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Why singapore companies are the best choice For international business in 2019 – 20.03.2019

Owners of small and medium enterprises all over the world are confused.

On the one hand, they need companies established outside the countries of their residence to successfully conduct business internationally.

On the other hand, the use of simple solutions has become impossible as a result of increasing scrutiny towards companies that take advantage of tax havens. This development has been led by joint efforts between the governments of developed countries and several other governments from developing nations that aim to improve their reputation.

Even though it is impossible to prohibit using offshore companies, the prohibition itself was not necessary. Stemming from the efforts of international organizations promoting the idea that any tax optimization is illegal, and governments intimidating banks with fines and the revocation of licenses, it has become impossible to use traditional tax-free companies.

At the same time, the economic risks of business have grown to a scale that encapsulates the whole world. For example, even though some 10-15 years ago business conditions could be clearly divided into two camps — relative stability and security in developed countries and high risk in other places — now there are almost no stable business environments.

The growing contradiction between governments and entrepreneurs in developed countries has created uncertainty. Growing uncertainty means increasing business risks, in particular:

  • The rapidly changing legislation undermining the competitive position of small and medium-sized businesses;
  • Currency risks are higher than ever;
  • Real inflation rates are much higher than the official ones.

As a result, businesspeople have been forced to respond to such developments by looking for solutions that will allow them to work according to the new rules that have recently arisen.

Previously, we have offered our answer to the question of what the most efficient corporate structure for conducting international business according to modern rules is.

As such, let us dwell on the characteristics a businessperson should seek to ingrain within their foreign company to ensure that they are complying with the necessities of international business in 2019.

1. A foreign company should be a tax resident in a jurisdiction that is not recognized as a tax haven.

Since using companies registered in tax-free (offshore) jurisdictions has become impossible, it is necessary to choose a country of registration where residents must pay taxes in their countries of registration.

2. A foreign company should have a physical presence in the country of its permanent residence (domicile).

Therefore, it is necessary to choose a country that can provide such a presence.

3. The foreign company should conduct independent economic activity, document such activity, and have an independent economic value.

The fulfilment of such criteria is achieved through a redistribution of functions within the organization itself. In saying this, the need to independently quantify the value of a foreign company does not affect the choice of the country of its registration.

4. A foreign company may open a current bank account in the country of its incorporation.

This requirement seems simple only at first glance. In practice, banks resist opening accounts to companies that are managed and controlled by foreign citizens.

Given the instability of the modern banking system and the general alertness of banks towards customers, this criterion therefore excludes a number of countries, including popular ones as the United Kingdom, Estonia and Hong Kong.

5. A foreign company is registered in a jurisdiction where companies need to file financial reports and/or be audited.

Moving along the path of transparency requires entrepreneurs to be as open as possible, especially in regards to their finances. Therefore, when creating a corporate structure for international business, this must be taken into account.

These characteristics are dictated by the requirements of regulatory authorities.

Entrepreneurs wish the country in which they are planning to incorporate their foreign company for international business to have the following characteristics:

6. A high business reputation.

7. Understandable rules of the game.

8. Possibility of remote creation and maintenance of the company.

9. Reasonable cost of creating and maintaining a company.

10. Moderate taxation.

This list of requirements is indicative of why Singapore is the best country to create such companies as it meets all the listed criteria - surpassing other countries that could be considered by entrepreneurs.

For example, Singapore is better than other developed countries (a group of countries with a high business reputation) for creating a company geared towards international business because:
a) Singapore offers simpler rules and regulations; and
b) Less taxes need to be paid in Singapore.

In addition, Singapore is more suitable for creating a company for international business than other countries because:
a) Singapore has a higher business reputation that most developed economies;
b) The volume of the Singapore economy is over $USD300 billion – meaning that it can accept significant projects under its flag;
c) The population of Singapore - 5.5 million people - is enough to recruit staff with the necessary qualifications.

In addition, Singapore is one of the world's largest centres of international trade, maritime transport, and is also among the top five financial centres in the world.

Therefore, entrepreneurs representing various industries - from traditional trade and logistics to ultramodern e-commerce and financial technologies – can operate confidently under the Singapore flag.

And when considering that Singapore is managed based on the principles of meritocracy (“the power of the worthiest”), and Singapore’s economy has shown steady growth consecutively for over 60 years, choosing Singapore as the location for the establishment of your business with facilitate a sustainable path to development for many years to come.

Become part of the Singapore history of impressive commercial success. Register a Singaporean company for your business now!

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