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Any tips for Singaporean LLC setup with Nominee?

avalanche

Entrepreneur
Does anybody have any experience with Singapore LLC?

Just found an interesting service allowing to incorporate in Singapore. All foreign-owned LLC in Singapore must have a local nominee director. Same guys also provide Secretary, virtual office and they seem to be also arranging meeting with a bank for opening a corporate bank account. Unique feature of Singapore is: Nominee Directors are described in the law. Meaning there should be some legal mechanism that allows me to take away all the power from the Nominee and the Secretary.

What things to look out for to avoid having my corporate account drained by local secretary and nominee director one day? Amount of money is no joke for me and I would like to take all necessary measures to protect my money. Unfortunately, there is no other way other than to have locals in the business so I'd like to understand the risks. Asking my service provider makes no sense because most providers would do anything to advertise their product.
 

Outlander

Silver Member
Take care with paying for an introduction for opening a bank account there. From my experience, banks are very welcoming and you don't need an introduction service. And my company wasn't even Singaporean, so for local companies it should be super easy doing it by yourself.

As for what you can do to protect yourself, pay a lawyer to review your power of attorney. At the end of the day, there's nothing you can do to prevent trouble if you are dealing with crooks. So dig these guys reputation and have some peace of mind knowing that Singaporean law is harsh against those who break it.
 

avalanche

Entrepreneur
Take care with paying for an introduction for opening a bank account there. From my experience, banks are very welcoming and you don't need an introduction service. And my company wasn't even Singaporean, so for local companies it should be super easy doing it by yourself.

As for what you can do to protect yourself, pay a lawyer to review your power of attorney. At the end of the day, there's nothing you can do to prevent trouble if you are dealing with crooks. So dig these guys reputation and have some peace of mind knowing that Singaporean law is harsh against those who break it.
The thing is, I'm not even sure I would need a power of attorney here since I'm supposed to be the in the documents of incorporation. Furthermore the nominee director is described in the law of Singapore. Maybe there is some sort of official mechanism granting me full control over my company?
 

avalanche

Entrepreneur
What if I just open a bank account in Malaysia? Would Malaysian banks be alright with opening an account for a Singaporean LLC?

I heard that if you receive foreign sourced income outside Singapore on Singaporean LLC corporate bank account it is going to be tax-free. Is that right?
 

Outlander

Silver Member
I heard that if you receive foreign sourced income outside Singapore on Singaporean LLC corporate bank account it is going to be tax-free. Is that right?
This is correct. Your Singaporean LLC would pay taxes if the money is received in Singaporean bank, even if it has a foreign source. In the Malaysian bank, that wouldn't happen.
 

avalanche

Entrepreneur
This is correct. Your Singaporean LLC would pay taxes if the money is received in Singaporean bank, even if it has a foreign source. In the Malaysian bank, that wouldn't happen.
How come this is never advertised by anyone? This sounds like a perfect company to hold IP. Is there a catch?
 

avalanche

Entrepreneur
For foreign sourced CORPORATE income to be tax free when received in Singapore , generally, the income must be designated as foreign-sourced income performed through fixed place of operation in foreign jurisdiction outside singapore AND has already suffered foreign tax (headline tax of at least 15%). All these are of courses subjected to the company getting tax residency in Singapore, which could also possibly get you some double tax treaty concessions under Singapore's vast network of tax treaties.

For foreign-sourced PERSONAL income to be tax free when received in Singapore, things are much more straight forward. You just have to make sure that the income is not related to any trade, business or profession that you are performing in Singapore.
The idea is, what if I receive money on the bank account outside of Singapore? Meaning the bank account on my Singaporean LLC would be somewhere in Malaysia for example. Am I going to be taxed for this?

I am not living in Singapore, I am not performing operations in Singapore.
 

Wade7

New member
Hi @avalanche, did you end up finding a solution for setting up a Singaporean llc with a nominee? I could potentially help you on that matter.
 

avalanche

Entrepreneur
Hi @avalanche, did you end up finding a solution for setting up a Singaporean llc with a nominee? I could potentially help you on that matter.
I already found two companies. The largest challenge for me is the tax planning. Don't want to end up giving away half of my hardly earned money lol.
 

Anny08

New member
If you open bank acc outside of Singapore you will not pay tax in Singapore on income only in those case if in the source of income the tax rate the same as in Singapore or no less than 15%.
Malaysian banks don't open account to foreign companies, only for local.
you can set up Labuan co and open bank acc in Malaysia/Singapore.
 

avalanche

Entrepreneur
If you open bank acc outside of Singapore you will not pay tax in Singapore on income only in those case if in the source of income the tax rate the same as in Singapore or no less than 15%.
Malaysian banks don't open account to foreign companies, only for local.
you can set up Labuan co and open bank acc in Malaysia/Singapore.
Seems like IP tax is 24% in Labuan. Labuan doesnt seem to work for me :D
 

avalanche

Entrepreneur
oh, we trade a goods and pay 3%
Yeah I'm aware of 3% tax. Unfortunately, it does not apply to me. Intellectual property nowadays is taxed heavily everywhere (even in Hong Kong). Governments probably think we are just making something and then chilling forever lol. They don't even consider how hard it is to develop viable IP in the first place
 

zeytin

New member
If you open bank acc outside of Singapore you will not pay tax in Singapore on income only in those case if in the source of income the tax rate the same as in Singapore or no less than 15%.
if my client is a company in the United States and sending payments to Transferwise of my (not incorporated yet) Singapore company, will it be taxed? USA tax rate is over 15% but the money is paid for services (software development) as in independent contractor and USA company don't pay any taxes on behalf of Singapore company which would be absurd?
 

Admin

Forum Moderator
Staff member
You say it is your client in the USA that pay you to any company, right? So why would you need to pay taxes in the USA! - If taxes apply then to the person who receive the money not to the person that send the money.
 

zeytin

New member
You say it is your client in the USA that pay you to any company, right? So why would you need to pay taxes in the USA! - If taxes apply then to the person who receive the money not to the person that send the money.
That's the part I don't understand on IRAS govt. tax website.
I sell some service, I got paid, it should be foreign service income but no, they have to make it complicated.

Qualifying Conditions for Tax Exemption
Under Section 13(9) of the Income Tax Act, tax exemption will be granted when all of the following three conditions are met :
  1. The foreign income had been subject to tax in the foreign jurisdiction from which they were received (known as the "subject to tax" condition). The rate at which the foreign income was taxed can be different from the headline tax rate;
  2. The highest corporate tax rate (foreign headline tax rate condition) of the foreign jurisdiction from which the income is received is at least 15% at the time the foreign income is received in Singapore; and
  3. The Comptroller is satisfied that the tax exemption would be beneficial to the person resident in Singapore.
 
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