In Singapore it is possible to consider both the re-domiciliation of foreign entities to Singapore as well as the change of tax residence of a foreign entity to Singapore.
Moving the tax residency from one jurisdiction to another is also an option, but needs to take into account the changes being implemented as a result of the OECD BEPs project. Consideration will need to be given to any relevant Double-Taxation Agreements.
As an example see below a table reviewing the options for a BVI company that may be considering operating economically from Singapore:
|Options||Comments||Costs to consider|
|1- BVI company to become Singapore tax resident||Possible, BVI company can apply for a resident status in Singapore.
The company needs to be managed and controlled from Singapore, which supposes non-nominee resident directors and board meetings in Singapore + substance in Singapore (staff, office, fixed assets, etc.,).
The substance requirements for foreign-owned holding companies (receiving passing income) is more stringent.
|Cost of Director in Singapore plus accounting/tax filings cost
Cost of administration of the company in Singapore;
Cost of administration of the company in BVI;
Annual costs will include :
- Resident director :
- Board meetings :
- Staff salary :
- Social contribution :
- Office :
|2- Re-domiciliation of BVI company to Singapore||Singapore allows inwards re-domiciliation but the criteria are high (more than 7.5mUSD revenue and at least 50 employees)||Case by case|
|3- Establishment of a new Singapore company and transfer of assets under new Singapore company||Under this option, new Singapore company can be established, and the assets that currently belong to BVI company can be transferred under the new company.||Relevant costs regarding incorporation and maintenance of a Singapore registered company.|
For more background information on the global move towards requirements for businesses to have Economic Substance where they are based please read our new article here.