<p>   Often entrepreneurs use the term offshore to characterize their foreign company, but far from all cases the application of this word reflects the real essence. Is it right to call Singaporean companies offshore and is jurisdiction offshore in the classical sense?</p><p>  Singapore can not be classified as classic offshore. However, there are also nonclassical offshore jurisdictions (midshory), which have some characteristic features for classic offshore attributes. Here to this group of countries it is possible to carry Singapore safely.</p><p style="text-align: center;"><span style="text-decoration: underline;"><em><strong>Is Singapore offshore in terms of the tax system?</strong></em></span></p><p>   In classic offshore companies are exempted from taxation at the legislative level. It is a characteristic feature for classical offshore jurisdictions. Consequently, when using the term "offshore", an interlocutor arises - a tax haven.</p><p>   Singapore can't be classified as classic offshore, since the official corporate tax rate is 17%. On the other hand, the government provides a number of tax incentives and incentives to reduce the tax burden to almost zero, and some types of income and there is no tax at all. So, start-ups (i.e. young companies under 3 years old) can use a special scheme:</p><ul><li>For the first 100 thousand SGD of the annual income, the exemption is 100%, that is, the tax rate is 0%.</li><li>For the next 200 thousand SGD of the annual income (from 100 001 to 300 000) - 50%, that is the rate is equal to 8.5%.</li><li>More than 300 thousand SGD of annual income is taxed at the full 17% rate.</li></ul><p>   In addition, there is a tax discount of 50%, but not more than 20 000 SGD.</p><p>   Income from capital gains, dividends from foreign sources, income from branches in other countries and from services received from other states are exempt from taxation.</p><p>   Consequently, Singapore is a nonclassical offshore but midshore.</p><p><span style="text-decoration: underline;"><em><strong>Are the company in Singapore offshore when doing business outside the country?</strong></em></span></p><p>   Another characteristic feature of classic offshore is the lack of company activity in the country of its establishment. Classic offshore simply enough to have a registered address.</p><p>   What's in Singapore? Yes, a company can conduct its business outside the country, but to use tax benefits, the management and control of the company must be carried out from Singapore, as well as other legal requirements. On the other hand, in the Companies Act, there is a requirement to have a registered office of the enterprise (actual, not postal) in the territory of the jurisdiction.</p><p><span style="text-decoration: underline;"><em><strong>Is Singapore offshore in terms of reporting?</strong></em></span></p><p>   A company registered in a classic offshore company is exempted from the need to file annual financial statements. This is a definite plus. First, it allows you to significantly reduce the cost of maintaining the company. Secondly, a high level of confidentiality of cash flows is guaranteed.</p><p>   In Singapore, the same company submits a tax return every year, as well as an audit report. Of course, there are exempt companies that may not audit at an income of up to 10 million SGD. It is possible to change the deadline for filing a tax return, or to submit it to the Tax Authority electronically.</p><p>   Consequently, Singapore should not be equated with the classic offshore and in terms of reporting.</p><p><span style="text-decoration: underline;"><em><strong>Is Singapore an offshore in terms of publicity of the Registries?</strong></em></span></p><p>   In classic offshore registers of shareholders and directors are not public. This allows you to maintain confidentiality, control over funds and use this advantage of countries in international tax planning.</p><p>   In Singapore, the Registers of directors and shareholders are public. In addition, other Registers are maintained, which are provided to the authorized bodies only upon request, and to third parties are not available (hence, not public):</p><ul><li>Register of beneficiaries.</li><li>Register of nominee directors.</li></ul><p>   On this point, Singapore attributed to offshore will not work.</p><p><span style="text-decoration: underline;"><em><strong>Is Singapore an offshore in terms of compulsory capital payment?</strong></em></span></p><p>   In a classic offshore you can register a company without compulsory payment of the authorized capital. In other words, the process of establishing an enterprise is simplified and shortened.</p><p>   In Singapore, the same amount of paid-up authorized capital is purely symbolic - only 1 Singapore dollar. It can be increased at any time after registration. It is also worth noting that the establishment of the company in the jurisdiction takes 1-3 days due to a well-developed e-government system.</p><p>   So, Singapore in this case, as close as possible to the classic offshore.</p><p><span style="text-decoration: underline;"><em><strong>Is Singapore an offshore company in terms of the ease of closing the company?</strong></em></span></p><p>   Offshore company, registered in a classic offshore, is very easy to close. This is a definite plus.</p><p>   In Singapore, there are two options for the liquidation of a legal entity:</p><ul><li>Exclusion from the Companies Register (the procedure is 5-6 months).</li><li>Liquidation (takes approximately 1 year).</li></ul><p>   By the time of liquidation of the company, Singapore does not belong to offshore companies.</p><p> </p><p>Resume: Singapore should be attributed to the non-classical offshore but midshore. Here, a favorable tax system that allows you to reduce the tax burden to almost zero, the symbolic size of the authorized capital and the shortest terms of establishment of the company. Together with other advantages of jurisdiction Singapore can safely be called an ideal midshore country for the establishment of a foreign company.</p><p></p><p style="text-align: center;"><em>If you have any questions, <strong>Castle Family Office</strong> specialists are ready to answer them! Write to us at <strong><em><span face="Calibri" size="3"><span lang="EN-US"><span face="Calibri" size="3"><a href="mailto:info@castle-familyoffice.sg">info@castle-familyoffice.sg</a></span></span></span></em></strong> </em></p>