Singapores leading business registration firm Rikvin believes that the private limited company is one of the most advantageous business structures as it protects the personal assets of shareholders from business-related debts and losses, and gives several tax benefits and developmental incentives.
This business structure, which is more commonly known as corporation in other countries like the US, regularly uses suffixes such as Ltd and Pte Ltd as part of its business name.
In Singapore, a private limited company is not only preferred by most local businessmen but also foreign entrepreneurs who want to enjoy the local tax rates and tax benefits and exemptions.
A company, even if owned by foreign individuals or corporate entities, may still be considered as a tax resident as long as it practices its management and control locally, and at least one individual shareholder owns a minimum of 10 percent shareholdings, Rikvin said.
The business registration specialist said that tax residents enjoy Zero Tax and 50 percent tax exemption on their first S$100,000 and S$200,000 chargeable incomes, respectively, within three years of their incorporation.
Aside from the tax exemptions, the firm added that some companies may also qualify for lowered tax rates if they are included in these following industries: Asian currency unit, cyber trader, oil trader, offshore leasing, arts and antique dealer, finance and treasury, securities and insurance, international commodity trader, pioneer/incentives, and trustee.
Another advantage of a Singapore private limited company is the asset protection enjoyed by shareholders.
One of the most important features of a Singapore company is the limited liability which protects the personal assetssuch as cars and housesof the shareholders from all the business-related debts, losses, and claims. With this provision, businessmen will have an assurance that in the event of bankruptcy, they will not lose their entire fortune, Rikvin said.
And because of the countless of advantages enjoyed by a private limited company, even foreign entrepreneurs and companies in Singapore prefer this type of business setup, the firm added.
However, the business registration firm said that foreign corporate entities and individuals are prohibited to self-register their business which makes it a requirement to hire a professional company that will act on behalf.
Foreign businessmen who want to form a Singapore company should make sure that they only hire a professional registration firm which has been accredited by the Accounting and Corporate Regulatory Authority (ACRA). In this way, they will have no problem during the application process, Rikvin added.
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