Utilising Singapore for Investment into Asia
The Non-resident Company
The Limited Liability Partnership
The Singapore taxation system is territorial and therefore income tax is only levied on net income from Singapore sourced revenue or on foreign sourced income remitted to Singapore.
The corporate tax rate is currently 17%. There is no capital gains tax and Singapore does not impose withholding tax on the payment of dividends, rentals or technical assistance. It is also important to note that Singapore provides certain exemptions on foreign income remitted to Singapore. If such income has suffered taxation of at least 15% in the remitting country.
Singapore has an extensive double taxation treaty network covering 80 countries but notably not with the United States of America and includes China, Indonesia, Korea, Malaysia, Pakistan, Taiwan, Thailand and Vietnam.
A Singapore Company is deemed to be resident if the central management and control is exercised in Singapore. Therefore if the Directors and Members reside outside Singapore the company would be deemed to be non-resident for tax purposes thus foreign sourced income, which is not remitted to Singapore, would not be chargeable to taxation.
The Limited Liability Partnership is a body corporate registered under the Limited Liability Partnership Act 2005 and has a legal personality separate from that of its partners (Members) and therefore offers limited liability.
The distinct advantage of the Singapore LLP is that it has the features of a company but it is taxed and operated as a partnership. Therefore assuming that there is no Singapore sourced income and the partners reside outside Singapore there would be no liability to taxation in Singapore.
In conclusion, the Singapore Company, whether resident or non-resident or the LLP, if structured and managed properly is an ideal corporate vehicle for International Investment in Asia and elsewhere.