5 Ways Engaging A Company Incorporation Firm Can Help To Reduce Your Taxes

Singapore Government Tax

If there is one thing to love about the government of Singapore, it is that it genuinely seeks to promote entrepreneurship so that new start-up companies are given support structures to grow. Among many other ways, the Singapore government does this in three ways: through tax exemptions, rebates, and incentives.


The problem is, many new entrepreneurs – both local and foreign – do not know that such tax exemptions, rebates and incentives exist.
This is where engaging a company incorporation firm becomes helpful.

A company incorporation firm is a service provider that registers your company or business with the Accounting and Corporate Regulatory Authority (ACRA), which is Singapore’s regulatory body for businesses and public accountants.

Beyond helping you register your business, a company incorporation firm will also advise you on what business structure is best for you to set up – so that you can effectively start and grow your business and also tap on government support for your business such as tax exemptions, rebates and incentives.

How can a Company Incorporation firm help you tap Government support for your business?

A company incorporation firm can help you tap government support for your business in these five ways:

1. It helps you to know what support schemes are available

The Singapore government applies a flat rate of 17% on a company’s chargeable income for both local and foreign business.

New, start-up businesses, however, are given a 100% tax exemption for the first $100,000 chargeable income they make and a further 50% tax exemption for their chargeable income amounting $200,000 for the first three consecutive years of assessment (YA).

2. It registers the right business structure for you so you can avail of these support schemes

A company incorporation firm will also advise you that if the business you plan to set up is primarily engaged in investment holding or developing properties for sale, investment or both, then the tax exemption will not apply.

Apart from these two types of business, other business types can qualify for the tax exemption provided they fulfil the requirements set forth by the IRAS.

These requirements include:

  • The company must be duly incorporated in Singapore and is a tax resident for that year of assessment
  • The company must have no more than 20 shareholders with at least one individual who is “beneficially and directly” holding the shares under his or her name, or at least one shareholder is “beneficially and directly” holding at least 10% of the issued ordinary shares of the company.

3. It files updated reports so that you can be in good standing with the government

Most company incorporation firms offer corporate secretarial services as well. A corporate secretary takes care of complying with the government’s reporting requirements.

4. A company incorporation firm can also guide you on partial tax exemption schemes

Companies that have not yet claimed the tax exemption benefits for new and start-up companies can avail of partial tax exemption. Companies can enjoy:

  • 75% tax exemption on the first $10,000 normal chargeable incomes, and
  • A further 50% tax exemption on the next $290,000 of normal chargeable income.

5. A company incorporation firm may also advise you of other support you can get from the government, like tax rebates and the SPRING Singapore

SPRING Singapore, which is an agency under Singapore’s Ministry of Trade, is mandated to help start-ups grow.

SPRING offers different support structures, one of which is the Incubator Development Programme (IDP) for nurturing start-ups. The IDP offers up to 70% grant support which new entrepreneurs can use in three ways: to fund the development of new products or services, to engage mentors who will provide much-needed guidance on entrepreneurship and to cover operating costs, such as salaries, marketing activities, promotional events, among others.

Not all company incorporation firms are created equal. To harness these benefits and more, engage a professional company incorporation firm who first understands your business and carries out a tailor-fit solution to help you succeed.

The right company incorporation firm could be your best ally in establishing your business on solid ground. Look at several options, conduct informational interviews to get to know them better, and then make a choice for the firm that cares about your business success like it’s their own.

Posted in Company Incorporation.