Singapore has always been known for its economic development and social stability, and is one of the four major financial centers in the world. A stable political environment, sound laws and regulations, and a strategic location in the Asia-Pacific region make Singapore an ideal place to create wealth. With a good business environment, expanding the Singapore economic market can provide many development opportunities for enterprises.
At the same time, the Singapore government is very business-friendly, has introduced many preferential tax policies, and has extremely high efficiency, which has attracted global investors to register Singapore companies in Singapore and expand their business territory. Many wealthy people like to immigrate and invest in Singapore. One of the most attractive reasons is its low tax.
1. Single tax system
Taking the United States and China as examples, there are many types of taxes and the principle of global taxation is adopted. In Singapore, there are few types of taxes and low tax rates, and the principle of territorial taxation is adopted, and it is a single tax system. For example, after the Singapore company pays income tax, the dividends received by the company's shareholders are exempt from tax in Singapore.
2. Low tax rate
Singapore corporate income tax rate is 0-17% (China 25%), Singapore personal income tax rate does not exceed 22% (China 45%), and there are a series of tax reliefs.
3. Tax exemption
In Singapore, there is no tax on capital gains, dividends or income derived from overseas. And there is no inheritance tax collection in Singapore, and the assets acquired in inheritance or gift can be exempted from tax. From the perspective of the strict interpretation of the source of funds, the Immigration Bureau of Singapore only has a general understanding of the "startup fund" of the immigrant applicant. Assets acquired in inheritance or gift are exempt from taxation.
4. Exemption from double taxation
Singapore has reached double taxation agreements with more than 70 countries around the world, including Japan, China, and the United Kingdom. Companies and individuals that benefit from foreign income and assets are only taxed once. The double taxation agreement stipulates the taxation rights between Singapore and the treaty country on certain cross-border income, effectively avoiding double taxation. The same income can enjoy low tax or even tax exemption in Singapore, while in other regions, it is required to be taxed no less than 20%-35%.
Taxes in Singapore are broadly divided into two categories, namely personal income tax and corporate income tax. In addition, there are other taxes that need to be paid (such as: withholding tax, consumption tax, property tax, stamp duty) depending on your business. The previous article talked about personal income tax ( Singapore VS China tax rate|personal income tax ). Next, we will understand the differences between Singapore's corporate income tax rate and mainland China.
corporate income tax
For taxpayers who work in Singapore or operate a business in Singapore, they must declare income tax to the Inland Revenue Authority of Singapore (IRAS) within the specified time. Singapore's corporate income tax has been maintained at 17% since 2010, and companies can reduce the overall effective corporate income tax rate through tax cuts. The main tax reduction programs are as follows:
Startup Tax Relief Program
Starting from the YA2020 tax year, newly established companies can enjoy tax relief of no more than 125,000 SGD (approximately 625,000 RMB) in the first three tax years: Taxable income
within the first 100,000 SGD: 75% reduction , which is equivalent to a tax rate of 4.25%;
●The taxable income of the next SGD 100,000: a 50% reduction or exemption, which is equivalent to a tax rate of 8.5%;
●The part of the taxable income exceeding SGD 200,000: a tax rate of 17%;
(Singapore corporate income tax rate)
That is, the effective tax rate of the first 200,000 SGD taxable profits of eligible newly registered Singapore companies is only 6.375%, and the tax deduction reaches 125,000 SGD!
Tax incentives for companies established for more than 3 years
Starting from the 2020 tax year, for enterprises that have been in operation for more than three years, the effective tax rate of the first SGD 200,000 of taxable income is 8.2875%, and the tax deduction can reach SGD 102,500!
Foreign Source Income Tax Exemption Scheme for Businesses
Singapore implements a tax-free policy for overseas dividends, overseas branch profits, and overseas service fees that meet the following conditions: ● Overseas remittances
have been taxed outside Singapore ;
●The foreign inward remittance belongs to the Singapore tax resident.
China's 2021 updated corporate income tax rate:
● The basic corporate income tax rate is 25%,
● Qualified small and low-profit enterprises are subject to a reduced corporate income tax rate of 20%.
● The high-tech enterprises that the government needs to support will be levied a reduced corporate income tax rate of 15%.
In the past two years, more and more large domestic enterprises have entered Singapore, and have chosen Singapore as a platform to expand the global market. Investors not only value the potential market in Singapore, but also companies value the Southeast Asian market. Haidilao, Alibaba, Xiaomi. During the epidemic, Tencent, ByteDance and iQiyi all chose Singapore as their international headquarters or Southeast Asia headquarters. In the previous article, I also shared the advantages of setting up a company in Singapore ( dry goods! The advantages and conditions of setting up a company in Singapore )
WAN can assist customers' overseas companies to open corporate accounts in Singapore banks. The operation of online banking is convenient and simple, Singapore has no foreign exchange control, and banks have no mandatory financial management. From Singapore company registration, bank account opening, corporate accounts, tax incentives and various applications, WAN provides you with fast, efficient and cost-effective professional services, one-to-one full-process services, reducing your procedures. At present, some banks in Singapore accept remote account opening and complete video interviews without leaving home.
WAN also has immigration services, which conduct a comprehensive analysis of customers' purpose of going abroad, and then propose integrated solutions for going abroad. In addition to traditional immigration programs, in order to meet the light travel needs of more and more customers, many visa programs have been developed. The types of visas also cover tourism, business travel, family reunion and long-term visas. Other services include but are not limited to: overseas study and education improvement, housing sales and leasing, global asset allocation, financial planning and inheritance, etc.
In today's global market with fierce competition, rising costs and increasingly challenging challenges, reasonable tax planning can be said to be one of the keys to business success to a certain extent. In Singapore, a tax haven with an extremely low tax rate, it is not only for companies to save costs , Individuals can also reduce the tax payable in terms of interest, income, inheritance, capital gains, etc., and save taxes within the legal scope. This is enough to attract powerful high-net-worth individuals from all over the world to invest!
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