Switzerland vs Singapore vs Hong Kong Tax Set up for Foreign income?
- Thread starter banafinfodafuggiano
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Lot's of troubles with Hong Kong setup in the past from reading various threads around OCT. The choose between Singapore and Dubai is easy for me after reading the thread and indeed Singapore may win depending on what the situation is.
Thank you for the interesting topic. I'm in somewhat similar situation (not e-commerce though) and now I'm seriously considering incorporating in Singapore.
Thanks @Sols and @Don for some great pointers.
Since this setup isn't as easy as some others I would like to ask couple of questions.
It seems that incorporating a company in Singapore doesn't make it a tax resident there. Even though local director is required, seems to me that IRAS doesn't consider nominee directors as enough substance for company to be a tax resident there. Instead, they consider company to be a tax resident where business is controlled and managed. I wonder︀ what kind of proof do they require for that? If my company only has a︁ nominee director and secretary in SG (required by law), and only 1 natural person shareholder︂ (me), would they ask for my proof of address in another country like an utility︃ bill? I'm a resident in Dubai, which could cause issues because UAE CIT also affects︄ foreign companies with PE but that's another problem and I don't want to steer conversation︅ away from SG tax law.
So far, I'm resident outside of SG and all the︆ effective control is done outside so my SG company is not a tax resident in︇ SG? If that's the case then I don't think rules like Section 13(8), 13(9) would︈ apply to me if I remit funds to SG because the first sentence requires company︉ to be a tax resident in SG: "Singapore tax resident companies may enjoy tax exemption︊ on specified foreign-sourced income that is remitted into Singapore." (Companies Receiving Foreign Income). If that's correct then I also wouldn't be able to use lower CIT for the︋ first three years if I remit any funds to SG (my SG company wouldn't be︌ SG tax resident). "The new start-up company must also: 1) Be incorporated in Singapore; 2)︍ Be a tax resident of Singapore for that YA" (IRAS | Corporate Income Tax︎ Rate, Rebates & Tax Exemption Schemes).
That mens remitting in my case would require️ paying 17% CIT which I won't do then. Do you know if I'm allowed to use SG emi like Aspire for currencies like EUR,GBP,USD? With Aspire you get a Currency Cloud bank account details in the UK (BIC:TCCLGB3L) for GBP and EUR so hopefully that wouldn't be considered as funds remitted? For SGD they use DBS which would be in the scope of 17% CIT.
When it comes to traditional banks accounts I could follow up with Don about what he suggested with registering PE in Estonia and hopefully getting a bank account there. This would also help me out with avoiding PE in Dubai︀ I suppose.
What do you guys think, did I miss something, do you see any︁ weaknesses in my plan? Thanks
Thanks @Sols and @Don for some great pointers.
Since this setup isn't as easy as some others I would like to ask couple of questions.
It seems that incorporating a company in Singapore doesn't make it a tax resident there. Even though local director is required, seems to me that IRAS doesn't consider nominee directors as enough substance for company to be a tax resident there. Instead, they consider company to be a tax resident where business is controlled and managed. I wonder︀ what kind of proof do they require for that? If my company only has a︁ nominee director and secretary in SG (required by law), and only 1 natural person shareholder︂ (me), would they ask for my proof of address in another country like an utility︃ bill? I'm a resident in Dubai, which could cause issues because UAE CIT also affects︄ foreign companies with PE but that's another problem and I don't want to steer conversation︅ away from SG tax law.
So far, I'm resident outside of SG and all the︆ effective control is done outside so my SG company is not a tax resident in︇ SG? If that's the case then I don't think rules like Section 13(8), 13(9) would︈ apply to me if I remit funds to SG because the first sentence requires company︉ to be a tax resident in SG: "Singapore tax resident companies may enjoy tax exemption︊ on specified foreign-sourced income that is remitted into Singapore." (Companies Receiving Foreign Income). If that's correct then I also wouldn't be able to use lower CIT for the︋ first three years if I remit any funds to SG (my SG company wouldn't be︌ SG tax resident). "The new start-up company must also: 1) Be incorporated in Singapore; 2)︍ Be a tax resident of Singapore for that YA" (IRAS | Corporate Income Tax︎ Rate, Rebates & Tax Exemption Schemes).
That mens remitting in my case would require️ paying 17% CIT which I won't do then. Do you know if I'm allowed to use SG emi like Aspire for currencies like EUR,GBP,USD? With Aspire you get a Currency Cloud bank account details in the UK (BIC:TCCLGB3L) for GBP and EUR so hopefully that wouldn't be considered as funds remitted? For SGD they use DBS which would be in the scope of 17% CIT.
When it comes to traditional banks accounts I could follow up with Don about what he suggested with registering PE in Estonia and hopefully getting a bank account there. This would also help me out with avoiding PE in Dubai︀ I suppose.
What do you guys think, did I miss something, do you see any︁ weaknesses in my plan? Thanks
Thanks Marzio.
In my simple case, entire company would consist of secretary and nominee director in SG (required by law) and me (100% shareholder resident in Dubai) paying myself everything after expenses. I would be managing the company. Would it work?
In my simple case, entire company would consist of secretary and nominee director in SG (required by law) and me (100% shareholder resident in Dubai) paying myself everything after expenses. I would be managing the company. Would it work?
Wish I had more experience in this field to tell you.
I guess it depends on the purpose.
In the EU its highly regulated and even for sharing information about arms deal requires a license, and according to the policy of the European Investment Bank (EIB), the defense industry is in the same category as gambling and prostitution, meaning EU investment funds are not allowed to invest into such firms despite ongoing war.
I guess it depends on the purpose.
In the EU its highly regulated and even for sharing information about arms deal requires a license, and according to the policy of the European Investment Bank (EIB), the defense industry is in the same category as gambling and prostitution, meaning EU investment funds are not allowed to invest into such firms despite ongoing war.
Obviously it wouldn't work if you are managing the company from UAE.
But even if the company would be considered tax resident in Singapore you would pay 17% CIT so there's no point sweating to make the company tax resident in Singapore if you don't add to the mix another piece to the puzzle.
If income you︁ are bringing in SG isn't taxes somewhere else through an offshore branch or a subsidiary︂ you will be subject to SG CIT.
I highly suggest you to revise your plan.︃
But even if the company would be considered tax resident in Singapore you would pay 17% CIT so there's no point sweating to make the company tax resident in Singapore if you don't add to the mix another piece to the puzzle.
If income you︁ are bringing in SG isn't taxes somewhere else through an offshore branch or a subsidiary︂ you will be subject to SG CIT.
I highly suggest you to revise your plan.︃
@banafinfodafuggiano can you post just country you decided to setup your business please? I'm looking at Singapore but extremly expensive, I also looked at Switzerland, again extremly expensive to setup company there.
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