• Variable Capital Companies – New Legislation in Singapore

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    Singapore's Funds Industry is changing thanks to the Variable Capital Companies Bill that was passed by the parliament on October 1, 2018. Variable Capital Companies (VCC) is a corporate identity of sorts, but it’s not founded under the Companies Act.

    Rather, a VCC is founded under the VCC Act, so different laws will apply.

    When a VCC is formed, it’s possible to form the entity as a:

    • Standalone fund
    • Umbrella fund

    Standalone funds are funds that can only have one fund, but an umbrella fund can be a subset of funds, with each having its own assets.

    Under the formation of a VCC, the entity will be allowed to have:

    • Shareholders
    • Fund managers regulated by the MAS
    • Custodian of assets (required in some circumstances)
    • Board

    A VCC’s board is essentially a board of directors. The board will have fiduciary duties, and it’s the responsibility of the board to act in the best interests of the company.

    Why VCC’s Are Needed, and The Advantages They Offer

    Traditional incorporation is limited when a fund is setup, and a main issue is the place of domicile. Restrictions on funds have led to many would-be funds to be incorporated in other jurisdictions, even when the fund is managed in Singapore.

    This is a lot of extra “red tape” for a fund, but it has become a necessity under the Companies Act.

    VCC funds allow for a new fund structure in Singapore, which allows for funds to be created without all of the “red tape” and limitations. This allows for the country to offer funds that are similar to other jurisdictions where funds tend to migrate to despite management remaining in Singapore.

    Investors will have more choices, and funds will be able to stay in Singapore thanks to the VCC.

    From an advantage standpoint, these funds also allow for:

    • Re-domiciliation
    • Cost efficiency
    • Greater flexibility

    Flexibility is what many funds have been lacking under the Companies Act. But under the VCC, there is far more flexibility keeping these funds within Singapore. Funds can now be open-ended or closed-end. What does this mean?

    • Investors can redeem their investment in the fund (open-ended)
    • Investors are restricted when trying to redeem their funds (closed-ended)

    Investors will be able to invest in either fund type, and this is advantageous. When speaking of a closed-ended fund, this is a fund, such as a venture capital or private equity fund, where there are fixed shares and the ability to redeem investments has restrictions.

    Shareholder approval to redeem shares is not required, depending on the issuance, so it’s possible for investors to enter and exit a fund whenever they see fit. VCCs will also be able to pay shareholders differently.

    Dividends will be able to be paid out of the company’s capital rather than out of profits only.

    Capital reduction restrictions are not in place with a VCC as they are with a traditional company. Fund managers will have further flexibility when dispersing dividends as a result of the capital reduction lift that VCCs offer.

    Accounting Standards of a VCC

    VCCs have options when it comes to accounting, so it’s possible to choose among different accounting standards. What does this mean for a fund? A few things.

    • Singapore standards can be used
    • International Financial Reporting Standards can be used
    • US Generally Accepted Accounting Principles can be used

    Recognized international accounting standards can be employed. This is of the utmost importance because it allows the fund’s accountants to use standards that they have the most experience with using.

    The needs of the investor are better served as a result, too.

    Fund managers will be able to view and choose an accounting standard that is best for investors or jurisdictions where assets are located. When a fund is trying to lure investors from another country into the fund, different accounting standards may offer additional benefits.

    When using a VCC, it’s possible to have an advantageous accounting standard that is not possible under the Companies Act.

    There are also scale and cost efficiencies that can be met thanks to the new structure.

    Cost Efficiencies Realized

    Cost efficiencies and savings can also be realized under a VCC that is not possible under the Companies Act. A few of the cost benefits that may be realized are:

    • Sub-funds, or those that are created under an umbrella fund, can have the same:
      • Custodian
      • Fund manager
      • Board
      • Auditor
    • Safeguards for all sub-fund assets from other fund liabilities
    • Sub-fund wound up must be done separately

    Sub-funds are safeguarded under the new Act, and this is one of the biggest potentials of a VCC. When a sub-fund goes insolvent, only the assets of the fund will be impacted. This means that other sub-funds under the umbrella cannot be used to discharge liabilities of another fund.

    Safeguards protect each fund, which must be wound up separately.

    Transfer of Foreign-Domiciled Funds

    Foreign-domiciled funds are now able to be re-domiciled to Singapore. These funds can be put into a VCC, but there must be a regulatory framework within the jurisdiction that allows for a similar type of fund or vehicle to be created.

    Under the Companies Act, funds that were of the CA-type could be re-domiciled, but no other fund had this option.

    Restrictions on transferring of funds kept many funds from re-domiciling into Singapore, an option that may have been cost beneficial for the fund. Restrictions under the Companies Act also dictated the size of the fund, which would have to be “larger than a small company.” The main issue is that most funds are small in size, so this stopped a lot of foreign funds from choosing to be transferred.

    The small company requirement no longer needs to be met.

    The potential for the number of funds that can be transferred to Singapore has now increased as a result. It's important to realize that the new Bill will allow for similarly structured funds that are similar to a VCC will have a much easier time transferring to Singapore under the new Act.

    It's also possible that a fund restructures before re-domicile so that they can enter Singapore as a VCC.

    Singapore has also made provisions for assets and liabilities of a fund be transferred to a new VCC. This will allow a fund that is not structured like a VCC to transfer all of their assets and liabilities without structural issues holding the process up.

    Fast and efficient, the transfer can be done through a simple registration process.

    When a re-domiciliation does occur, it does allow for the fund to:

    • Retain its identity
    • Retain its fund history

    Funds that were created outside of Singapore and that have chosen to utilize Singapore’s experienced fund managers may have more of a benefit to re-domicile the fund.

    The Variable Capital Companies Act is not yet enforced, and the Act will be in force in 2019. What is beneficial about the VCC framework is that it allows for many of the same features that the Companies Act offers while catering to the needs of investment funds.

    This means that:

    • The MAS will be in charge of meeting the anti-laundering and countering obligations.
    • The Act will be administered by the Accounting and Corporate Regulatory Authority.
    • A register of shareholders will need to be kept, and the register will need to be furnished upon request. However, the register does not need to be made public unless a request is made.

    Singapore’s fund ecosystem is expected to grow as a result of the VCC. The VCC helps bridge the gap that has caused many investment funds to incorporate in other jurisdictions because the framework has not been beneficial for funds.

    Now, the VCC allows for a new framework where funds can be set up in Singapore.

    Re-domiciliation of foreign funds is also expected to help boost the ecosystem, creating a more robust fund environment.

    Several professionals that familiarize themselves with the Bill and the new VCC structure will benefit, too. These professionals include:

    • Accountants
    • Lawyers
    • Tax professionals

    Accounting professionals will have increased responsibilities for their clients. These professionals will need to help their clients choose the best accounting standard as well as support their clients with their financial statements using numerous accounting standards.

    Administrative burdens of fund managers in Singapore will also be alleviated.

    The VCC framework is going to change the way that funds are created and re-domiciled in Singapore, and it’s important that all servicing professionals understand the benefits of the VCC and how it will change investment funds.

    VCC introduction to Singapore will be a “game changer” for the fund management industry, and it will complement and expand fund structures currently available. Safeguards for investors are in place, thanks to the Monetary Authority of Singapore regulating fund managers. Gall funds will be subject to anti-money laundering and terrorist financing requirements, too.

    The change is expected to boost the country’s economy, creating up to 1,000 new jobs in the next two years.

    Singapore-based companies will also be able to benefit financially from the new corporate structure, so it’s a win-win for the economy, fund professionals and investment funds in Singapore.

  • Taiwan vs Singapore a Comparison - Sandhurst

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    Taiwan and Singapore are two popular, optimal choices for an offshore financial centre.  The two countries have their own benefits and drawbacks, but they remain two of the top destinations for offshore financial centres.

    Taiwan as an Offshore Financial Centre

    Taiwan is often considered an “unnoticed Asian tax haven,” and the country is very “modern.” A natural person or a foreign investor can setup a company in the country. You'll be able to choose among the following business entity types:

    • Limited Liability Company
    • Branch Office
    • Representative Office
    • Subsidiary Company
    • Company Limited by Shares

    When setting up a company, you’ll have to provide 3 – 5 company names, which will all undergo a preliminary check by the government to ensure that no conflicts exist. All of the names will need to be provided in Chinese.

    If a name is already in use, you may be able to add additional words to it to make it unique.

    Import/export registration is available as well, and this would allow for a formal English name to be used for the company.

    Opening a business in the country takes just seven steps, and it’s easiest to use a professional firm to help you with the process. These steps include:

    • Preparing all of your legal documentation
    • Picking your business address
    • Picking your business items
    • Choosing and reserving a company name
    • Preparing your company seal
    • Remitting capital and opening your first company bank account
    • Picking a responsible person

    For the purpose of this article, we’ll assume a company is being formed, and this will require:

    • Key people to be assigned
    • An application for approval of foreign investors submitted to the Investment Commission of the MOEA
    • CPA certification that the capital invested is adequate
    • Application sent to the MOEA to examine and certify foreign equity investment
    • Register as a tax-paying entity
    • Apply for any required licensing
    • Apply for any required health or labor insurance

    Annual documents are required, depending on the entity chosen, which may include:

    • Business report
    • Balance sheet
    • Profit and losses statement
    • Changes in shareholders’ equity
    • Statement of cash flows
    • Allocation of net income and retained earnings proposal

    Non-resident companies are only taxed on income derived from Taiwan sources, but resident companies are taxed on worldwide income.

    Corporate tax rates in Taiwan were a flat 17% for a long time, but as of January 1, 2018, this rate was raised to as much as 20%. Taxable income up to TWD 120,000 is exempt, but afterward, a 20% rate is applied.

    Tax rates are adjusted to 18% (2018) or 19% (2019) if taxable income is less than TWD 500,000. Non-resident companies are only taxed on income derived from Taiwan and would follow the same tax structure as mentioned above.

    Double taxation treaties also exist with 28 other countries, including Singapore, UK and Germany.

    Tax compliance is ranked the 30th easiest in the world, so Taiwan is a great option for doing business.

    Taiwan’s workforce is highly skilled, and there are labor rights and safeguards aimed at protecting employees. The Labor Standards Act sets labor conditions in the country, and the minimum wage in 2018 is NTD 22,000 per month.

    Social security and pensions are available, and there are also fringe benefits that all companies must provide to their employees. Workers’ compensation is also required.

    Taiwan's population has swelled to over 23 million people, and it exists as a thriving democracy with a highly attractive export market. Taiwan is a centre of excellence, and it has high standards for IT, technology and science.

    Literacy stands at over 80% in the country, and 95% of students continue their education past the age of 15 when compulsory schooling ends. Around two-thirds of students taking the national university entrance exams will be accepted into a higher education program.

    A concern in the country is that the population decline will continue, and by 2023, it’s projected that the number of higher education enrollments will drop by a third. This will have a major impact on the availability of a skilled workforce.

    As it stands today, Taiwan offers a vibrant economy and ample labor force that can help fill the ranks of an offshore financial centre. The decline in population will remain a real concern, with the possibility that workforce scarcity may drive up salaries and cause immense competition in the workforce.

    Singapore as an Offshore Financial Centre

    Singapore is slated to overtake the United Kingdom as the second-largest offshore financial centre in the world. Estimates suggest that $1.7 trillion in offshore money will be kept in the country by 2020.

    Switzerland still remains the leader in offshore financial centres.

    The Singapore government has done a lot to make it easy to incorporate a business in the country and remain compliant.

    Comprehensive double taxation avoidance agreements are also in place, with over 50 agreements to date. There are a multitude of free trade agreements, and strict enforcement of intellectual property makes it a great choice for startups.

    When registering a business, the entity’s name must be approved before incorporation. This is the same premises in Taiwan, and the idea is simple: a business name needs to be approved so that no confusion over the name exists. This is a safeguard that the government offers in an effort to ensure that businesses don’t infringe on the trademarks of another entity.

    Once approved, you’ll also need to do the following before registering your company:

    • Appoint at least one resident director
    • Create or appoint a physical Singapore registered address
    • Paid-up capital of a minimum of S$1 must be provided to register the company

    When a non-Singapore resident would like to incorporate in Singapore, by law, it is required that the registration of the business be conducted by a professional firm. The professional firm will guide all business owners through the process and explain any future steps that need to be taken for the business to remain compliant.

    If an owner plans to move to the country, additional requirements must be met. This will include obtaining one of the following:

    • Entrepreneur Pass
    • Employment Pass

    Name approval can take a few days or weeks, and this is the longest part of the registration process. The base registration process may be completed in as little as a few hours in some circumstances.

    Annual filings are required in Singapore, and all licenses must be kept current. The annual filings will include:

    • Financial statements
    • Chargeable income filing
    • IRAs filing of your annual tax return
    • ACRA filing of your annual return
    • Annual general meeting
    • Financial statement audit

    The financial statement audit depends on how many employees the business maintains as well as the amount of annual income earned. Not all entitles will need to undergo a financial audit.

    Within six months of incorporation, you’ll need to appoint a qualified company secretary.

    Once incorporation is complete, you can open a bank account at any major bank in Singapore. Business licenses will need to be obtained for most business activities, but the professional firm assisting with registration will be able to assist you in this matter.

    Companies that expect to have revenue of S$1 million or more will need to register to pay Goods and Services Tax. This tax, which stands at 7%, will be charged to the client as a tax for the goods or services provided.

    This tax is the same as a VAT or sales tax in other countries.

    Taxes are very friendly and straightforward. The first S$300,000 in annual profits will pay less than 9%. Annual profits after the S$300,000 mark will be subject to a flat tax percentage of 17%.

    Singapore’s workforce is considerably small with just 5.7 million people.

    While the workforce may be small, this doesn’t mean that it’s not a vibrant workforce. The smaller workforce has a great education system that focuses on high achievement. Often considered “go-getters,” the workforce focuses on being lean and:

    • Adopting new technology rapidly
    • Innovating at a faster pace
    • Keeping productivity at high levels

    Labor force participation is over 67% in the country, and females are increasingly entering the workforce. More than half, or 54.6% of people in Singapore has a diploma or hold a degree of some sort.

    Singapore has one of the lowest tax rates in the world, and that is what has helped the country move up as one of the top financial centres in the world.

    There are ample reasons to start an offshore financial centre in both Taiwan and Singapore. Taiwan has a larger workforce, although there are fears that the workforce is shrinking. This shrinking workforce needs to be offset to allow the country to remain a reliable choice for an offshore centre.

    While the workforce is substantially smaller than Taiwan, Singapore continues to impress with a very high level of the workforce holding a degree of some sort. There is also the key benefit that the workforce has been adopting new technology at a fast pace, and productivity has remained a key point in the country’s work environment.

    Both countries are a great choice for an offshore financial centre, but Singapore may offer an easier business setup and maintenance.

  • Puerto Rico vs Singapore a Business Comparison

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    Puerto Rico, a tax haven for the wealthy, and Singapore, ranked among the most prominent offshore financial centres in the world. Both regions provide benefits to new businesses and those looking to expand operations overseas.

    Puerto Rico as an Offshore Financial Centre

    Puerto Rico has developed a reputation as being a haven for the ultra-wealthy, but there’s a reason why so many entrepreneurs and businesses are moving to the island: it offers tremendous tax benefits.

    The United States is one of the only remaining countries that taxes its citizens no matter where in the world they live – unless they denounce their citizenship. Puerto Rico, an unincorporated U.S. territory, is the only place where U.S. citizens can avoid federal taxes without giving up their U.S. citizenship.

    But Puerto Rico also offers other benefits for businesses and has long been considered an offshore financial centre.

    Along with a streamlined registration process, taxes are favorable and the workforce is skilled. Intellectual property is protected by U.S. law, and all goods manufactured in Puerto Rico receive a “Made in the USA” sticker.

    Setting Up a Business in Puerto Rico

    Puerto Rico recognizes several entity types, including:

    • Sole proprietorship
    • Partnership
    • Limited liability company (LLC)
    • Limited liability partnership (LLP)
    • Corporation

    Choosing an entity type is the first step in launching a business in Puerto Rico. Additionally, it must be decided whether the business will be taxed as an individual, a corporation or apply for decrees.

    Once an entity type is chosen, the business must register with the Puerto Rico Department of State and with the Internal Revenue Service (IRS) to obtain an Employer identification Number.

    Next, the business must register with Hacienda as a taxpayer. The business may also register online for the Sales & Use Tax (IVU) to receive its Merchant Registry instantly.

    After finding a location to do business, the company must register with the Municipalities to obtain a Use Permit. Additionally, the business must register with the Municipality for the Volume of Business tax as well as the Municipal Sales & Use Tax (IVU Municipal).

    If hiring employees, the company will need to register with the Department of Labor and Human Resources and/or the State Insurance Fund.

    Yearly Corporate Compliance

    • All businesses operating in Puerto Rico must register with the Compulsory Business Registry by July 15th each year.
    • Accounting and financial records must comply with the General Accepted Accounting Principles.
    • Businesses in Puerto Rico that bring in revenue of more than $300,000 must retain the services of a licensed CPA (chartered public accountant) to file their business returns, financial statements, property tax and income tax.
    • Businesses, with the help of their CPA, must file an annual balance sheet and corporate report.
    • Businesses must subscribe to a workmen’s insurance policy.


    Doing business in Puerto Rico offers tax advantages thanks to the passage of Act 20 and Act 22, including:

    • 4% income tax rate
    • 100% tax exemption on distributions from profits and earnings
    • 90% exemption from personal property taxes for certain business types
    • 100% exemption from income tax on interest, dividends and capital gains for residents
    • 100% property tax exemption for the first 5 years for some startups
    • 60-90% municipal tax exemption for qualified businesses
    • 50% tax credit on research and development expenditures

    Companies that manufacture plant or taxable resale items can fill out a Certificate of Exemption to avoid sales and use tax. The document is valid for three years.

    Ease of Doing Business

    According to the World Bank, Puerto Rico ranks 60 among 190 economies when it comes to ease of doing business.

    Getting credit is relatively easy in Puerto Rico compared to other countries.

    Trained Workforce

    Puerto Rico offers a skilled and trained workforce at a lower cost. The average wage in the country is $28,740 per year compared to $49,630 in mainland U.S.A.

    Puerto Rico produces 22,000 STEM graduates each year, according to the Puerto Rico Science, Technology and Research Trust.

    Singapore as an Offshore Financial Centre

    Singapore’s close proximity to Indonesia, China and other large markets has helped make the country one of the fastest-growing offshore financial centres in the world – ranking only behind Switzerland.

    Singapore’s business-friendly environment has made it a haven for foreign entities and entrepreneurs.

    Setting Up a Business in Singapore

    Singapore has taken great strides to make incorporation as easy as possible.

    First and foremost, a business name must be approved before proceeding with formal incorporation. The name approval process can take up to a few weeks and is the longest part of the registration process. Once the name is approved, the business must:

    • Ensure that it has a physical, registered address in Singapore
    • Appoint at least one director, who must be a resident of Singapore
    • Have paid-up capital of at least S$1

    Foreigners who wish to register a business in Singapore must do so, by law, through a professional firm. The firm will guide the business owners through the process of incorporation and explain the steps the company must take to remain compliant.

    Additionally, the owner may need to obtain either an employment pass or an entrepreneur pass if the goal is to move to the country.

    Yearly Corporate Compliance

    Singapore requires all businesses to submit annual filings, which must include:

    • IRAs filing of your annual tax return
    • Financial statements
    • Financial statement audit
    • ACRA filing of your annual return
    • Chargeable income filing
    • Annual general meeting

    The financial statement audit will be dependent on how many employees the business has and the amount of annual income generated by the business. Some businesses may be exempt from financial audits.

    Other compliance rules include:

    • All businesses must appoint a company secretary within six months of incorporation.
    • Most business activities require specialized business licenses.
    • Companies that generate excess of S$1 million will need to register to pay Goods and Services Tax (GST), which is 7%. GST is similar to VAT or sales tax.


    Singapore maintains double taxation agreements with more than 50 countries and free trade agreements with several other countries.

    Resident Singapore companies are eligible for a partial tax exemption, which translates to:

    • 8.5% tax rate on taxable income up to S$300,000 per year.
    • 17% tax rate on taxable income over S$300,000 per year.

    Singapore also offers several tax schemes that help businesses enjoy lower tax rates.

    Start-up Tax Exemption (SUTE) Scheme

    • $100,000 in taxable income: 0% tax rate
    • $200,000 in taxable income: 2.55% tax rate
    • $300,000 in taxable income: 3.4% tax rate
    • $400,000 in taxable income: 5.10% tax rate
    • $500,000 in taxable income: 7.2% tax rate
    • $1,000,000 in taxable income: 12.10% tax rate
    • $2,000,000 in taxable income: 14.55% tax rate
    • $3,000,000 in taxable income: 15.37% tax rate
    • $5,000,000 in taxable income: 16.02% tax rate
    • $10,000,000 in taxable income: 16.51% tax rate

    To be eligible, the company:

    • Must have no more than 20 individual shareholders
    • May not have an individual hold at least 10% of the issued shares (for corporate shareholders)

    Property and investment holding businesses are not eligible for this scheme.

    Partial Tax Exemptions

    Companies that do not qualify for the SUTE scheme will be eligible for the partial tax exemption, which is as follows:

    • $100,000 in taxable income: 4.85% tax rate
    • $200,000 in taxable income: 4.97% tax rate
    • $300,000 in taxable income: 5.02% tax rate
    • $400,000 in taxable income: 6.77% tax rate
    • $500,000 in taxable income: 8.82% tax rate
    • $1,000,000 in taxable income: 12.91% tax rate
    • $2,000,000 in taxable income: 14.95% tax rate
    • $3,000,000 in taxable income: 15.64% tax rate
    • $5,000,000 in taxable income: 16.18% tax rate
    • $10,000,000 in taxable income: 16.59% tax rate

    Avoiding Double Taxation

    The Inland Revenue Authority of Singapore (IRAS) provides a foreign tax credit (FTC) scheme which allows the business to claim a tax credit for taxes paid to a foreign country against the Singapore tax that is payable on the same income.

    Two types of tax credits are available:

    • DTR (double tax relief): Singapore participates in more than 20 free trade agreements, and 74 comprehensive and 8 limited Avoidance of Double Tax Agreements.
    • UTC (unilateral tax credit): Applies to foreign tax paid by Singapore tax residents in countries where there are no double tax agreements.

    UTC may only be used when repatriated income is generated by:

    • Dividends income.
    • Royalty income not borne by a resident or permanent establishment in Singapore, or is not deductible against income derived or accruing in Singapore.
    • Employment income.
    • Income from consultancy, professional and other services.
    • Branch profits.

    Ease of Doing Business

    Singapore ranks number 2 among 190 economies in ease of doing business, according to the World Bank’s ratings. Singapore is second to New Zealand and just ahead of Denmark on the list. By comparison, Puerto Rico ranks 60.

    Trained Workforce

    Although Singapore’s workforce is small – just 5.7 million people – workers are educated and skilled. With an education system that focuses on high-achievement, Singapore is quick to adopt new technologies and strives for innovation.

    More than 67% of Singapore’s population is working, and more than half have completed higher education.

    Puerto Rico and Singapore both offer advantages for businesses. Singapore’s business-centered environment may be favorable for start-ups and expansion. But Puerto Rico offers tax benefits that are hard to beat, particularly for American businesses.

  • Mauritius vs Singapore As An Offshore Financial Centre

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    Mauritius offers a free market, attractive tax regime and is one of the most developed countries in Africa. The country is reportedly trying to become the “new Singapore,” and this being done through an easy business formation process.

    Low tax rates are also in effect, offering an attractive alternative as an offshore financial centre.

    Let’s see how Mauritius compares to Singapore.

    Mauritius as an Offshore Financial Centre

    Mauritius wants to be a trade and investment hub, and it’s looking to guide African investors to its shores. The plan will be to cater to the elite in Africa, with tax treaties and benefits that are too advantageous to overlook.

    Setting Up a Business in Mauritius

    Often ranked as the easiest country in the region to do business, there are numerous benefits of a financial centre in Mauritius:

    • English and French are widely spoken
    • The island is politically stable
    • User-friendly legislation exists

    Multiple business types exist:

    • Domestic Company
    • Authorized Company
    • Company holding a Category 1 Global Business Licence (GBC1)
    • Company holding a Category 2 Global Business Licence (GBC2)

    Companies may be limited by:

    • Shares
    • Guarantee
    • Shares and guarantee

    There are public and private companies as well as a limited life company and an unlimited company. A one-person company may also be formed, but within a six-month period, a secretary must be appointed in the event that the sole shareholder dies.

    Companies wanting to reduce global earning taxation will often opt to create a GBC2 company, but a GBC1 entity may be a good option in certain situations.

    When creating a GBC1, the fees and requirements are more stringent, but there are benefits.

    Mauritius allows double taxation avoidance treaties as well as options for financial services, which are tax-beneficial.

    Forming a GBC2

    GBC2 companies can be setup as an offshore entity with:

    • US$1 in capital
    • One director
    • One shareholder
    • Resident registered agent

    GBC2 are set to become abolished in 2019, but the entity does allow for legal exemption of the following in Mauritius:

    • Corporate tax
    • Capital gains tax
    • Withholding tax

    Forming a GBC1

    The GBC1 entity is a great option for holding activities, and this would include financial services. This entity type requires:

    • US$1 in capital
    • One shareholder
    • Two resident directors
    • Corporate bank account

    The GBC1 entity can trade with locals, while the GBC2 cannot. Taxation is very low for this entity, much lower than in most countries.

    Authorized Company

    An authorized company is not considered a resident company, so there are no corporate taxes assessed on net profits. The business can be created with just:

    • US$1 in capital
    • One director
    • One shareholder
    • Resident registered agent

    Limited Liability Company

    A limited liability company, LLC, is a great option for some, and this will require:

    • One shareholder
    • US$1 in capital
    • One resident director

    LLC companies are restricted in the tourism industry, and this entity is often optimal when businesses are going to operate a local business with staff that is local and trade is with residents. Otherwise, GBC1 will be the optimal choice.

    Yearly Corporate Compliance

    Yearly compliance requires a resident registered agent in the country, and requirements change depending on the type of business formed. A GBC2 entity does not require:

    • Annual financial statements
    • Corporate tax
    • Capital gains tax
    • Withholding tax

    But the GBC2 entity must provide a financial summary every year to the Mauritius Financial Services Commission.

    Authorized companies will need to file an income return with the Mauritius Revenue Authority and also maintain a resident registered agent.

    LLCs will have to file annual statements and will have to pay Mauritius corporate tax.


    Taxes will vary greatly by entity, and they are as follows:


    • Exemption from corporate, capital gains and withholding tax


    • 3% taxation on global earnings

    Authorized Company

    • Does not pay corporate tax on net profits


    • 15% flat tax rate

    Resident companies, as well as an LLC, will pay the traditional corporate tax rate of 15%.

    Ease of Doing Business

    Starting and doing business can take just hours after registering, and annual requirements are minimal. The island is very open to making it easy for companies to operate, and they have made legal reforms that allow small and medium-sized entities grow faster.

    Lack of capital gains tax and low tax rates, along with online filing options make doing business easy in Mauritius, especially when compared to mainland Africa.

    Trained Workforce

    Mauritius is a very welcoming country, and nearly a million tourists visit the country annually. Finance and business outsourcing are becoming a large source of GDP, and it’s a cultural melting pot.

    The multilingual workforce makes the country a great choice for a financial centre, with French and English widely spoken. Financial and legal personnel are in abundance. Men account for around 66% of the workforce, and female employment is on the rise.

    Unemployment was 7.3% in 2016, and youth and women have the highest unemployment rate.

    There is a shortage of middle management and technical employees, but a National Program was enacted to help fill the gap.

    Singapore as an Offshore Financial Centre

    Singapore is known for offering a business-friendly environment, and the government has worked to make the country one of the top offshore financial centres in the world.

    Setting Up a Business in Singapore

    Singapore makes it easy to start a business, and the process is straightforward. The country’s double taxation avoidance agreements and free trade agreements make business affordable in the country.

    All entities need to have:

    • Entity names approved before incorporation
    • One resident director
    • Registered Singapore address
    • S$1 in paid-up capital
    • Professional firm formation (required for non-residents)

    All non-residents must have a professional firm in Singapore form their business. This step, while it may add to the cost of incorporation, allows for a fast, law-abiding means of starting a business in Singapore.

    Owners that move to the country will need to obtain an Entrepreneur or Employment Pass

    Licenses may be required, depending on the business being conducted.

    Yearly Corporate Compliance

    Corporate compliance is also very easy, and this will include the following:

    • Chargeable income filing
    • Annual tax return filed with the IRA
    • Annual return filed with the ACRA
    • Annual general meeting
    • Financial statements
    • Financial statement audits
    • Qualified company secretary appointed within six months of incorporation

    Companies may also need to register for Goods and Services Tax (GST) if the turnover exceeds the one-million mark. Depending on the business activity, the business may be required to obtain and maintain certain licenses.


    Taxation is low in Singapore, and the first S$300,000 will have a tax rate of less than 9%. When profits exceed this amount, a flat rate of 17% is assessed. GST tax rates are 7%, and this would be what other countries pay as VAT or sales tax.

    The low tax rate is still higher than Mauritius in many cases, especially when net profit is over S$300,000.

    Ease of Doing Business

    Singapore has a very well-developed government, and the country's business environment is very robust. It's easy to do business in the country, and this is due to the country establishing three main agencies for business:

    • Legal Services Regulatory Authority
    • Monetary Authority of Singapore
    • Enterprise Singapore

    Yearly compliance requirements are minimal, and the flat tax rate is a key reason for many companies starting an offshore financial centre in Singapore. The robust business environment in the country is one of the key reasons that Singapore has grown into one of the top places of incorporation for an offshore financial centre.

    Trained Workforce

    Businesses that will keep a physical presence in Singapore and leverage the workforce will benefit from one of the best education systems in the world. Singapore is known for being on the top of the world’s education rankings, and this is due to strict education requirements for all youths.

    Math, reading and science remain the three subjects that the country excels in.

    A population of 5.79 million makes Singapore’s available workforce much higher than Mauritius, and this allows for a higher number of potential employees. The country has what many consider a vibrant workforce, and this is a workforce that is known to:

    • Innovate quickly
    • Change and add new technology
    • Focus on productivity

    Over 50% of the country’s population has a diploma or degree, and there is more than 67% of people in the workforce. This is advantageous to businesses that will be looking to hire locals to fill their ranks.

    Low tax rates and a well-educated population means that the country’s workforce can fill most positions with ease.

    Mauritius and Singapore both have their advantages. While the different types of business entities are beneficial in Mauritius, this also leads to confusion when not using a professional firm for incorporation.

    Singapore’s straightforward incorporation is very beneficial, but the incorporation process, while fast, is still not as quick as it is in Mauritius.

    Workforce-wise, Singapore has the advantage, but Mauritius has the lower overall tax structure even at the highest corporate tax rate of 15% versus Singapore’s 17% top tax rate. The optimal location to incorporate an offshore financial centre will depend on a variety of factors, including double taxation avoidance agreements with an owner’s resident country.

  • Singapore Employment Act - key changes in 2018

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    Singapore’s Parliament has introduced numerous key changes to the Employment Act on October 2, 2018. The country’s employee-centric workplace is leading the proposed changes, which all employers must adhere to in an attempt to avoid infringing on employment legislation.

    Patrick Tay, MP, has been championing an expansion of the Act since 2011. He claims that changes and amendments proposed will provide greater worker protections in Singapore.

    Others claim that the changes will help solve the problem of malpractice, which is common in small and medium enterprises.

    What’s important to note is that the changes, that will take effect on 1st April 2019, while significant and will work to make Singapore’s workforce stronger, will not have a high cost for businesses. These changes are aimed at encouraging employers to have “better” employment practices.

    The most significant changes that have been proposed are listed below:

    Removal of S$4,500 Salary Cap for PMEs

    Professionals, managers and executives, or PMEs, have had a salary cap of S$4,500 imposed against them. Under the Employment Act, any PME that exceeded these limitations did not benefit from the Act.

    This means that these individuals may not be entitled to the following benefits:

    • Medical fee reimbursement
    • Hospitalization leaves
    • Wrongful dismissal compensation
    • Minimum annual leave
    • Paid sick time off

    But under the proposed changes, all of the benefits above would extend to PMEs of all income ranges. The cap has been removed, and the change is expected to positively impact 430,000 PMEs in Singapore.

    The change ensures that all PMEs are safeguarded under the Employment Act.

    PMETs, which includes technicians, is also covered under the proposed amendments. This is a significant change because this group accounts for 56% of the local workforce and is expected to account for 65% of the workforce by 2030.

    It's important to note that the salary cap removal does not extend to all workers and does not include:

    • Seafarers
    • Domestic workers
    • Public servants

    These individuals are covered by other legislation that does not include the Employment Act.

    All Employees to Benefit from Statutory Leave Entitlement

    Statutory leave entitlements will also see a major change under the proposed amendments. The entitlements will now be extended to all employees, and this will be done through the removal of Part IV of the Act, under the general section.

    What does this mean to employees and employers?

    The removal of Part IV will eliminate the restrictive wording of the legislation that includes workers that earn up to the previous salary cap imposed on PMEs, or S$4,500. Non-workmen that earned up to S$2,500 in basic monthly salary were also included in the previous legislation.

    Removal of this section will extend statutory leave to all employees.

    In essence, this means that statutory entitlement will be 14 days maximum after years of service.

    But one key benefit from this is that employees will not be forfeiting leave.

    Leave, which may have been untaken during the calendar year, will not be lost. While the change may seem minimal, and it is, it will extend legislation to all employees regardless of their basic monthly income.

    Non-Workmen Salary Caps Will Be Increased

    Non-workmen have been negatively impacted from salary thresholds in Part IV benefits. The former legislation put a cap of S$2,500 on basic monthly salary, but this salary cap is now being increased to S$2,600.

    Previous legislation excluded statutory protections for hours of work, conditions of services and rest days for any non-workmen earning in excess of S$2,500 monthly. Overtime pay is currently only offered to non-workmen that earn up to S$2,500 in monthly salary.

    Workmen that earn above the cap may be taken advantage of, working long hours with no overtime pay. But under the new cap, many of these individuals will benefit from overtime pay protection.

    Singapore has strict requirements on payment for overtime work. Employers that fail to meet these requirements will suffer severe consequences, and there are also Central Provident Fund implications that will be assessed.

    Raising the cap will benefit an additional 100,000 workers, extending statutory protections to them.

    Changes to Medical Leave

    Medical leave changes are also being proposed, offering further protections for employees that may be suffering from medical conditions which result in the employee taking leave. The proposed amendments include:

    • Any medical practitioner can now certify paid sick leave for employees.
    • All hospitals and medical institutions are considered approved hospitals.
    • All hospitals and medical institutions will be accepted for paid hospitalization.

    When the legislation mentions “all hospitals and medical institutions,” this will include community and public hospitals.

    Under previous legislation, which is currently in effect, medical practitioners that were appointed by employers were the only ones that could certify paid sick leave for the individual. Hospitalization leave would only be qualified at national centers or if admitted into an acute hospital.

    Employers that appoint medical practitioners could, in theory, influence the practitioner's certification, resulting in employees working when they’re truly sick.

    The laws, as they stand today, would limit the ability for employees to seek out further diagnosis.

    Community and public hospital admittance will allow for paid hospitalization for many employees that may have not previously been admitted into a national center or acute hospital. The ability to choose any hospital or medical institution allows for faster care and treatment of employees.

    Direct admittance into a community hospital will now allow for entitlement of hospitalization leave.

    Employees warded at community hospitals will have leave extended to them only if an acute hospital referred the individual.

    The changes proposed will further protect employees that have worked for an employer for at least 3 months. Employers of employees that met the three month of employment will be liable to pay for medical examination fees through reimbursement.

    Employment Court Tribunal to Offer Dispute Resolutions

    Current iterations of the Employment Act are such that different disputes are head by different bodies. For example, if an employee feels as if they have been wrongfully dismissed, they will have their claim examined by the Ministry of Manpower.

    These claims would occur when an employee claims that they were dismissed without cause or excuse.

    But if a salary dispute occurs, the employee’s claim would then be adjudicated by the Tripartite Alliance for Dispute Management. Finally, if the dispute goes unresolved, the dispute will be heard by the Employment Court Tribunal.

    Under the key changes proposed, the Employment Court Tribunal will be able to hear cases that include wrongful dismissal.

    Salary-related disputes will still be referred to the Tribunal as in previous legislation. Employees and employers will benefit from the Tribunal being able to resolve employment disputes. There will no longer be two routes that the dispute will need to go through.

    Changes will also include the expansion of the employee dismissal definition to also include involuntary resignation.

    The current definition is such that dismissal is when an employer:

    • Terminates an employee’s contract
    • Termination is done with or without notice
    • Misconduct or other circumstances exist

    When an employer suggests that the employee resigns from their position, the employee, if they follow the advice and resign, is not protected under the current definition of employee dismissal.

    Now, if the employer suggests that the employee resigns, the employee may be able to claim wrongful dismissal. The employee will need to prove their side of the story, and it is required that the employee show that the resignation was not voluntary but as a result of the employer’s:

    • Conduct
    • Omission

    Companies will need to change and adapt their current way of conduct as a result of these changes. Strategies of proposing employee termination will need to be thoroughly reviewed.

    Salary disputes will also benefit from the proposed amendments. Employers will now need to have written consent from their employees if they want to make deductions from the employee’s salary.

    The consent will be for certain services that may result in the employee’s salary being reduced.

    Employees will also be able to withdraw their consent if the withdrawal request is made, in writing, before the deduction has been made. This allows employees to have further control and protections over any of their potential deductions from the employee’s salary.

    Retrenchment of employees has also had some changes that have been covered briefly by others. The changes require employers to provide information on the retrenchment of an employee if the Commissioner of Labour requires it.

    Current law is such that only employers that have 10+ employees notify the Ministry of Manpower when or if 5 or more of these employees have be retrenched in a six-month period.

    Employers that are meaning to stay within the confines of the law will need to review their policies and contracts with employees. The goal is to have a full understanding of all changes, and to provide any much-needed policies changes to stay within the confines of the proposed amendments.

    The Employment Act changes are a way to protect employees, shifting some of the power to the employees that help companies run and grow. The changes provide basic terms and working conditions that are meant to help all employees although some exemptions do exist.

  • Delaware, Wyoming or Singapore Compared as Offshore Financial Centres

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    Offshore financial centres offer key advantages for owners, including ease of doing business, tax benefits and even simple corporate compliance. Delaware, Wyoming and Singapore are three key areas of offshore incorporation.

    Setting Up a Company

    Setting up a company is the first step to creating an offshore financial centre. The process is often simple, and each local has its own benefits.


    Delaware is where many businesses in the United States choose to incorporate, and the reason for this isn’t just low incorporation or tax benefits. The state has one of the best business courts with a very strong corporate law structure, and this is advantageous to corporations.

    Forming a business in the state is easy, and there are numerous online services that will walk you through the process.

    When you incorporate, you’ll need to:

    • Choose a business entity type:
      • Limited Liability Company
      • Limited Partnership
      • General Partnership
      • Corporations
      • Statutory Trusts
    • Obtain a registered agent. The agent must have a physical presence in Delaware, and a business that is physically located in the state can act as their own registered agent if they wish.
    • Certificate of incorporation. Entity forms that must be filed with the state.

    Incorporation can cost as little as $90, but you’ll find that there are yearly corporate compliance measures that also must be taken. This will be listed in the next section.


    Wyoming has one of the lowest income tax rates and lowest corporate tax rates in the United States. A lot of businesses choose to incorporate in the state, and there are numerous advantages over incorporating in Delaware.

    The process of incorporation is very similar to Delaware, you’ll need to:

    • Choose a business type:
      • Limited Liability Company
      • Profit Corporation
      • Partnership
    • Obtain a registered agent. A registered agent is required in the state.
    • Certificate of incorporation. All entity forms must be filed with the state.

    Setting up a business in Wyoming can be done for as little as $125.

    Now, which state is better for incorporation? Each state has its own benefits. The key difference between the states is that Wyoming doesn’t have:

    • Corporate income tax
    • State personal income tax
    • Franchise tax

    One-person corporations are allowed, and annual and filing fees are low. Wyoming also allows businesses to adopt a corporation formed in another state.

    Whether choosing Delaware or Wyoming, the initial setup process is simple and easy.


    Singapore’s business legislation is friendly, offering anyone that wants to create a business in the country to have an easy, quick method of incorporation. Foreigners can freely incorporate in the country as long as they are over 18 years of age.

    Foreign companies can also incorporate in the country.

    Often considered the “Delaware of Asia,” Singapore does require a few additional steps to incorporate in the country. You'll need to have the name of the business approved before incorporation, and then the following requirements must be met:

    • One or more resident directors need to be added. Non-resident directors can also be added. Both need to be 18+ years of age, free of malpractice charges and must not be bankrupt.
    • Shareholders must be assigned, and this can be between 1 and 50.
    • A minimum of S$1 in paid-up capital must be present to incorporate.
    • A registered address must be provided that is a local, physical address within Singapore.

    Foreigners registering their business in Singapore must use the services of a professional firm to register the business. Anyone that plans to move to Singapore will be required to obtain their Entrepreneur Pass or Employment Pass.

    Registering is otherwise easy, requiring:

    • Name reservation
    • Registration of the company

    If the incorporation has been approved, you’ll receive an official email notification from the ACRA.

    One or more business licenses may need to be obtained to remain in local compliance.

    Yearly Corporate Compliance

    Corporate compliance is a must-understand, and this is where an accountant can make sure that your business remains in compliance at all times. The corporate compliance for each area is as follows:


    Delaware’s corporate compliance is straight-forward. The state requires that you maintain a registered agent, so you must maintain a registered agent’s service throughout the lifetime of your business.

    You'll need to also maintain any licenses or certifications based on your business type.

    But the state doesn’t require that you file an annual report. You will be required to pay an annual tax of $300 before June 1 of each year.

    The only two statutory requirements are:

    • Pay franchise taxes
    • Maintain a registered agent

    You'll also need to:

    • Hold meetings
    • Keep meeting minutes
    • Create resolutions to authorize corporate actions

    These requirements may not be present when choosing another entity type aside from a corporation.


    Wyoming’s corporate compliance is also simple and easy. A registered agent must be kept throughout the lifetime of the corporation’s existence.

    Licenses and certifications will need to be obtained on a local level, so this will vary depending on the business’ location.

    Corporations will be required to:

    • Keep permanent records of minutes for meetings of the board of directors and shareholders.
    • Record all actions taken outside of a meeting.
    • Record all actions by a committee in place of the board of directors.

    Wyoming requires an annual report to be filed on behalf of the business. Major business taxes don’t exist in the state, but there is an annual license tax which many consider a franchise tax.

    Wyoming may be one of the country’s most tax-friendly states thanks to its lack of personal and corporate income tax. The “license tax” is minimal:

    • $50, or
    • $0.0002 per dollar of assets

    The method chosen is dependent on which value is higher.


    Singapore’s friendly business practices do require that a company secretary be assigned within six months of incorporation. A registered address must also be maintained. Licenses must be maintained from year-to-year.

    Singapore’s annual filings include:

    • Annual financial statements
    • Filing of chargeable income
    • Financial statement audit (depending on annual income and assets or employee count)
    • Annual general meeting
    • Annual tax return filed with the IRAs
    • Annual return with the ACRA

    Singapore’s professional firms will be able to help keep a corporation in compliance annually.

    Tax Benefits of Delaware, Wyoming and Singapore

    Every jurisdiction has their own tax benefits:

    • Delaware. Delaware doesn’t require corporate tax unless the income is derived from Delaware. In this case, the tax rate is 8.7%. Businesses can incorporate their businesses in the state, but if business is not transacted in the state, the only tax paid is the franchise tax.
    • Wyoming. Wyoming does not have corporate income tax. Sales tax will need to be collected in the state, but it remains at just 4%.
    • Singapore. Singapore does have a friendly tax structure, and exemptions and incentives also exist. Companies pay less than 9% taxes on the first S$300,000 in annual profits. A flat rate of 17% is assessed for profits over this amount.

    Double taxation agreements exist between Singapore and the United States, and these laws apply to corporations. This will help corporations save money, and a key requirement is that 50% of the corporation’s stock be held by citizens of the respective country.

    That is, a company with 50% or more stockholders being citizens of the United States would pay income tax in the United States.

    Availability of Trained Workforce

    If a business is planning to incorporate and run their operations in either state or Singapore, there is ample availability of a trained workforce.


    Delaware’s population, as of July 1, 2017 stood at 961,939 residents. The state has a very high dropout rate for high schoolers at 11.2%. And between 2012 and 2016, the number of people age 25 or older that had a Bachelor’s degree or higher was just 30.5%.


    Wyoming may be a large state in terms of land area, but the state has the lowest population in the United States. The small population leads to less availability of a trained workforce, and only 26% of the population has a Bachelor’s degree or higher.

    High-school dropout rates are 8% in the state.


    Singapore has a robust education system which ranked the highest in math, reading and science in 2016, according to Pisa rankings. The country has the top global education ranking, and the education system is geared towards high achievement.

    Singapore’s population dwarfs Delaware and Wyoming, with 5.79 million people in 2018.

    Singapore, in terms of numbers and education, is often the better choice for businesses that want to hire a trained workforce. That is not to say that Wyoming and Delaware do not have a great workforce, but in terms of education, both states lag behind Singapore. The smaller size of these states also results in fewer people in the workforce.

    Choosing the right jurisdiction to incorporate a business is essential to your company’s success. All three of these locations are considered tax havens, and while each has its own benefits, it’s often best to discuss your business’ needs with a professional. Singapore, which has great double taxation policies with the United States, also has a robust, well-educated workforce.

  • Business jurisdiction comparison-Singapore and Bulgaria

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    Bulgaria and Singapore are two of the most well-known and popular offshore financial centres in the world. Both offer tax advantages, ease of business registration, a skilled labour force and straightforward corporate compliance regulations.

    Bulgaria as an Offshore Financial Centre

    Bulgaria is an attractive offshore financial centre due to its location advantages, tax-friendliness and high availability of an affordable trained workforce. Foreign entities can also do business in Bulgaria relatively easily, although there are liability concerns when doing so.

    Setting Up a Business in Bulgaria

    Bulgaria offers many advantages to prospective business owners, such as a simplified registration process and low capital requirement. The required minimum capital for launching a private limited liability company – the most common entity type in Bulgaria – is just €1. The registration process generally takes no more than three weeks.

    First,partners will be required to meet before a public notary to adopt the company’s constitution, define the company's status and establish the entity’s hierarchy.The founder must sign a notarized agreement, and a certified copy of the company’s declaration of incorporation will be issued. A fee will apply, but these formalities should be completed in a single day.

    Next, the company’s founder or an authorized person must open up a company bank account in a commercial bank. Any paid capital will be blocked until the Commercial Register approves the business formation. When opening the bank account, a receipt will be given that must be presented to the Commercial Register. A fee will be required to open a business bank account, which will vary according to the chosen bank.

    After opening a bank account, an A4 registration form must be filled out and submitted to register the business with the Commercial Register. Each director must produce two sworn and notarized affidavits, as per Articles 141 and 142 of the Trade Act and Article 13 of the Commercial Registration Act. Other documents must also be presented, including:

    • Appointment of cadres decree
    • Incorporation certificate
    • Bank receipt issued when opening a bank account
    • Notarized associates’ signatures specimens

    Several types of entities are available when launching a business in Bulgaria, including:

    Limited Liability Company (OOD)

    • A single shareholder
    • A single director

    In Bulgaria, a limited liability company, or OOD, can be incorporated with:

    If the company has a single shareholder, the abbreviation for the entity becomes EOOD to denote that it is a single-member company.

    The shareholder and director can be of any nationality and not necessarily a resident in Bulgaria.

    Joint Stock Company (AD/EAD)

    To form a joint stock company (JSC), there must be:

    • A single shareholder (known as EAD), or
    • Two or more shareholders (known as AD)

    A larger capital investment is required with this business entity: a minimum of €25,000,or 25% of that amount paid at the time of incorporation.

    Additionally, a joint stock company must have:

    • An appointed certified accountant
    • Appointed at least three Board of Directors members

    A JSC may be advantageous for owners who plan to raise capital in Europe, as Bulgarian law does not restrict the transfer or issuance of shares with this entity type. JSCs also have the advantage of having the ability to be listed on either the Sofia Stock Exchange or another stock exchange in the European Union, including the London Stock Exchange and Euro Next.

    Limited Partnership

    The Bulgaria limited partnership requires:

    • At least two partners with different powers and liability over the entity’s debt

    A minimum of one general partner must be fully liable, while the remaining limited partners will only be liable to the extent of their contribution (which is unpaid) to the partnership.

    Limited partnerships are generally formed by those who want to provide professional services, such as lawyers and accountants. This entity type may also be a practical option for those who already have a partner in Bulgaria.

    Free Zone Company

    Non-residents can form and register a wholly-owned foreign company in one of Bulgaria’s free economic and industrial zones. Free economic zones are intended to house export-oriented businesses, while the industrial zones are intended for companies that will provide infrastructure and facilities for manufacturing operations.

    The minimum requirements for forming a free zone company will vary from one zone to another. Generally, the company must provide a minimum number of new jobs and meet certain capital requirements.

    Free zone companies are best suited for manufacturing- or export-oriented businesses.

    Sole Proprietorship

    Residents and foreigners can both register as a sole proprietor in Bulgaria. Sole proprietors must register in the Bulgarian Trade Register. There are no capital requirements for this entity type, but limited liability is not conferred to the sole proprietor. In other words, the owner of the business is wholly liable.

    Forming a sole proprietorship may be a practical option for self-employed foreigners living in Bulgaria and local residents.

    Yearly Corporate Compliance

    • Annual financial statements must be filed with the Bulgarian Trade Register before March 31st each year. This applies to all companies.
    • Joint-Stock Company: Annual financial statements and balance sheet must be audited by a certified accountant, which must be filed with the Bulgarian Trade Register before March 31st each year.
    • All companies are required to maintain records of the financial statements and accounts.
    • All enterprises must maintain a registered office address in the country.


    • Bulgaria has one of the lowest corporate tax rates in all of Europe: 10%. Sole-proprietorships and limited partnerships have a standard tax rate of 0%.
    • Tax returns must be paid and filed by March 31st each year. A 12% monthly interest fee will apply to any outstanding taxes.
    • ValueAdded Tax (VAT) registration will be required for businesses with a turnover of over €25,000. The VAT rate in Bulgaria is 20%. Corporate VAT returns must be filed by the 14th of every month.
    • Dividends distributed between domestic and EU/EEA entities are not subjected to corporate withholding tax.
    • Global business income is taxed.
    • Capital gains from sales of shares through the Bulgarian Stock Exchange or EU/EAA stock exchanges are exempt from taxes.
    • Royalties and interest paid to non-EU/EAA entities are subject to a 10% withholding tax,unless a double tax treaty is applicable.
    • Bulgaria has double taxation agreements with 68 countries, including Japan, UAE, Canada,Malaysia, Singapore, and many others.

    Ease of Doing Business

    Foreign companies may open a branch office entity in Bulgaria to do business in the country. These branches are not considered separate legal entities. Therefore,the parent company will be subject to unlimited liability for losses incurred at said branch.

    Branches must have a resident legal representative and must file financial statements with the Bulgarian Trade Register before March 31st each year.

    Trained Workforce

    Bulgaria boasts a skilled and educated workforce while maintaining one of the lowest labour costs in Europe. The country’s labour code is also favorable for businesses. The country boasts a workforce of 3.4 million people, and most have a higher education.

    Singapore as an Offshore Financial Centre

    Singapore remains as one of the largest offshore financial centres in the world. The country enjoys this distinction due to its business-friendly environment. The government has made it easy to form a business in the country and adhere to compliance requirements.

    Setting Up a Business in Singapore

    Registering a business in Singapore is a fairly simple and straightforward process – and it can all be completed online at Bizfile by the Accounting and Corporate Regulatory Authority.

    The first step to setting up a business in Singapore is to apply for an EntrePass through the Ministry of Manpower (MOM). A detailed business plan must be created as well as financial projections. A $3,000 security deposit will be required. If approved, an Approval-in-Principle letter will be sent within 2-6 weeks.

    All businesses in Singapore must be registered with the Accounting and Corporate Regulatory Authority (ACRA) and have a minimum $1 in paid-up capital for private limited companies.

    Nominal fees apply for the business name application and to incorporate the company. Registrations are generally approved within 15 minutes if applying online.

    • Company names must be approved by the ACRA
    • There must be at least one shareholder
    • At least one director must be a resident of Singapore
    • The company must have a Company Secretary, and that person must be a Singapore resident
    • The company must maintain a physical office address in Singapore
    • The company's office address and hours (must be a minimum of three hours per weekday) must be registered.
    • The business registration number issued by ACRA must be included in all documents used for official business communications.

    Yearly Corporate Compliance

    Companies registered in Singapore must adhere to several requirements in order to remain complaint:

    • An auditor must be appointed within 3 months of incorporation, unless exempted from audit requirements.
    • The First Company Secretary must be appointed within six months of the date of incorporation.
    • Transfer share agreement must be stamped within 14 days of signing the document.
    • The company must establish a Financial Year End (FYE).
    • Companies must register for Goods and Services Tax (GST) if turnover exceeds $1 million.
    • Companies must file an Annual Return (filed with the ACRA) and an Annual Tax Return (filed with the IRAS) each year.
    • Certain business activities will require special licenses.


    Companies with a turnover of S$1 million or more must register to pay GST, which is 7%.GST is similar to VAT and sales tax in other countries.

    Taxes in Singapore are pretty straightforward:

    • The first S$300,000 in annual profits: Less than 9%
    • Annual profits after $300,000: 17%

    Singapore’slow tax rates have helped make the country an attractive place to launch business.

    Ease of Doing Business

    Foreign entities can establish a representative office in Singapore through one of three government agencies:

    • Legal:Legal Services Regulatory Authority
    • Banking,insurance and finance: Monetary Authority of Singapore
    • All other industries: Enterprise Singapore

    Trained Workforce

    Although Singapore has a relatively small workforce of just 5.7 million people, workers are educated and trained.

    The work culture in Singapore prioritizes productivity, innovation and technology adoption. Singapore has 67% labour force participation, and more than half of workers hold a diploma or degree of some sort.

    Both Bulgaria and Singapore are attractive options when establishing a business or expanding operations offshore. The optimal destination for a business will depend on the industry and the company's goals.

  • Agreement Between Singapore and Malaysia to Avoid Double Taxation

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    Singapore and Malaysia came to an agreement in 1968 to avoid double taxation. Another agreement was signed in 1973, which was placed into the text of the original treatment. The cooperation between the two countries aims to prevent two main things:

    • Double taxation
    • Fiscal evasion of taxes on income

    The agreement between the Government of Malaysia and the Government of the Republic of Singapore applies to, in accordance to Article 1:

    • Persons who reside in one of the Contracting states
    • Persons who reside in both of the Contracting states

    Residents of one or both of the states, in this case Singapore and Malaysia, have the taxes covered in the agreement outlined as follows:

    • Income derived by a contracting state
    • Malaysian income tax
    • Malaysian petroleum income tax
    • Singapore income tax

    Any income derived from the activities above will be subject to the rules of the agreement which helps residents avoid financial losses caused by double taxation.

    What's important to note is that, under Article 2 of the agreement, taxes on income that are similar or identical will also count under the agreement. There's room for interpretation of income taxes under this section of the agreement.

    Agreement Definitions to Consider for Double Taxation

    A complete set of definitions are laid out, but the most important points are:

    • “Malaysia,” means all of the territory of the Federation of Malaysia. Malaysia may also mean any area in which Malaysia has sovereign rights.
    • “Singapore,” means the territory of the Republic of Singapore.

    The definitions of the “contracting state” refers to Malaysia or Singapore in this context. A “person” can be any person, or company, that is treated as a person for tax purposes.

    Any “person” under the agreement, who is a resident of either contracting state, is an individual whom resides in one of the two contracting states for tax purposes. “Person” may also fall under the respective contracting state’s tax laws imposed by a statutory body, local authority or political subdivision.

    When a person is a resident of both contracting states, the status of the person must be determined as is explained in Article 4. This determination follows these main points:

    • The State in which the person has a permanent home. In the event that the individual has a permanent home in both states, the state in which the person’s personal and economic relations are closer will be determined to be the individual’s state for taxation purposes.
    • When a permanent home is unavailable and the individual's interests cannot be determined, residency of a state will be determined by habitual abode. Habitual abode is the state in which the person spends most of their time.
    • A habitual abode in both states will require the residency to be based on the state in which the person is a national.
    • In the event that the person is a resident of both states or neither state, the question of residency will fall under the guidance of the contracting states.

    If all of the above points are considered, the person’s state will then be the place where management is located.

    Income Governed Under the Agreement for Taxation Purposes

    Once the definitions are considered, it’s time to understand what is considered income under the agreement. Income is categorized into multiple categories to allow for proper legal definitions to be met.

    We'll be attempting to succinctly define what income will be considered income.

    Immovable Property Income

    Income that is gained in one of the states from immovable property may be taxed. The definition of “immovable property” falls under the contracting state, and this income may include income from:

    • Agriculture activities
    • Forestry activities
    • Direct use of the property
    • Letting of the property

    Income from an immovable property from an enterprise or independent services provider will also fall under immovable property income.

    Business Profit Income

    Business profits that are derived in the state through a permanent residence will be taxed under the corresponding state’s laws. When a permanent establishment exists in both states, the profits of each will be taxed by each state as if the business was distinct and separate from the establishment.

    For example:

    • Business A is established in Malaysia
    • Business B is established in Singapore

    Profits from each business, as if it were a separate entity, will be treated as if the business, even if it were under one company, was separate. Therefore, each location, Business A and B, would pay taxes in the state where the income was derived.

    Double taxation does not exist in this case.

    Deductions of expenses are allowed for general and executive expenses, which are available as if the enterprise were independent in the respective state.

    States will determine the proper taxation of profits if competent authorities cannot determine profit attribution properly. Authorities will then take it upon themselves, in application of any law that exists, to make an estimation of the profits from each state.

    Taxation of the business will be determined using the same methods as outlined in the agreement year-by-year unless there is reason to determine taxation otherwise.

    Transport Income

    Transport income is also taxed, and this can be income derived from:

    • Air transport
    • Road transport
    • Boat transport

    Profits from ships or aircraft, operating internationally, are only taxable in the enterprise’s contracting state. The definition of profits, in this instance, may include income that’s derived from:

    • Rental container use
    • Rental of aircraft
    • Rental of boats

    When profits are derived through a joint business or pool, the state in which the enterprises residency exists will tax the enterprise accordingly. Ground vehicle profits, when earned through international traffic, will be taxable only in the contracting state.

    Dividend Income

    Dividend income may be taxable if paid by one company to the resident of the other contracting state. Taxes on dividends may also be imposed when the contracting state is different from the owner of the dividend’s respecting state. The tax, in this case, will be:

    • 10% of ground dividend amounts
    • 5% of gross dividends if the owner holds less than a 25% stake in the enterprise

    Taxation of profits will not be affected due to dividend income. If neither state imposes taxes on dividends, then dividends will be exempt under the first-mentioned state. When one or both states impose taxes, they will fall under the above amounts.

    Interest Income

    Taxation on interest will be required if the interest occurs in a contracting state and is paid to a resident of another contracting state. If the owner of the interest is a resident of the other state, taxation cannot exceed 10% of the gross interest paid.

    Interest paid on an approved loan may be exempt from Malaysian tax.

    The government of a contracting state will be exempt from taxation in the event that the interest is from the Government of the other state.

    Royalty Income

    Royalties may be taxed up to 8% of the gross amount when the owner of the royalties is a resident of the other state. Taxes for royalties in the state that they are derived will also need to be paid.

    Royalties in another state, which are earned through a permanent establishment in the state, will be considered as derived from the contracting state.

    Technical Fees

    Technical fee taxes cannot exceed 5% of gross technical fees. Fees, derived by a resident of one contracting state, earned in the opposing state, cannot exceed 5%. Technical fees are fees that are provided in consideration for consultancy, technical duties or managerial work.

    When the fees arise from the permanent establishment, wherein the fees are derived from the connection to the establishment, taxation may revert to taxation on independent personal services or business services.

    Independent Personal Services Income

    Independent personal service income, from a person that conducts a professional service, will be taxed in the state where a fixed base exists. In the event that a base has been established in both states, tax is imposed in each respective state on income attributable to the state.

    Professional services can include many professions, including accountants, dentists, doctors and other professional workers.

    Dependent Personal Services Income

    Income that’s derived from wages or salary shall be taxed only in the contracting state unless the remuneration is from the other state. Exceptions to the rule do exist, and these include:

    • Work paid for by an employer that is not a resident of the other state.
    • Renumeration is not earned by a permanent establishment or resident of an employer that is in the other state.

    Income from residency in another contracting state may be taxed by the other state.

    Directors’ Fees

    Fees paid to a director of a company that resides in one contracting state yet is a resident of the opposing state due to the conditions of being a member of the company’s board of directors. In this case, the other contracting state may tax the director fees.

    Taxation, as per Malaysian and Singapore laws, is setup to avoid double taxation. The agreement makes an effort to remove the risk of double taxation.

    Double taxation laws and agreement between Malaysia and Singapore are best considered by a certified accountant.

  • Agreement Between Singapore and India for Avoidance of Double Taxation

    Comments Off on Agreement Between Singapore and India for Avoidance of Double Taxation

    The Government of Singapore and the Republic of India, the Contracting States, signed an agreement on 20 April 1981, and the purpose was to avoid double taxation and also avoid fiscal evasion. Amendments have been made to the original agreement, with the full scope able to be found here.

    The original agreement, also known as Annex D, is as follows:

    Understanding the Scope of the Agreement -Contracting States

    Contracting States, in this case Singapore and India, have come to an agreement which applies to any persons that are residents of one or both States. That is, the person must be a resident of Singapore and/or India to fall within the scope of the agreement

    The agreement clearly defines which taxes will be covered in each State.

    India’s Taxes Which Apply to the Agreement

    India’s taxes, which are defined in Article 2, titled “Taxes Covered,” will include:

    • Income-tax and any surcharge on income-tax under Income-tax Act, 1961
    • Surtax imposed under the Companies (Profits) Surtax Act, 1964

    When looking over the agreement, “Indian tax” refers to the definitions above. Taxes that fall outside of this scope will not be subject to the agreement in its original state.

    Singapore's Taxes Which Apply to the Agreement

    Singapore’s definition of what is covered is far more general, called, in this case “the income tax.” When overviewing the rest of this document, “Singapore tax” will be considered “the income tax.”

    The agreement will apply to similar or identical taxes for both States.

    Contracting States will also be required, as per the agreement, to notify the other State when taxation laws are significantly changed. Relevant enactment copies must also be given to the Contracting State so that all competent authorities can understand the new laws.

    Understanding Fiscal Domicile

    Fiscal domicile is a resident of a Contracting State. Residency is formed in accordance with each State’s tax laws. For the purpose of avoiding double taxation, the definition of a resident must provide a clear residence if the individual is a resident of both India and Singapore.

    The agreement outlines how to determine residency in this case, and a person may be considered a resident if:

    • A permanent home is available to him. When a permanent home exists in both States, authorities will determine which state the person’s economic and personal relations are closer.
    • In the event that relations cannot be determined, or if a permanent residence does not exist, then a person is considered a resident in the state in which they have a habitual abode. What this means is the majority of time a person spends in a State. For example, if a person spent 7 months in Singapore and 5 months in India, habitual abode would declare that the person is a resident of Singapore for the purpose of the agreement.
    • If no habitual abode exists or it exists in both States, the authorities of both States will work to determine the question of residency together.

    Understanding Taxation of Income

    The taxation of income is a major section of the agreement, and it encompasses all of the income which may be subject to the agreement.

    Immovable property may produce an income, and this income may be taxed in the Contracting State where the property exists. Contracting States definite “immovable property” under their own law, and this may include “accessory property” which applies to the immovable property.

    Accessory may include:

    • Equipment used for the purpose of land management
    • Livestock used to produce income

    Natural resources and mineral deposits may also be included. Income can come from direct working of the land, or it may come from letting the land or other uses of immovable property which results in income.

    Property in which an enterprise exists or professional services are performed will be governed by income from immovable property.

    The law does not regard aircrafts or ships as immovable property.

    Business Profits

    Business profits may be subject to double taxation, but there are limits in place. The agreement is such that income or profits of a business of a Contracting State are only taxable if the income is derived in the Contracting State.

    When income is derived in the opposing Contracting State through a permanent establishment, the income may be taxed in the other Contracting State for income or profits that are attributable to the permanent establishment.

    That is, if the permanent establishment made up 30% of the enterprise's income, then taxation can only be applied to this amount in the opposing Contracting State.

    Laws allow for the deduction of expenses, when determining income or profits, to keep the permanent establishment. These expenses may include:

    • General administrative expenses
    • Executive expenses

    A section of the agreement, under Article 7, paragraph 2, exists which claims that when an enterprise of a Contracting State conducts business in the opposing State through a permanent establishment, taxation is such that the income and profits will be determined as if the enterprise were an independent enterprise.

    That is, the income and profits, may be treated as if they were made by an independent enterprise, under the same conditions, attributable to each Contracting State. Estimates, based on a reasonable basis, may also be made in the event that attributing profits and income accurately for each State is not possible.

    “Income or profits” does not income from:

    • Dividends
    • Interest
    • Rents
    • Technical service fees
    • Royalties
    • Capital gains fees
    • Remuneration

    The conduct of trade or business is what would constitute “income or profits.”

    Air Transport and Shipping Profits

    Air transport and shipping income or profits have their own classification under the agreement. Aircraft may fly into international zones, and in this case, operations may have income from both States.

    When the aircraft operates in places only within the Contracting State, taxes will not be exempt. But, if this is not the case, income from operating the aircraft in international traffic shall be exempt from taxes in other Contracting States.

    Profits from joint businesses, international operating agencies and pools will also fall under this definition.

    Income derived from the other Contracting State may include income from a variety of sources, including:

    • Goods loaded into the aircraft
    • Passenger carry
    • Livestock
    • Mail

    Shipping also has its own definition, and unlike air transport, taxation will occur on the other Contracting State. Income from a business that is operating in the other Contracting State may be taxed by the other Contracting State.

    The taxation can only occur after 50% of the tax is reduced on the tax chargeable income.

    Income may also be derived from:

    • Goods
    • Mail
    • Livestock
    • Passenger carry

    Dividend and Interest Profits

    Dividend and interest income or profit are also taxed differently. When dividends or interest is paid by a company, consider a resident of a Contracting state, to a resident of another Contracting State, taxation may occur in the original Contracting state.

    If a resident company derives income or profits from the other State, taxes may not be imposed by the other State on dividends paid by the company to non-residents of the other State. This rule applies even if part or all of the profit arises in the other State.

    Interest is considered to arise in a Contracting State when the payer is:

    • The Contracting State
    • A local authority
    • A statutory authority
    • Resident of the Contracting States
    • A political subdivision

    But if the person paying the interest has a permanent establishment in a Contracting State which is connected to the debt in which the interest payment occurs, and the interest is derived from the permanent establishment, interest will have arisen in the Contracting States in which the permanent establishment exists.

    When interest is given due to a special relationship, wherein the recipient and payer have some form of relationships, special cases will apply. That is, if the agreement is such that the interest paid exceeds the amount of interest paid if such a relationship didn’t exist, the excess of such payments will be taxable in accordance to the laws of the Contracting States.


    Royalty income is also complex, and like with dividend and interest income, royalties paid to a resident of another Contracting State, taxation may occur in the original Contracting state. Royalties are said to originate in the Contracting State when the payer is:

    • The Contracting State
    • A local authority
    • A statutory authority
    • Resident of the Contracting States
    • A political subdivision

    If a permanent establishment exists and the payer’s liability to pay the royalties occurred in the State in which the establishment exists, royalties will be considered as derived from the Contracting State where the permanent establishment exists.

    Special relationships for royalties follow the same guidelines as with interest.

    Dependent Personal Services Income

    Salaries, wages and renumeration are considered derived in the Contracting State where the employment occurs. Employment exercised in the other Contracting State may be taxed in the other Contracting state.

    Singapore’s laws are such that income earned in India will not be taxed in India if the following is met:

    • The resident of Singapore was not in India for a period exceeding 183 days in the past year
    • Wages or salaries are paid by an employer that is a resident of Singapore
    • Remuneration is not derived from an employer’s permanent establishment in India

    India has the same rules as Singapore in this respect.

    Directors’ Fees

    Directors’ fees of a resident of a Contracting State, which have arisen from the directors’ role as a member of a board of directors in a company that is a resident of the other Contracting State, may have to pay taxes in the other Contracting State.

    Apprentices, Students and Trainees

    Students who are a resident of a Contracting State but are in the other Contracting state to expand their education, are exempt from paying taxes in the other Contracting State so long as they do not reside in the contracting State for a period exceeding six years. Exemptions are for:

    • Remittance relating to the person’s training, education and maintenance
    • Remuneration per annum is 7,500 Indian rupees or less, or equivalent in Singapore currency and the remuneration was for personal services to supplement the resources available to the person

    An individual that is in the other Contracting State for the purpose of the following may be exempt from taxes on the items listed below if they do not exceed three years of residency in the other State since their arrival. Individuals covered by these rules may be in the other State for:

    • Training (grant)
    • Research (grant)
    • Student (grant)

    Award from the government or from one of the following may also be included:

    • Religious organizations
    • Charitable organizations
    • Scientific organizations
    • Education organizations

    Exemptions for the following exist:

    • Grants
    • Allowances
    • Rewards
    • Remittance for the purpose of education or training
    • Remuneration of up to 7,500 Indian rupees or equivalent in Singapore in connection to the individual's study, training or research

    Individuals that are considered an employee or are under contract with the other State for the sole purposes of gaining experience from a person that is not an enterprise for a period no longer than 12 months may also be exempt from:

    • Remittance
    • Remuneration of 12,500 Indian rupees or equivalent

    Income that is not mentioned within the Agreement will be taxed based on the laws of the respective Contracting States.

    Provisions to agreements are allowed, under the avoidance of double taxation. When income is subject to tax in each of the Contracting States, relief from double taxation may be given under:

    • Credits against tax payable
    • Deduction allowances

    The provisions follow the Income-tax Act, 1961 as pertains to credits.

    Discrimination cannot occur, meaning the other Contracting State may not impose higher taxes on nationals or citizens of a Contracting State. Reliefs, allowances or reductions, for the sole purpose of tax purposes, which are granted only to citizens are not required to be given to non-residents.

    There is a mutual agreement procedure in place that allows for remedies if a resident of one of the Contracting States believes that the actions of either state are in contradiction of the Agreement. Cases must be presented within a three-year period.

    Competent authorities of each of the Contracting States are allowed to exchange information if it helps to carry out the provisions in the Agreement. Information is to be treated as “secret.”

  • Registrable Controllers and Its Significance

    Comments Off on Registrable Controllers and Its Significance

    The Companies Act of Singapore was amended in 2017 under the Companies Act 2017. When the Act was passed, it was passed in an effort to improve the transparency of a business’ ownership and control.

    The Act was put in place to conform to international norms, and it also:

    • Enhances debt restructuring
    • Improves business operation ease
    • Reduces regulatory burdens

    Singapore’s lawmakers passed the Act to help make business operations more transparent, lowering the risk of misuse of corporate entities. The Financial Action Task Force recommended the changes that will help with:

    • Threats to business integrity
    • Money laundering
    • Terrorist financing

    Authorities will also have an easier time meeting international standards for tax transparency as a result.

    Maintenance of a Register of Controllers

    Implemented on 31 March 2017, the Act requires all companies, including foreign companies unless a special exemption is made, to maintain what is known as a “register of registrable controllers.”

    The register will include “beneficial ownership information,” and upon request, the information is to be furnished to public agencies.

    Controllers are defined as a person or legal entity that has “significant” control or interest in a company. Under the law, this is a person that has 25%+ of shares in the business or more than 25% voting power. Control would include an individual that has the power to:

    • Influence control over the company
    • Remove or appoint directors
    • Holds more than 25% of voting rights

    Implementation of the register is required as of 31 March 2017. A register of registrable controllers must be maintained within 30 days of the business’ incorporation.

    In an effort to reduce fraud, companies are required to take what is referred to as “reasonable steps” to obtain information about controllers and identify controllers in the business. Notice will also be provided to any potential controllers through hard or electronic copy.

    Individuals may reply to the notice, but it’s not the company’s liability if these parties do not respond.

    A reply to a notice will need to be entered into the register of registrable controllers within two days of receiving the notice. The register is to be kept in:

    • Registered filing agent’s office, or
    • Registered company’s office, or
    • Prescribed place

    Companies can ask for assistance in identifying controllers, through a notice, from:

    • Directors
    • Shareholders
    • Other persons of importance

    If a request is received, companies must furnish the registers to public agencies, including the Accounting and Corporate Regulatory Authority of Singapore. If a company does not maintain a register of registrable controllers in accordance with the amendment, a fine of S$5,000 may be assessed to the company.

    Foreign Companies and Public Registers

    Foreign companies that have registered in Singapore will be required to maintain public registers of all of their members. These companies will also be required to notify the Accounting and Corporate Regulatory Authority of Singapore of the address where the register is being kept.

    The register is an attempt to bring foreign companies into the same requirements of local companies in respect to a public register.

    All foreign companies are required to keep such a registrar.

    Singapore Companies and Register of Nominee Directors

    Companies incorporated in Singapore will also be required to maintain what is known as a “register of nominee directors.” These individuals, or directors, are persons that will act in accordance to the direction of any other person within the company.

    This is done so that a nominee director, who may be appointed to the board of directors of the company, by a person with a shareholding in the company, is identified.

    Nominee directors must disclose this information to their companies in an effort to reduce fraud and improper influence in a company. The goal is to:

    • Reduce terrorist financing
    • Reduce money laundering

    Nominees, often acting on the directions of their appointee, hold too much power in a company to not be identified. The register will help reduce the influence of the person that appointed the register and make it transparent who the nominee is through the register.

    Even if companies have wound up, they are still required to retain their records for a period of five years, an increase from just two years before the Act passed.

    Struck off companies are not required to keep their records at this time.

    What all of this does is ensure that Singapore’s businesses to fall in line with international standards. The United Kingdom and Australia, for example, have similar requirements in an effort to reduce risks inside of a company.

    The register of registrable controllers also helps authorities and shareholders know which parties may be influencing a company's decision. The use of shell companies to engage in fraud or complex contract division will also be easier to identify when the register of registrable controllers is available.

    Companies will no longer need to use common seals, and measures have also been taken to provide a timeline for annual general meetings and filing annual returns.

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