Eternity Law International News Ready-made company in Singapore

Ready-made company in Singapore

Published:
October 4, 2022

Singapore, often referred to as the “Lion City,” stands as a beacon of economic opportunity in Southeast Asia. Foreign entrepreneurs and businesses from around the world are drawn to its robust economy, strategic location, and business-friendly environment. One way to expedite your entry into this dynamic market is by purchasing a ready-made company. In this article, we will delve into the advantages of acquiring a pre-existing company in Singapore, the process of buying one, the necessary documentation, the purchase procedure, taxation considerations, the associated costs, and what’s included in the cost of services.

Benefits of Buying a Company in Singapore

  • Immediate Market Entry: Acquiring a shelf company grants instant access to the Singaporean market, allowing you to bypass the lengthy process of registering a new business entity.
  • Established clientele base: Many existing companies in Singapore already have a track record, a clientele base and reputation, which can be instrumental in building trust and attracting partners.
  • Reduced Risk: A registered company for sale  often comes with a financial history, which can provide insights into its performance and help mitigate the uncertainty inherent in starting a new venture.
  • Operational Infrastructure: You might inherit an existing office space, equipment, and, in some cases, an experienced office, streamlining your business operations.
  • Visa Facilitation: Owning a Singaporean company can simplify the process of obtaining visas for you and your employees, making it easier to conduct business within the country.

How to Buy a Ready-Made Company in Singapore

  • Market Analysis: Commence your journey by delving into thorough foreign  market analysis, exploring the industry and geographic locale that harmonize with your business objectives. This diligent exploration will enable you to pinpoint well-matched ready-made companies available in the market.
  • Expert Guidance: Consider enlisting the expertise of legal and financial professionals or collaborating with a seasoned business broker with a specialization in company acquisitions. This prudent step offers guidance through the intricate process and guarantees a seamless and efficient transaction.

Documents and Prerequisites

  • Business Plan Creation: Elaborate on your enterprise’s aspirations, tactics, and vision for the procured company by meticulously drafting a comprehensive business plan.
  • Thorough Due Diligence: Undertake an exhaustive due diligence process aimed at evaluating the fiscal soundness, legal status, and potential obligations of the company.
  • Preparation of Legal Papers: Assemble indispensable legal documents, including but not limited to a purchase agreement, articles of incorporation, and forms for the seamless transfer of ownership.
  • Maintaining a bank account: Opening a bank account in Singapore is a straightforward process, but it does require some planning and documentation.

Purchasing Process

  • Negotiation Phase: Initiate discussions with the seller to negotiate both the purchase price and the terms governing the transaction. Ensuring the achievement of mutually acceptable conditions is of paramount importance.
  • Final Due Diligence: Execute a conclusive review of due diligence to validate the company’s assets, liabilities, and adherence to legal norms and regulations.
  • Execution Stage: Proceed to the formalization of the acquisition by endorsing the purchase agreement, facilitating the transition of ownership, and fulfilling the stipulated financial commitments. Rigorous adherence to all legal and fiscal responsibilities is imperative.

Taxation in Singapore

When it comes to buying a registered company in Singapore, gaining a comprehensive understanding of the associated tax implications is not just advisable; it’s absolutely essential. Singapore’s tax framework is known for its friendliness towards international businesses, but it still requires careful navigation to ensure compliance and optimize financial planning. Here’s a deeper look into the key tax considerations:

  • Corporate Tax: The Competitive Edge

One of the primary advantages of doing business in Singapore is its highly competitive corporate tax rate. At the time of my last knowledge update in September 2021, Singapore had a flat corporate tax rate of 17%. This rate is significantly lower than what many other countries impose. It means that businesses operating in Singapore generally enjoy a lower tax burden on their profits.

However, the corporate tax landscape can be nuanced, and it’s essential to consult a tax expert who specializes in Singaporean tax laws. They can assist you in navigating the specifics of your tax obligations, ensuring that your company complies with all regulations and takes full advantage of available tax incentives and deductions.

  • Goods and Services Tax (GST): Threshold Matters

There is no VAT in Singapore. Singapore levies a Goods and Services Tax (GST), which is akin to Value-added tax (VAT). The GST rate in Singapore is typically 7%. However, it’s crucial to be aware of the GST registration threshold. If your company’s annual turnover exceeds SGD 1 million, you are required to register for GST. Once registered, you will need to charge GST on your goods and services and submit regular GST returns to the tax authorities.

Navigating GST regulations can become complex, especially if your business operates in various industries or engages in international trade. It’s advisable to work with a tax consultant who can guide you through the GST compliance process and ensure that your business adheres to the applicable rules.

How Much Does a Ready-Made Company in Singapore Cost?

The price of purchasing a ready-made company in Singapore can vary widely depending on factors such as industry, size, financial health, and included assets. Smaller businesses may range from SGD 5,000 to SGD 15,000, while larger enterprises can be significantly more expensive. Additional expenses may include legal fees, due diligence costs, and potential renovations or upgrades to the business.

What is Encompassed in the cost of services

When you embark on the journey of acquiring a pre-established company in Singapore, it’s imperative to grasp the comprehensive scope of services that are typically encompassed within the associated costs. These services extend far beyond the mere transfer of ownership, contributing to the holistic value of your investment. Here’s a detailed exploration of what is commonly integrated into the cost:

  • Business Assets:The bedrock of any company, whether established or newly formed, resides in its assets. When you purchase a shelf company for sale in Singapore, the cost invariably embraces a spectrum of assets that underpin its value.
  • Licenses and Permits:Operating a business within the bounds of legality necessitates the acquisition of various licenses and permits, each contingent on the specific industry and scope of operations.
  • Legal Assistance:The labyrinthine journey of acquiring a company in Singapore entails multifaceted legal intricacies. A portion of the cost is often allocated to engage the services of legal experts well-versed in Singaporean business laws.
  • Consultation:Transiting into your new role as the proprietor of the acquired company necessitates a nuanced understanding of the local business landscape, market dynamics, and industry-specific nuances. Herein lies the significance of consultation, a component routinely offered by sellers as part of the package.

In essence, the cost of services associated with acquiring a ready-made company in Singapore transcends the mere transfer of ownership. It encapsulates a comprehensive set of assets, legal support, and strategic guidance, each playing a pivotal role in facilitating your entry into Singapore’s vibrant business milieu.

In conclusion, purchasing a ready-made company in Singapore presents a strategic opportunity for entrepreneurs seeking expedited market entry with reduced risks. However, thorough research, legal due diligence, and financial planning are essential for a successful acquisition. Understanding the tax implications and the overall cost of services will empower you to make an informed decision on this exciting entrepreneurial journey in the Lion City.

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