Singapore is one of the most business-friendly countries in the world . The government has made it extremely easy for entrepreneurs and small business owners to register their companies and hire talented employees (learn more about Form a Singapore Company: 4 Reasons Why ).
While there are a variety of different types of businesses that one can set up in the country, a limited company is often the preferred choice. Limited companies offer a wide range of benefits that other types of corporations cannot:
Lending and Raising Capital: It is generally easier for limited companies to raise capital for expansion or other purposes. The company can sell shares to new shareholders or current owners of the company. Banks also prefer limited companies when they loan money to businesses.
A limited company is also perfect for a small business owner who needs to attract investors. Because a Ltd company is a separate legal entity, investors often find that these businesses offer the most amount of protection.
Tax Benefits: With a capped corporate tax rate of 17 percent, many entrepreneurs who are looking to form an offshore business choose to set up a Singapore company. If a company’s profits are under SGD 300,000, the tax rate is only 9 percent.
Unlike the United States, Singapore does not have a capital gains tax. Whenever funds are distributed to shareholders, they don’t have to worry about paying any type of taxes on their new found wealth.
Transfer of Ownership: Transferring a limited company is a very easy process.
Normally, when someone wants to sell a part of their company to a new owner, a large amount of paperwork is required. However, limited companies can be transferred to new owners with minimal paperwork by selling shares or issuing new shares to an individual or a group of people.