If you are thinking of expanding your business, you can consider setting up HQ in Singapore. Holding your company in Singapore is beneficial for a tax planning, you will receive royalty, dividends, interest or other income from your subsidiaries at lower withholding tax.
You could also apply for the Productivity and Innovation Credit Scheme (PIC) scheme, that would allow you to claim back 60% of their IT spending , capped at $100,000 per year. With Singapore’s vast network of double tax treaty with numerous countries, you will have no problem repatriating profits back to your overseas company when setting up HQ in Singapore.
In 2010 budget, Singapore government introduced PIC scheme that allows enterprises to enjoy up to 400% tax deduction or allowances or get a 60% cash payouts when they invest in innovation, research and development, automation, and training.
As an overseas company setting up in Singapore, you will be able to claim back 60% of your Internet Technology (IT) spending from up to $100,000 annually. IT spending cost includes to lease or acquire PIC IT and automation equipment like fax machine, computer, lap-top, laser printer, and software. If you have additional items that are packed with the purchase or lease of PIC IT and automation equipment, then you might visit the official site of IRAS to see how you should claim for PIC and receive discount in cash.
Thinking of incorporating in Malaysia? Let’s get started.
E A S I E R • F A S T E R • B E T T E R
All businesses that are eligible for the PIC Bonus are sole-proprietorships, partnerships, and companies that have:
Acquired at least $5,000 during the PIC-qualifying expenditure, particularly during the basis period of the YA where the PIC bonus is claimed.
Active companies and business firms operating Singapore, and
At least employing 3 local employees – Singapore citizens, or permanent residents of Singapore with CPG contributions – and excluding sole-proprietors, shareholders who are the directors of the company and partners under the contract for service
A business is said to have met the 3-local-employees condition if they contribute CPF during the payroll of at least any of its 3 local employees:
Where around 400% tax allowances and deductions are claimed on qualifying PIC expenditure, particularly during the last month of the basis period to which the allowances/deductions relates.
Or when the PIC cash payout option on qualifying PIC expenditure is claimed, particularly during the last month of the quarter or the combine quarters to which the cash payout option relates to.
This refers to the subsidy or the amount net of grant provided by the Government or any other statutory board.
If you are interested in reaping all the benefits this scheme has to offer, then you should have a very clear idea in mind on what you will do. At the end of your accounting year, make sure that you get all the necessary forms and to complete them and submit them before your company’s income tax return. You can also opt for a cash payout within this deadline; so do make sure to take everything into consideration.
The tax rates in Singapore attracts businessmen from all over the world to establish and operate their businesses in Singapore with its satisfactory corporate and personal tax rate, no capital gain tax and single-tier income tax system. Singapore corporate tax rate is one of the lowest in the Asia Pacific region, with the current rate being 17%.
At Paul Hype Page & Co, we provide you with the best tax advise if you would like to incorporate your company in Singapore. With the information you provide us on the type of work and business plan, we can assess the tax implication and assist client in their tax planning. Here is a list of services we provide:
Advice on how to repatriate the yearly profits to its ultimate owner (e.g. business trust, individual shareholder or overseas holding company)
Advice on how to handle withholding tax and payment issues
Information on the tax impact of the individual staff
Guide of how to structure the whole group, should your company hold direct shareholding