Rikvin Explains Why You Should Form a Singapore Sole Proprietor
A Company that have a complete benefits that help foreign and local entrepreneurs setting their own business in Singapore.
by Jack Bradley Wednesday, November 10, 2010
Among the many criteria that attract foreign investors, the tax rates are the most attractive.
“The tax rates in Singapore are among the world’s lowest both in personal and corporate,” started a Singaporean-based corporate solution provider Rikvin, taking into consideration several industries that had additional investors in Singapore before 2010 draws to a close and which will attempt to invite more entrepreneurs to start a business in the city-state.
9% is the corporate tax rate levied against an annual earning of up to S$300,000 for Singaporean corporate entities. Above that amount, the rate becomes 17%, which is also the standard rate for non-Singaporean corporate body like a branch office.
Besides the low tax rates, the city-state also grants tax incentives and exemptions. Under a few qualifying conditions, certain newly registered corporate companies are exempted from corporate tax for its 3 years of existence for its first S$100,000 taxable income.
On the other hand, Singapore’s personal income tax rate is more flexible with its 0%-20% depending on the value of earnings. For the first S$20,000, an entrepreneur or employee does not have any tax charges. On the next S$10,000, the tax rate is 3.5%
Unlike the corporate businesses registered in Singapore, the Sole proprietorship, the basic business structure with its requirement of one owner, has a huge tax advantage.
“Sole proprietors are not subjected to double taxation,” continued Rikvin, still smiling at the thought that many UK-based shipping lines and 11 Chinese companies from manufacturing and real estate industries expanded their business in Singapore contributing to the island-state’s GDP growth of 17.9%, “they are only taxed at a personal level.
Its explanation is the legal status of the business, which is awarded to the proprietor. Rikvin elaborates that in Singaporean law, both the proprietor and the business are treated as one. Hence, the earnings of the proprietor from his business are also the income of that business.
Besides the one-time tax deduction, a sole proprietor can deduct his business’ losses to his total income which can sprout from all sources of income such as dividends, interests, and profits, thereby, paying lower personal tax.
Taxes such as capital gains and dividends distribution are non-existent.
As a consequence of awarding the legal status to the proprietor rather than to his business, the sole proprietorship business neither can enter into a lawsuit nor can be filed against one.
“The process of registration and dissolution of a sole proprietorship business is also the easiest, Rikvin further continued, “depending on the nature of the business, it can be accomplished in 2 steps.”
Upon compliance with all the requirements, the entrepreneur may register the business name online. After approval, either the corporate prepares for the set up of the new company or apply for essential business permits relative to the business type like private schools; in which case an approval from government authorities are a requisite.
“Nonetheless, the best feature of a sole proprietorship is liberty,” concludes Rikvin, careful of how to phrase his closing remarks, “the proprietor does not have to seek approval from anybody on how he should run his business. He reserves that sole discretion”
When it comes to earnings as well, Rikvin assures that proprietors can exercise absolute authority including making hasty decisions in matters such as increasing the capital, investing on which properties, or to repatriate or not his profits.
Doing business in Singapore is made easier as a foreign investor may have the peace of mind while a competent firm like Rikvin carries out out everything necessary form a Singapore company.
Located at the heart of Singapore, Rikvin, a business solution provider has been instrumental in helping foreign businessmen settle in Singapore.
Rikvin is the leading incorporation company registration Specialist and has successfully helped thousands of foreign entrepreneur incorporate a Singapore Company. The firm provides a complete corporate solution under one roof for company registration services of private limited companies with the opening of corporate accounts, business registration including accounting, tax, immigration related to work passes visa and compliance services in Singapore.
If you're in our neighborhood and want to discuss any aspect of our service then feel free to come in to our offices during business hours.
Rikvin PTE LTD
Address: 20 Cecil Street, #14-01, Equity Plaza, Singapore 049705
Rikvin provides Singapore Company Registration service including securing your Singapore Employment Pass and Singapore EntrePass Visa for Singapore Business Migration.
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