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Is Singapore truly a Tax Haven?

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BerlusconiSchmidt

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Mar 13, 2024
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I was looking into various Asian countries to minimise my corporate and personal Tax and I came across NZ and Singapore.

I read on this forum some users saying that Singapore corporate tax does not apply if your income is not sourced from Singapore and also if it's not remitted within Singapore,
however I could not find any info online regarding this. Is there any solid evidence that clearly says Singapore corporate Tax is not due when income is sourced and not remitted in Singapore?
Are there any real life examples of this?
 
It was mainly me promoting this idea. While there is many information available online. I‌ was in touch with Sovereign and they confirmed this as well. I posted the relevant‍ law in the other threads. You may want to read this one for example.
https://www.incorp.asia/blogs/singapore-offshore-company/
It you want to incorporate I am happy to send you my contact at Sovereign.⁠ You can also contact them on their website directly.
 
Do they ask for proof that the company is tax resident of another country tho?

And what about dividends, can they be issued to the directors even if the company is⁣ Tax exempt?
 
To answer the question in the topic line, it depends on how you define tax‌ haven and how you use your company. If by tax haven you just mean places‍ like BVI and Caymans where there's no corporate tax ever, Singapore doesn't qualify.

If you⁠ want to start a business in a low tax environment with access to a highly⁤ skilled talent pool, friendly regulations, strong banking sector, regional economic powerhouse, and one that looks⁣ good to potential investors or when making an exit , add Singapore to your shortlist.⁢

And if you run a Singapore company in a way that income doesn't derive from︀ and isn't transferred to Singapore, you can in many cases end up with a company︁ that's not subject to any local tax in Singapore (similar to BVI/Caymans).

Reference materials:
https://taxsummaries.pwc.com/singapore/corporate/taxes-on-corporate-incomehttps://www.iras.gov.sg/taxes/corpo...c-guide-to-corporate-income-tax-for-companieshttps://www.iras.gov.sg/taxes/corpo...ions-for-companies/taxable-non-taxable-incomehttps://www.iras.gov.sg/taxes/corpo...exemption-on-specified-foreign-sourced-income
Usually not.

Yes.
 
I see 2 main problems with the SG non resident company:

1. who will open‌ a bank account for a SG company?
2. since the company is managed outside SG‍ it could be considered tax resident where you are tax resident. You need to choose⁠ wisely your tax residency or constantly be on the move (at some point you'll be⁤ tired of that)
 
You just open any EMI like WorldFirst, Airwallex etc. Just make sure that it‍ is not in Singapore. Normally, the real director and owner opens the account.

Yes, that is true with all companies. I think we are mainly looking for a place⁢ that is safe not to ever get a tax bill from where you are incorporated.︀ Many people like the service in the lounge and in economy class.
 
Most banks/EMIs will‍ do, even wise does.

True, rather go live in a mismanaged place or be⁢ on the move.
 
I don't understand what SG has to gain by allowing this kind company: no taxes‌ paid in SG and no money flowing to SG banks.
 
Most of the non-Western world really.
TH is nice

Me neither tbh more than making⁤ their jurisdiction useful? And hence bringing more business to it.

They are very business friendly,⁣ their tax system is a good example of it.
 
Allowing this specific company to exists imho gives to‍ SG a "shady image" instead of "prestigious jursidiction" like they want to be⁠ perceiced.

It will attract bad PR and it's dumb because they already have mindshare for⁤ being a top holding location.

Do you mean for the company renewal? This is minutia.

What do you need accounting for if the company is tax exempt?

I assume that could⁢ be something you could do by yourself.
 
Well it is the same in USA in some states and⁠ US doesn't have "shady image" I think
Yeah like state fees to incorporate the company, renew it, do some changes, I don't︀ know how it works in SG in particular though

Isn't there audit / annual report︁ requirement in SG? So SG accountant is required. I'm not sure, I'm don't have much︂ knowledge about it
 
Ive spend some time today researching this and even tho the company is‌ tax exempt you have to keep books + do it with a local firm (usually‍ the one that set you up with the resident director).

Honestly Ive got no answer⁣ to this but hey Im not gonna be the one complaining.
 
US is in a league of its‍ own, the only thing that have similar is that if the company isn't managed from⁠ within the country doesn't pay taxes.

US allows non us residents to form companies in⁤ US and open bank accounts so that $$$ flow to US.

I'm not gonna complain either, i'm just⁢ specultaing on the fact that SG non resident company doesn't make any sense for SG︀ and IRAS could change that overnight like Cyprus did for the CY non resident company.︁

I wouldn't build my business on a temperary loophole.
 
They don't have much to gain but also not a lot to lose. It's a⁠ loophole that Singapore could close quite easily if they ever need to. It just doesn't⁤ seem to be a big enough problem. People looking for these kind of setups are⁣ often on a shoe string budget and go for Seychelles/Belize instead to save a few⁢ grand a year.

People are still paying a few thousand SGD a year for the︀ incorporation and accounting. If you employ people/contractors in Singapore (whom you could pay from a︁ foreign bank account), I guess that adds value to the local economy. I haven't looked︂ into whether that would create a taxable situation for the company, though, beyond payroll stuff.︃
 
What tax rate would this company pay then? I assume the corporate tax rate⁤ in the country of where you as a person is resident right ?
 
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