • 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
Company incorporation process
  • Once all the necessary documents are in place, Hawksford will register your  company with Singapore company registrar. The process is quick and can be accomplished in a single day in most cases.
  • After the offshore company has been incorporated, we will prepare the company incorporation kit that includes such items as company seal, rubber stamp, share certificates, company profile, certificate of incorporation, etc.
Bank Account Opening
Registration for GST
  • Your offshore company may need to register for Goods and Services Tax in Singapore. For more details, refer to Singapore GST registration guide.
  • We can assist you with GST registration and ongoing compliance, if you decide to register for GST.
Obtain Business Licenses or Permits
  • If you plan to carry out business operations in Singapore, you may require a business license depending upon the nature of your business.
  • Only certain types of business activities require a license. The business license(s) must be obtained from the relevant government agencies after company incorporation but before commencing business operations.
  • We can assist you with business license application filing if required.
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. You can visit Singapore on a visitor visa whenever required, to attend to company matters on a short-term basis.
  • If you plan to relocate to Singapore to operate your company, you must obtain either an Employment Pass or Entrepreneur Pass type of work pass.
  • We can assist you with filing your work pass applications as required.

Talk to the experts in Singapore businesses

Hawksford helps entrepreneurs and international businesses set up in Singapore.

Discover our services

Singapore company formation made easy

Hawksford's experienced and professional staff will be able to guide you through moving or setting-up your business in Singapore.

With our expertise, we can assist you in setting-up your business structure right the first time.

Reach out to Hawksford today

Back to top