Singapore presents many opportunities for both small and large businesses across industries. For a start, the tax system in the country is among the most favourable in the world. The country also performs exemplary in the World Bank’s Ease of Doing Business index. The political stability, robust economy, available labour and developed infrastructure are some of the other benefits of starting a business in the country.
Whatever the size of your company, incorporating it offers multiple advantages. This entails legally forming a company or a corporate entity to comply with the required standards. The incorporation also distinguishes between owners and the investors and also separates the assets and income. It is the smartest decision you can make, even for a small business in the country.
This post looks at some of the advantages of company incorporation and summarises the steps to complete this process in Singapore.
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Limit your Liability
While registering and operating a single proprietorship might seem like the easiest way to start a business, it also exposes you to undue risk. In this case, you are personally liable for the debts and liabilities of the business. This means your assets can be attached to pay debts and this can devastate you financially.
The biggest advantage of company incorporation is to limit the liability of the owners. Even the best business idea can fail and with this in mind, it’s good to protect yourself. Even in the case of bankruptcy, creditors can only go after your business’s assets and not your personal property.
Incorporated businesses are better suited to deal with risks without exposing the shareholders. They create a corporate veil that protects owners, directors, and shareholders. Unlike an incorporated venture where the owner might fail to risk losing personal assets, corporations thrive through such daring moves.
Perpetual Succession
changes in ownership are expected when operating a business. For an incorporated business, succession can turn messy, leading to the downfall of a promising venture.
The characteristic of perpetual succession in an incorporated company ensures the company continues running as an entity despite changes in the company’s members. When a shareholder dies or becomes insolvent, the company doesn’t stop running. It continues running indefinitely due to the structures set up during incorporation.
Easier Access to Financing
For a new business in Singapore, access to capital might be a big problem without the prerequisite registration documents. An incorporated company can raise capital through equity (raising funds through the public).
The other option is to raise funds through local and foreign financial institutions. These institutions consider corporations more reliable and responsible compared to unincorporated businesses.
Credibility and Professional Image
For a new business to survive in the competitive Singapore market, networking and collaborations are required. For such partnerships to happen, a business must look legitimate, and a certificate of incorporation is a powerful tool for this.
When you have the “Inc.” or “Corp.” after the company name, this conveys stability and permanence to your partners. It shows you’re committed to the ongoing success of the venture.
Incorporating a company adds credibility and gives a business more legitimacy and this helps it in efforts to build partnerships and strong relationships.
Tax Flexibility
Company incorporation in Singapore allows a business to leverage the favourable corporate tax laws. For instance, private limited companies get a wide range of tax benefits from the Inland Revenue Authority of Singapore grants.
Newly incorporated companies in the country enjoy tax incentives and exemptions. What’s more, profits are taxed at corporate tax rates and dividends are tax-free in shareholders’ hands.
Transferable Shares
In a corporate entity, shares are transferable easily from one person to the other. Members can sell their shares at any time and enjoy liquidity.
Expertise and Efficiency
When incorporating a company in Singapore, you have to provide a list of the shareholders that’s separate from the management. This simple step guarantees the company’s success because the owners and experts expected to run the venture are separate. There’s more accountability and professionalism in an incorporated company.
Company Incorporation Singapore
The process of company incorporation in Singapore takes place through ACRA. In summary, you need to:
- Apply for ACRA’s approval for your company name
- Submit multiple documents to set up Singapore company
- Submit the application through ACRA’s web portal
- Receive confirmation of certificate of incorporation
Using a company incorporation Singapore service is an easier option because these experts handle the entire process remotely. You can choose the company incorporation package you need based on the type of business structure you want.
From name reservation, preparation of shareholders/directors/secretary documents, your registration company handles every step and communicates the progress.
Final Thoughts
If you’re looking for a foreign destination where you can easily set up your business, Singapore offers everything your company needs. This has become a popular destination for Multinational Corporations (MNCs) due to the ease of doing business. Through company incorporation, you can harness the opportunities that abound in this robust financial hub.
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