Buy an offshore IT company in Singapore
Singapore is quickly becoming a global information hub, so IT technology is in particular demand. According to a recent Reuters report, up to 500 new tech jobs are every weekly on job sites in the country. That means there are plenty of opportunities for IT companies in Singapore. However, to avoid starting a business from scratch and going through many bureaucratic procedures, we recommend buying an offshore company in Singapore for IT.
Pros of Singapore for IT
Singapore is widely known as "Asia's emerging silicon valley." Last year alone, more than 4,000 tech startups were operating there, and the number is expected to increase significantly in 2023.
It is because the government is working hard to turn Singapore into the world's first truly "smart nation" and create a digital-oriented economy. Therefore, it offers many exciting incentives, opportunities, and grants for technology start-ups.
Among the advantages of IT activities in Singapore are also worth mentioning:
- progressive information and technology infrastructure;
- friendly business ecosystem;
- stable political and economic situation;
- favorable business policy;
- attractive taxes;
- a skilled workforce;
- advanced digital trade;
- government grants to support technology start-ups;
- strict intellectual property protection laws to help protect their product.
Singapore officials plan to open Punggol Digital District in 2024. It is designed specifically for IT companies which will be able to test digital and innovative solutions for everyday life there.
We can't talk about Singapore as a classic offshore in the literal sense, because you have to pay taxes. Nevertheless, there are some benefits that the government has introduced to attract foreign investment and support local businesses:
- A flat corporate tax rate of 17%.
- If the income was earned abroad and not credited to Singapore banks, there is no need to pay tax.
- No tax on dividends and capital gains.
- Singapore has signed a double taxation avoidance agreement with more than 80 countries worldwide.
Startups during the first three years get a 75% exemption from paying the first $100k of ordinary taxable income. Then, if they earn another $100k, they get an additional 50% exemption.
Buying an IT company in Singapore: what you need to know
Singapore allows 100% foreign ownership, so there is no need to look for a local partner. IT companies are usually recommended to buy a closed company with limited liability or an open company.
When an investor selects the appropriate type of structure and agrees on all the details with the seller, a sale and purchase contract is prepared with the subsequent transfer of ownership. The deal is made at the notary, and registration takes a few days.
After signing the documents, the buyer receives:
- Certificate of Incorporation and Business Profile;
- Memorandum of Association and Articles of Association, which can only be amended (e.g. by changing the details of the shareholders);
- Corporate account;
- Legal address;
- Taxpayer identification number, GST number, etc.
When the transaction is completed, the owner can appoint new directors and a secretary, increase capital, change facilities, and address. Within 14 days of the transaction, a notice must be sent to the Accounting & Corporate Regulatory Authority (ACRA). It must contain information about:
- change in ownership;
- a new or old registered office address;
- new officers;
- changes in the stock.
When the paperwork is complete, you can begin to work. The investor can hire local employees or invite foreigners. For non-residents, it is required to obtain a work permit first.
How to buy an IT company in Singapore
Contact IT-OFFSHORE specialists to buy an offshore company in Singapore for IT 2023.