September 27, 2010 - Singapore Business registration firm AsiaBiz Services said that private limited company is the most popular business structure in Singapore as it provides countless of advantages such as tax benefits and exemptions, and limited liability protection that shields the personal assets of shareholders and directors from losses and debts of their companies.
This business model, which is more commonly referred as corporation in some European countries and US, usually has suffixes such as “Pte Ltd” and “Ltd” as part of its name. In Singapore, a private limited company may have a minimum of one to a maximum of 50 shareholders who may be local residents or foreigners.
Because of the advantages provided by a private limited company, even foreign businessmen and companies operating in Singapore prefer this arrangement. However, AsiaBiz said that since foreign entities and individuals are prohibited to self-register their own company, it is a legal requirement to hire the service of a professional registration firm.
Being a separate legal entity, a private limited company is treated like a real person which means that it can own a property and be sued using its name.
Probably the most remarkable feature of this business model is its perpetual and continuous existence even if there is a change in management and shareholders. This is because ownership can be passed down from one individual to another through the selling of shares.
In Singapore, the government provides local tax exemptions to newly incorporated companies in an effort to encourage local and foreign companies and individuals from setting up a business.
Meanwhile, the local tax exemptions are even available to 100 percent foreign-owned companies as long as their management is exercised in the country and at least one of their individual shareholders holds a minimum of 10 percent shareholding.
And according to AsiaBiz, even if a newly incorporated company did not meet these two requirements, it may still be eligible for a partial tax exemption.
“For newly incorporated companies, they can enjoy 100 percent tax break on their first S$100,000 chargeable income. In addition with this, they are also eligible for another 50 percent tax exemption on the succeeding S$200,000 within three years of their incorporation.
Because the Singapore law does not allow foreign companies and individuals to register their own company, AsiaBiz said that they are required to hire the service of a professional registration firm which must be accredited by the Accounting and Corporate Regulatory Authority (ACRA).
AsiaBizServices is the leading provider of Business Solutions in Singapore and has successfully helped thousands of foreign and local entrepreneurs Incorporate a Singapore Company.
address: 120 Telok Ayer Street Singapore 068589