New incorporation in Singapore

[Tasgall Wallace]

I currently have an ltd in St. Vincent, however my bank EPB blocked the account and told me to move it somewhere else.

Been looking around and one of the option that i was recommended is Singapore (apparently i have to create a new company there), however the price to set up a company there seems quite steep compared to a random offshore country (around 5k USD)...

My questions are:

1. is the price in line or am i being ripped off?
2. is Singapore really worth it? i was told other offshores may be blacklisted by banks in the near future
3. i have read around in the forum that BVI seems to be one of the most reliable offshore.... is it?

Thanks in advance for all the information!

A few information about my business:
- it's affiliate marketing 100% LEGAL
- as EU citizen i would exclude anything in Europe
- i have already a bank account at EPB that seems to be working fine
- my clients do not care about the location... the real limit is just the bank blacklist
- i do not need any employee

 

[James Turner]

Singapore is an option but expensive. Another option which is well liked by banks is Hong Kong. Hong Kong is a little cheaper than Singapore and is acceptable to EPB.

 

[Tasgall Wallace]

Singapore is an option but expensive. Another option which is well liked by banks is Hong Kong. Hong Kong is a little cheaper than Singapore and is acceptable to EPB.

do you think BVI or other offshores would be risky? i mean... when i talk with the different agencies it feels like other offshore countries may be blacklisted any day...

 

[Dubsize]

- as EU citizen i would exclude anything in Europe

Why would you exclude Europe? If it's because of reporting then you should be aware that Singapore and HK are reporting under AEOI.

 

[Stefano3323]

Yes the price they gave you is quite in line. As you are not resident in Singapore you need to pay for a local director (between $1,000-$2,000 per year) and a corporate secretary (around $1,000 per year). Plus if you want official incorporation documents to need to pay $80 to ACRA just to receive them. Quite a no-sense....

I found quite funny that a country like Singapore that got out from black list only few years ago is pointing the finger to other offshore jurisdiction. Anyway if you wanna avoid the problem of countries going from grey to black and save quite a lot, for your structure, you can totally look at places like Seychelles.

 

[awareoatmeal]

Yes the price they gave you is quite in line. As you are not resident in Singapore you need to pay for a local director (between $1,000-$2,000 per year) and a corporate secretary (around $1,000 per year). Plus if you want official incorporation documents to need to pay $80 to ACRA just to receive them. Quite a no-sense....

I found quite funny that a country like Singapore that got out from black list only few years ago is pointing the finger to other offshore jurisdiction. Anyway if you wanna avoid the problem of countries going from grey to black and save quite a lot, for your structure, you can totally look at places like Seychelles.

In this case for Tasgall, would the tax be collected in the EU country he is residing in? As the Seychelles IBC is a CFC in his resident country.

Another question, if I would like to optimize my tax legally using Seychelles IBC, what is the best way of doing it? (I am residing in country with territorial taxation system)

 

[Stefano3323]

Yes, doesn't matter where the company is, but where the Director lives.

If you wanna optimise just be sure the IBC is always in balance sheet equal to 0. So use the company to pay your personal expenses. You pay personal taxes only on the salary as you don't issue dividends, and IBC never makes profit because you pay everything via that.

 

[awareoatmeal]

Yes, doesn't matter where the company is, but where the Director lives.

If you wanna optimise just be sure the IBC is always in balance sheet equal to 0. So use the company to pay your personal expenses. You pay personal taxes only on the salary as you don't issue dividends, and IBC never makes profit because you pay everything via that.

So let's say if the IBC makes a huge profit, I pay myself a decent salary, pay personal tax on it, and squirrel the rest of the money into some investment vehicles/personal expenses and leave 0$ balance (or whatever is required as the minimum) in the corporate bank account?

To add to the question above: will the tax office require me to disclose the bank account statement to make sure I do not squirrel the money into some other accounts?

 

[negon]

To add to the question above: will the tax office require me to disclose the bank account statement to make sure I do not squirrel the money into some other accounts?

If you get into a tax check rest assured the tax office will ask you to provide supporting documents for your business which included bank statements, invoices and what else that can make the whole setup transparent to them.

 

[awareoatmeal]

If you get into a tax check rest assured the tax office will ask you to provide supporting documents for your business which included bank statements, invoices and what else that can make the whole setup transparent to them.

So you're saying I can't simply use money in the company bank account for personal expenses as mentioned by Stefano3323 or is there a way to get around this?

Another thing: there is no CFC rule in the country that I'm residing in (+territorial tax system), so I just pay myself dividends/salary, file tax on it, and leave the rest in the company's account?

 

[negon]

So you're saying I can't simply use money in the company bank account for personal expenses as mentioned by Stefano3323 or is there a way to get around this?

Yes that is what I say at least if it is for personal expenses wich you can't proof to be business expenses. I also don't belive that without professional legal assistance in case of a tax review you will get in deep trouble.

Another thing: there is no CFC rule in the country that I'm residing in (+territorial tax system), so I just pay myself dividends/salary, file tax on it, and leave the rest in the company's account?

If that is the case it should work.

 

[awareoatmeal]

Yes that is what I say at least if it is for personal expenses wich you can't proof to be business expenses. I also don't belive that without professional legal assistance in case of a tax review you will get in deep trouble.

If that is the case it should work.

Thanks for your valuable input auric! I'll need to get a confirmation with local tax specialist soon

 

[Stefano3323]

Every country has detailed guidelines of what can be considered business expense and what is not. i.e if you are out having lunch/dinner you can include that as a business meeting. Rent can be covered by the company, i.e. in Singapore is very common. Phone bills, equipments, car, travel tickets, hotels. Even some personal purchase can be included as corporate gifts to clients. Of course you need to keep record of it and need to make sense in your expenses, i.e. you claim a business meeting each day 24/7 maybe doesn't make much sense, but 3-4 times a week totally possible. The problem comes when you need to complete your accountant at the end of the year as for example in Italy you can claim only 50% of your phone bills as company expenses. So, the point is, it is possible but you need to follow the rules of the country where you are, so you start from the beginning to add only the right things and you keep things legit.

 

[DeepDrilling]

What provider did you use for the Singapore company formation OP ? can you share your experience please?

 

[fanban]

Can some say what the exact fee's are

a) total costs to setup company
b) total costs to maintain the company each year
c) total costs to renew the company each year.

 

[Stefano3323]

Can some say what the exact fee's are

a) total costs to setup company
b) total costs to maintain the company each year
c) total costs to renew the company each year.

That is not so simple as it depends from agent to agent.

a) Setting up a company costs around a couple of hundreds of dollars, but normally agents charges around $400-$800 for the set up
b) You need for sure: local director which goes $1,000-$2,000 a year, corporate secretary which goes for $800-$1,400 a year, and address which goes for $200-$1,500 a here. You also need to keep your books in order as you are in Singapore and an accountant or bookkeeping service goes to around $500-$4,000 based on the number of transactions.
c) renew of the company not sure, as you normally pay the agent every year.

So overall we are on a range of $3,000 up to as much as you need.... In my specific case, I have a company in Singapore but a the director is a business partner so we pay around $1,000 every year as we save on both address and director.

 

[fanban]

thank you, that was of great help! is there a particular reason to have your company setup in Singapore as an EU citizen or is it just because it fits your business?

What is the most significant reason to incorporate your business in Singapore that's what I research on.

 

[Stefano3323]

thank you, that was of great help! is there a particular reason to have your company setup in Singapore as an EU citizen or is it just because it fits your business?

What is the most significant reason to incorporate your business in Singapore that's what I research on.

It really depends of what you have to do with the company. I have incorporated both in Singapore and in Seychelles. Singapore it was a bit forced as the company operates directly in Singapore. Both jurisdictions are in grey zone. In general Singapore works very well if you are operating in Asian-Pacific as it has a very strong reputation compared to countries like Indonesia or Malysia, basically as good as Hong Kong. Also if you don't want to go with EMI solutions, a company in Singapore can get a corporate account with some of the best banks in the world, without having to go into the private banking division which means $10,000-$20,000 you are set, and the general fees are way better than other offshore countries. If you are operating around the globe, and cool to go fully digital (EMI), I prefer Seychelles. Simply because it is cheaper, faster and to be honest, I had much better experiences in Seychelles than Singapore on the same price range.

 

[fanban]

okay I see… seems it's not that easy to figure out if it is worth it for me! is there any general thing we can say about Singapore in matters of Privacy, tax or something for someone living in Europe / France?

 

[Stefano3323]

okay I see… seems it's not that easy to figure out if it is worth it for me! is there any general thing we can say about Singapore in matters of Privacy, tax or something for someone living in Europe / France?

Mh I'm not a tax expert and neither French, so you should totally speak with someone that works with those things. What I can tell you is that Singapore is in Grey zone so technically IRAS (tax authority in SG) should communicate to you are a shareholder in a SG company. But, because you are obliged of having a local director you are just a shareholder, so your name will appear only when someone run a pay check via ACRA website. As you are not the director, technically you should be entitle to pay only personal tax in France, and not the corporate, but take it with a pinch of salt, because I'm not sure about it, and for sure you need the opinion of a tax expert for this.