For an entrepreneur, having a world changing creative idea is a superb thing. Nonetheless it is equally important to discover a way to execute and turn that idea into a viable business. In Singapore, a corporate entity is the most frequent vehicle for a business owner to launch and execute his or her idea. For the new venture to reach your goals, an entrepreneur must ensure that the organization entity is established properly and in a timely manner.

Which kind of Business Entity to include?

Among the first decisions you need to make as a business owner is to decide the sort of business structure (i.e. legal entity) for your business. Your decision make a difference how much you pay in taxes, the image and perception of your business that you portray to your clients and suppliers, the amount of paperwork your business is required to do, the personal liability you face, and your ability to borrow money and  expand your business.

As a fresh startup, you may choose between a restricted Liability Company (“company” to be short), a restricted Liability Partnership, or a Sole Proprietorship. In the three choices, a Limited Liability Company is the innovative, flexible, and scalable structure in Singapore company incorporation. Additionally it is the most well-liked form of Singapore business entity for serious entrepreneurs.  A number of the key advantages of this structure include:

Limited Liability. This company structure is another legal entity, this means your individual assets are protected from your business liabilities.

Tax Benefits. A couple of significant tax advantages of companies in Singapore. For instance, your new company can pay no tax on the first S$100,000 taxable income for every of the first three tax filing years and no more than 8.5% on the first $300,000 profits every year. You can even claim tax deductions on your quest and development (R&D) expenses.

Professional Image. A corporation conveys a specialist image to your potential business partners, employees, and investors and creates a well balanced and strong base for future investment and growth.

Perpetual Existence. Since a company is considered another legal entity from its owner, it will keep on perpetually, even if the owner dies thus ensuring continuity of the business.

There are many other benefits to establishing a restricted liability company as your startup structure. For more information about other incorporation options, start to see the incorporation choices in Singapore guide.

Why Incorporate Early?

Once you've decided on the sort of business structure for your startup, you should proceed using its incorporation at the initial.  There are many advantages to such early action:

Name Protection. Early incorporation really helps to secure and protect your business name. After incorporation, you can protect the business name further by registering it as a trademark.

Legal Agreements. Many types of legal agreements (like a commercial lease for work place) can only just be signed by an adequately established business entity.

Intellectual Property Ownership. You could avoid future disputes about ownership of assets or intellectual property through timely incorporation.  Otherwise, your former employers or colleagues may be able to assert claims against you.

Equity Ownership. By incorporating early, you can set up a larger equity stake on your own in the business before value has been included in it.  A late incorporation may involve multiple parties, which is likely to dilute your equity stake in the business.

Raising Capital. Securing funding can often be a challenge for home based business owners, but it can be essential to ensure growth. Investors is only going to provide funds to a small business that has been properly incorporated. Additionally, many banks in Singapore have SME financing products, and are prepared to lend to new companies however, not to individuals.

Why Incorporate in Singapore?

Increasing numbers of entrepreneurs, corporations and ventures of all sizes across the world are using Singapore as the incorporation jurisdiction for their business. Their known reasons for choosing Singapore are manifold and include:

Singapore is ranked #2 on the globe by World Bank for simple conducting business in 2018

Singapore is ranked #4 on earth for having the best protection of intellectual property with the Global Competitiveness Report 2017-2018

Singapore is ranked #1 for getting the most open economy for international trade and investment with the Global Enabling Trade Report 2016

Singapore is ranked #1 on the planet for best business environment by Economic Intelligence Unit in its 2017 report

Singapore is ranked the third wealthiest nation in the world by Forbes magazine

Singapore is rated #6 on earth for country with least corruption perception by Transparency International in its 2017 report

Singapore is rated #1 for global talent competitiveness by INSEAD

Singapore is rated #4 in the world for quality of life for expats

Corporate tax rates are about 8.5% up to $300,000 profits and a set 17% above that

You can find no dividend or capital gains taxes in Singapore

There is no estate/death/inheritance tax in Singapore

Personal tax rates start at 0% and max out at 20% above $320,000

However, a very important factor to notice about incorporating is that you will need to complete some essential paperwork. Specifically, you will need to complete total annual meeting minutes, file an gross annual report with the state and keep your corporate records to be able.