Singapore is one of the most attractive investment destinations today. Whether you’re a resident or a foreigner looking for an ideal place to grow your business, the country offers multiple benefits. One of the major reasons to invest here is the streamlined business registration process. Singapore ranks top in the Global ‘Ease of Doing Business’ and also boasts one of the most relaxed tax regimes. The country also ranks high for its Intellectual property protection, infrastructure, skilled labour and more.

You have several legal structures to choose when setting up a business in this economic hub. However, company incorporation offers more benefits than the other structure available. If you plan to start a business here or you already have one in place, this post looks at the benefits of incorporation.

What’s Business Incorporation?

Business incorporation refers to the process of turning your business into a separate legal entity apart from you and other investors or shareholders. If you run a sole proprietorship or a general partnership, you can turn it into a legally recognised entity under the Company Act.

Your incorporated company is seen differently when operating in law as opposed to a sole proprietorship. This is because the assets and revenues are separate from the owners or investors. This is an entity that can transact business with the government, private organisations, and financial institutions.

The process of company incorporation in Singapore goes through the Accounting & Corporate Regulatory Authority (ACRA), which is the Company Registrar. It involves drafting and submitting the articles of incorporation, company name, listing the firm’s shareholders, assets, company secretary, registered physical address, initial paid-up capital and a resident director.

There are documents required in the registration process, including particulars of the directors and shareholders, identification documents and more. A Singapore business registration service can ease the process by guiding you through the entire process.

Why Incorporate your Business?

If you’re already running a successful business in the country, is there any need to incorporate it? Or do you need to incorporate your new business? The following are benefits that make a case for business incorporation.

Liability Protection

When running a sole proprietorship or a partnership, you’re liable for any debts your business accumulates. In case the business can’t pay, your assets are at risk because there’s no legal separation from you and the business.

This is one of the reasons to incorporate your company because you get legal protection from your business liabilities. If an incorporated company can’t pay debts, creditors have to go to court and pursue the company assets but they can’t come for the assets of the investors or shareholders.

Tax Benefits

Taxes eat into your business revenue and the smartest investors look for ways to reduce the tax burden. Incorporating your Singapore business can give you some tax breaks such as tax exemption on foreign subsidies, dividends are tax-free, deductions for some asset purchases and expenses. There are also options for registration to avoid double taxation under the Singapore Company Act.

Easy Access to Capital

One of the biggest hurdles for small businesses is lack of capital. Many investors start their ventures with little capital in the hope that the business will break even quickly. However, the business environment today is tougher than ever and there’s a need for quick access to capital.

Financial institutions are more comfortable dealing with incorporated companies as opposed to sole proprietorships. This means you can access credit facilities to keep your business running even when things are tough. You also get more favourable terms for such financing because a registered business is less of a risk to the lender.

Boosting Credibility

In the fast-paced Singapore business environment, you need to build strong networks fast. For a new business, this is not easy because most customers, suppliers, creditors and other entities like dealing with established companies.

However, you can boost your standing by incorporating your business as this makes it more professional and appealing.  You’ll find it easier when looking for partnerships in your niche when you have that “Inc.” or “Corp” after your business name. These names give your business a sense of credibility, and stability which is what your partners need as an assurance.

Perpetual Existence

A corporation enjoys more endurance because it’s a legal entity and continues operating indefinitely. When a manager, investor or a shareholder leaves, this can’t stop the business from operating. When you incorporate your business, you avoid the legal entanglements that are common in partnerships and other informal business structures.

Easy Transfer of Ownership

Transfer of shares between shareholders makes it easy to transfer ownership. There are regulations in the Company Act and the company’s constitution guiding the transfer of ownership.

Wrapping Up

Investing in Singapore is a smart decision for many reasons. If you plan to start a business in the country or you already have one in operation, incorporating it allows you to get more out of this market. You give your enterprise credibility, easier access to credit, tax benefits and you protect yourself from the company liabilities.