A recent comparative study of company incorporation requirements in Singapore and India by www.guidemesingapore.com demonstrates that it is easier to start and operate a business in Singapore than India.
The results of the study reveal the following significant differences between both the jurisdictions:
- While Singapore is ranked as #1 in the world for ease of doing business, India fares poorly in comparison and is ranked as #133 amongst 183 economies
- Singapore permits 100% foreign ownership of a Singapore private limited company and allows companies to engage in any legal business activity. India allows 100% foreign ownership of a private limited company only in certain business sectors. Some sectors are subject to caps on investment limits and require prior approval from the Indian government, while certain other sectors prohibit foreign investment.
- The minimum paid up capital to incorporate a Singapore company is S$ 1, as compared to the paid up capital requirement of INR 100,000 (approx. S$ 3,000) for an Indian company.
- A Singapore company can be registered with a single shareholder and director, whereas a minimum of two shareholders and directors are required to incorporate an Indian company.
- The time-line for Singapore company incorporation is less than 24 hours, while it normally takes 1-2 months to register a company in India.
- Company incorporation in Singapore is streamlined with minimal procedures. Company formation in India is a lengthy and complex procedure, involving transactions with several government bodies.
- In Singapore, small companies are exempt from filing audited accounts with their annual return. By contrast, all Indian companies must file audited accounts with their annual return.
- All Indian companies must appoint an auditor, whereas smaller companies in Singapore are exempt from this requirement.
- Singapore charges a corporate tax rate of approximately 8.5% for profits up to S$300K and a flat 17% for profits above S$300K. The corporate tax rate in India is 30.9% for taxable income up to INR 10 million and 33.9% for taxable income above INR 10 million. According to a recent tax comparison report issued by GuideMeSingapore.com that considers the case of a hypothetical start-up firm expecting to make an annual income of US$300k, the firm will have a total tax bill of only US$34k in Singapore while it would face an approximate tax bill of US$102k in India.
- It is easier for foreign entrepreneurs to gain entry into Singapore under its work visa schemes as compared to procuring a work visa in India.
"India's cumbersome entry procedures for starting a business, its long-winding legal formalities and procedural delays are some of its setback areas that deter foreign investment. In many ways, Singapore has set the benchmark for starting a business. With a 24 hour time line for company incorporation, extremely low corporate taxes, a liberal foreign ownership policy and minimal procedural compliance it is undoubtedly the easiest place to start a business and keep it running,Ã¢â‚¬ said Andrew Chen, a spokesperson from the Singapore based information portal GuideMeSingapore.com that released the analysis report.
The study affirms that Singapore offers a better and more business friendly climate for foreign entrepreneurs to re-locate and establish their business operations.
To learn more setting up a company in Singapore, refer to Singapore Company Setup: http://www.guidemesingapore.com/company-setup/c312-singapore-company-registration-details.htm guide.
For information on taxes in Singapore, see Singapore Taxes: http://www.guidemesingapore.com/business/c647-singapore-tax-system-overview.htm guide.
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