Preferred Business Headquarters in Singapore
This page provides you all the relevant information regarding why most of the multinational companies are establishing their headquarters in Singapore. We are here to help you in understanding the benefits of relocating to Singapore including tax incentives, foreign-sourced income exemption, and extensive network of double taxation agreements and free trade agreements in addition to other factors.
Singapore is growing as one of the largest hubs with respect to the modern market. The evolution of this place as a hub for countries is just because of the strong info-communications structure, a hub of skilled professionals, stable political situation and strategic location. In addition to this, the government of Singapore has initiated certain tax policies that are business- friendly which makes this place one of the top choices for multi-national companies to set up their regional headquarters in its location and carry out their operations in the Asia Pacific.
The Head of Operations, Satish Bakhda said at Richmond that the tax benefits include the corporate taxes as well as rates of the personal income taxes, a wide network of tax treaties, ease of launching and operating the business, no capital gains on taxes and minimizing the lending rates offered by the Singaporean Banks.
The tax system followed in Singapore is of progressive nature which is specifically designed to enhance the business activity and spur entrepreneurship. The personal and corporate tax rates initiate with 0% and remain within 20%.
Apart from other facilities, the most attractive thing offered by Singapore is a deduction of 400% on taxes for those who chose the Singapore Company formation and an option of earning a payout of 60% every year for investments made by PIC scheme, innovation credit scheme and short for productivity.
FTAS AND DTAS
The Country Singapore also incentivizes foreign companies and investments to set-up in their country by offering a wide network of FTAS, Free Trade Agreements( 20 FTAS among 27 economies) and prevention of the double taxation agreement (69 DTAS).
INCENTIVES FOR HEADQUARTER SETUP
In order to attract and encourage more number of MNCs to relocate their headquarters in Singapore, the EDB, Economic Development Board offers international headquarters and regional headquarters incentives to the companies. The companies that receive the RHQ status receive a concession of 15% on tax rate for the income that generates as a result of headquarters operations and activities carried out of Singapore. The companies that receive an IHQ status get benefitted by availing more attractive concessions in tax rates which can range between 0%-10%.
Regional headquarters that use Singapore as a location for holding an Intellectual property can claim Writing-down allowance (WDA) with respect to the cost of acquisition of IP.
FOREIGN INCOME EXEMPTION
One more benefit of getting the headquarters established in Singapore is that they can repatriate the dividends from the foreign subsidiaries that are directly held by the company to the units operating in Singapore free of cost without paying any taxes. The companies whose foreign subsidiaries are involved in economic activities and are unable to meet the standards for qualifying for the tax exemption, they can apply for some specific exemptions.
Another introduction by the country to attract more talents to relocate to their country is the launch of NOR Scheme (Not Ordinarily Resident) which was started in 2002. According to this scheme, the individuals who are reside in Singapore but should spend a time period of 90 days outside the country so as to perform their regional duties can apply. With this scheme, the employment income of such applicants is taxed on the basis of time-apportionment for at least 5 years of assessment. The minimum tax rate in this case can be 10%.
Singapore has been ranked at the third position for being the safest country for investment in Asia Pacific. In the BERI Report 2011, the Country was marked as a place with the best investment potential in the world. It also held the third position in Globalization Index for having an effective economy for investment and foreign trade in the year 2010.