The Cost of Business: A Breakdown of Singapore Company Incorporation Fees and Taxes
Singapore is a popular destination for businesses due to its business-friendly environment, low taxes, and high standard of living. However, setting up a company in Singapore can be a complex and costly process. In this article, we will break down the costs associated with company incorporation in Singapore, including the fees and taxes that you need to pay.
Company Incorporation Fees
The cost of incorporating a company in Singapore varies depending on the type of company you want to set up. The most common types of companies in Singapore are private limited companies (Pte Ltd) and public companies (PLC). Here are the fees associated with incorporating each type of company:
- Private Limited Company (Pte Ltd): SGD 315 (approximately USD 230) for the first SGD 1 million authorized capital, and SGD 30 (approximately USD 22) for every additional SGD 100,000 authorized capital.
- Public Company (PLC): SGD 1,215 (approximately USD 900) for the first SGD 1 million authorized capital, and SGD 30 (approximately USD 22) for every additional SGD 100,000 authorized capital.
In addition to the incorporation fees, you will also need to pay for the following services:
- Preparation of company documents: SGD 500-1,000 (approximately USD 370-740)
- Submission of documents to the relevant authorities: SGD 500-1,000 (approximately USD 370-740)
- Obtaining a unique company number: SGD 30-50 (approximately USD 22-37)
- Obtaining a tax clearance certificate: SGD 30-50 (approximately USD 22-37)
Taxes in Singapore
Singapore has a tax-friendly environment, with a corporate tax rate of 8.5%. The tax rate is progressive, meaning that companies with higher profits are taxed at a higher rate. Here are the tax rates in Singapore:
- First SGD 300,000: 8.5%
- Next SGD 300,000: 11.5%
- Next SGD 500,000: 14.5%
- Profits above SGD 1 million: 17%
In addition to the corporate tax, companies in Singapore are also required to pay other taxes, including:
- Goods and Services Tax (GST): 7%
- Stamp Duty: 0.2-0.4% of the value of the document
- Payroll Tax: 2-3% of the employee’s wages
Other Costs to Consider
In addition to the incorporation fees and taxes, there are other costs that you need to consider when setting up a company in Singapore. These include:
- Rental or purchase of office space: SGD 5,000-50,000 (approximately USD 3,700-37,000) per year
- Staff salaries and benefits: SGD 3,000-10,000 (approximately USD 2,200-7,400) per month
- Marketing and advertising expenses: SGD 1,000-5,000 (approximately USD 740-3,700) per month
- Accounting and auditing fees: SGD 500-2,000 (approximately USD 370-1,500) per year
Conclusion
Setting up a company in Singapore can be a complex and costly process. However, with the right guidance and preparation, you can navigate the process and ensure that your company is set up correctly. It is important to consider all of the costs associated with company incorporation in Singapore, including the fees and taxes. By doing so, you can ensure that your company is financially stable and prepared for success.
FAQs
Q: What is the minimum authorized capital for a private limited company in Singapore?
A: The minimum authorized capital for a private limited company in Singapore is SGD 1.
Q: What is the corporate tax rate in Singapore?
A: The corporate tax rate in Singapore is 8.5%. However, the tax rate is progressive, meaning that companies with higher profits are taxed at a higher rate.
Q: Are there any taxes on dividends paid to shareholders in Singapore?
A: Yes, dividends paid to shareholders in Singapore are subject to tax. The tax rate on dividends is 20%. However, if the shareholder is a tax resident of Singapore, the tax rate is 0% if the dividend is paid out of the company’s taxed profits.
Q: Can I claim tax deductions for expenses incurred by my company in Singapore?
A: Yes, you can claim tax deductions for expenses incurred by your company in Singapore. The expenses must be incurred for the purpose of generating assessable income and must be supported by receipts and invoices.
Q: How long does it take to set up a company in Singapore?
A: The time it takes to set up a company in Singapore can vary depending on the complexity of the company structure and the speed at which the relevant documents are prepared and submitted. On average, it can take around 2-4 weeks to set up a company in Singapore.
