Singapore v/s India - Where should one Set up a Company? Benefits of Hiring Professionals for Incorporation of Company in Singapore
Benefits of Hiring Professionals for Incorporation of Company in Singapore
The article deals with the debate on which country is best suited to start a business. The countries in consideration are Singapore and India. Factors like company incorporation in Singapore, taxation system and ownership support Singapore as a better destination.
Steps to be Followed While Incorporation of Company in Singapore
T
he geographical boundaries have been reduced in the recent past making it easier for businesses to be set up globally and operated from a preferred country as per entrepreneur’s choice. If you are looking forward for company incorporation in Singapore, this article will help you a lot. The main factors that contribute to the decision of setting up a company in a particular country are: Easy to incorporate:– The incorporation of business should be an easy task with few simple steps that can be quickly followed. Time efficient:– The administration of the country should be such that setting up a company in it takes lesser time and minimal efforts. Low cost:– Being cost efficient is a major factor leading an entrepreneur to select a particular country. This can be cost of setting up a company, cost of operations or other ongoing statutory costs
that directly or indirectly affect the profit margins. In this article, let us compare the difference between setting up a company in India and Singapore and measure them against specific parameters. Entrepreneurs looking for company incorporation in Singapore should read on:
1. Business Incorporation:Business incorporation is a very important part of setting up a company as it assigns a legal entity to the company and entitles it various benefits and incentives by the virtue of being registered. Therefore the process of registration along with costs involved and timeline consumed form an important deciding factor. Let us examine each of these factors for company incorporation in Singapore and India. a. Statutory requirements:The statutory requirements observed by India for registering a company is way more than those observed in Singapore. Singapore company requires a minimum of one director (who is a local Singapore resident or a
foreigner who is entre/dependent/employment pass holder) to be able to set up a company. India on the other hand requires a minimum of 2 directors (may be resident Indians or foreigners) to incorporate a company. The directors in India should also compulsorily obtain a Director Identification Number and Digital Signature Certificate. While Singapore requires a minimum of one shareholder, India requires a minimum of 2 shareholders for company incorporation. Similarly the paid up capital requirements in India are comparatively high. India demands a minimum paid up capital of Rs. 1,00,000 while Singapore Company can be incorporated with just USD1 as paid up capital.
b. Procedure:The incorporation process in Singapore is a simple five stage process while Indian incorporation process takes nine steps for completion. Singapore Incorporation steps: Select a company name and get it
approved with Company Registrar File application for incorporation with Company Registrar along with requisite documentation and know the results within few hours. Get the company registered with the Tax department As per law, obtain requisite business permits and licenses Open a corporate bank account (Optional) and get going India Incorporation steps: Get the government approval for setting up a company (if applicable) Obtain Director Identification No. through application to central Government
Obtain Digital Signature Certificate for Directors by applying to central licensing authority Select a company name and get it approved with Company Registrar File application for incorporation with Company Registrar along with requisite documentation and get Certificate of Incorporation within 1-2 weeks. Get the company registered with the Tax department As per law, obtain requisite business permits and licenses Open a corporate bank account (Optional)
c. Timeline:While a company gets incorporated in Singapore within 3 days, it takes
about 30 days for it to get incorporated in India. This is due to decentralized process, lack of coordination between various departments and high level of bureaucracy within the entire system. For example, Company name approval in Singapore takes about one hour while the same process takes 5-10 days in India. Obtaining licenses in India is also quite a task and takes about a month while it can be obtained in Singapore within a week to a fortnight.
2. Foreign Ownership:Singapore is quite liberal in its economic policies allowing 100 % ownership to foreign companies is almost all sectors. This also does not require any prior approval form the Singapore authorities. India on the flip side has restrictive policies and discourages 100% foreign ownership in many sectors. Many sectors also require prior approval from Indian authorities since Indian policies levy a cap on investments on such sectors.
3. Taxation:-
Singapore offers a flat corporate tax rate of 17% on profits .In addition to this, Singapore offers various tax incentives to startups. It levies a flat rate of 8.5% on profits to the tune of $300k and flat 17% above that. It also does not levy tax on capital gains and dividend income. It does not charge any tax on income that is earned by a Singapore company in any other country unless funds are repatriated to Singapore. India’s taxes are quite a burden for new ventures as it offers no special incentives to them. Besides, the corporate tax rate applicable on an income up to INR 10 million is 30.9% and 33.9% above such income levels.
Taxes are charged on incomes earned by Indian company anywhere in the world irrespective of whether funds are repatriated to India or not. Short term capital gains are charged @ 15% and Short term capital gains are charged @ 10-20%. To conclude, Singapore is a better country to set up a business in as compared to India which is quite evident from the fact that Company incorporation in Singapore is easier compared to India. Moreover taxation system and ownership factors do help the cause for setting up business in Singapore.
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