Entrepreneurs' Guide to Incorporating in Singapore from Japan

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Embarking on the journey of establishing a business in a foreign country can be both exciting and challenging, especially for Japanese entrepreneurs considering Singapore as their new business destination. Singapore, known for its strategic location, robust infrastructure, and business-friendly environment, offers a myriad of opportunities for Japanese ventures to thrive.

In this guide tailored specifically for Japanese entrepreneurs, we will

Explore benefits of establishing a company in Singapore
Delve into the strong business ties between Singapore and Japan
Highlight essential considerations for launching a business in Singapore from Japan
Compare tax obligations and considerations in Singapore vs Japan
Shed light on Japanese business support organizations in Singapore
Outline steps to kickstart your business venture in Singapore.

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Benefits of Incorporating in Singapore from Japan

Registering a company in Singapore offers a multitude of advantages for Japanese entrepreneurs looking to expand their business horizons. While Japan and Singapore share similarities in their robust business environments, Singapore provides unique benefits that make it an attractive destination for company incorporation.

Gateway to Southeast Asia

Beyond its geographical significance, Singapore serves as a strategic gateway to the vibrant markets of Southeast Asia. With its well-established infrastructure and connectivity networks, Singapore provides seamless access to a diverse range of consumer markets, facilitating cross-border trade and expansion opportunities for Japanese businesses.

Tax Efficiency

Singapore boasts significantly lower corporate tax rates compared to many countries, including Japan. With a maximum corporate tax rate of 17% (compared to Japan's rate of 23.20%) and various tax incentives, businesses enjoy reduced tax burdens and enhanced profitability.

Double Taxation Avoidance Agreement (DTA)

The Japan-Singapore DTA ensures tax relief for Japanese residents conducting business in Singapore, preventing double taxation and optimizing profit retention.

No Capital Gains Tax

Unlike Japan, Singapore does not impose taxes on capital gains, providing businesses with greater financial flexibility and incentivizing reinvestment of profits.

Free Trade Agreements and IP Protection

Singapore's participation in free trade agreements and its robust IP protection mechanisms provide a secure environment for Japanese businesses, ensuring safeguarding of intellectual property rights.

Access to Investment Opportunities

Singapore's political and economic stability attracts substantial venture capital, providing Japanese entrepreneurs with access to a larger pool of funds for business expansion and development.

Ease of Doing Business

Renowned for its business-friendly environment and streamlined regulatory processes, Singapore offers ease of doing business, enabling quick company incorporation and welcoming foreign investments with minimal restrictions.

Government Incentive Programs

Singapore provides various incentive programs, including financial grants up to S$50 million, tax deductions, and loans for Singapore-incorporated companies. Additionally, non-financial incentives encourage business development through training and development programs.

Ease of Incorporation

Opening a company in Singapore is relatively straightforward with low barriers to entry, allowing for quick company formation within one day. The country allows 100% foreign ownership and offers various structures for businesses, such as subsidiaries, holding companies with minimal requirements.

Labor Force and Infrastructure

Singapore boasts a highly educated and multicultural workforce, complemented by world-class infrastructure and efficient legal frameworks, offering Japanese businesses access to top talent and facilitating seamless operations.

For further insights, we invite you to explore our in-depth article outlining all benefits and challenges of incorporating in Singapore.

Singapore-Japan Ties

In 2016, Singapore and Japan celebrated the 50th anniversary of the establishment of diplomatic relations, marking a significant milestone in their enduring partnership. Over the years, the bilateral relationship has deepened and broadened, fueled by regular high-level exchanges and robust economic ties. Beyond traditional areas of cooperation, such as trade and investment, Singapore and Japan are expanding their collaboration to encompass diverse fields including counter-proliferation, defense, environment, biomedical research, export control, and cyber-security.

Amidst the challenges posed by the COVID-19 pandemic, both countries have further strengthened their cooperation. This included initiatives to enhance supply chain connectivity, facilitate vaccine multilateralism, and facilitate the safe resumption of business travel.

JSEPA Agreement

A pivotal moment in the economic relationship between Singapore and Japan was the signing of the Agreement between Japan and the Republic of Singapore for a New-Age Economic Partnership (JSEPA) in 2002. This groundbreaking agreement, the first bilateral economic partnership for Japan and Singapore's first with a major trading partner, underscored the depth of their economic collaboration. Japan emerged as Singapore's third-largest trading partner in 2021, while also ranking as Singapore's second-largest investor by the end of 2022. Conversely, Singapore stood as Japan's top Asian and fourth largest foreign direct investor.

JSPP21 Program

Moreover, both nations converge on numerous regional and international issues, fostering close collaboration through initiatives such as the Japan-Singapore Partnership Programme for the 21st Century (JSPP21). This joint training program exemplifies their commitment to providing technical assistance to third countries, reflecting their shared values and aspirations for regional prosperity and stability.

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Essential Considerations for Starting a Business in Singapore from Japan

The ability to launch a business in Singapore from Japan offers numerous opportunities for entrepreneurs seeking to tap into Singapore's vibrant market. Here are the key considerations and essentials to keep in mind:

Incorporation Essentials

Foreigners have the freedom to establish an operating Singapore company, a subsidiary of their existing foreign company, or a holding company with 100% share ownership. Key requirements for incorporation include:

A minimum share capital of one dollar;
Appointment of a company secretary to ensure ongoing compliance;
Appointment of at least one Singapore-resident director;
A local registered address for the company.

CorporateServices.com offers comprehensive assistance to streamline the company registration process and ensure ongoing compliance.

Incorporation Cost

To cater to the needs of foreign entrepreneurs, we have tailored a special Foreigner Package (approx. ¥350,000) that covers all essential requirements for company registration. This package includes company registration, appointment of a company secretary, provision of a registered address, assistance with Employment Pass applications or provision of a resident Nominee Director, and support for opening bank accounts.

Singapore Visit

Physical presence in Singapore is not mandatory for incorporation from Japan or opening a corporate bank account.

Tax Obligations for Singapore Companies and Considerations

Navigating the tax landscape for your Singapore-based company from Japan is crucial for effective financial planning. Here's an overview of the key tax obligations to consider:

Organizations Supporting Japanese Business in Singapore

For Japanese entrepreneurs seeking to establish a presence in Singapore, accessing relevant support organizations can significantly facilitate the process. Here are some key organizations offering assistance and resources tailored to Japanese businesses:

Japan External Trade Organization (JETRO)

JETRO is a government-related organization that provides support to Japanese companies expanding overseas. In Singapore, JETRO offers various services, including market research, business matching, and consultation on investment procedures and regulations. Their expertise and network can be invaluable for Japanese entrepreneurs navigating the Singaporean market.

Japanese Chamber of Commerce & Industry (JCCI)

The JCCI in Singapore serves as a platform for Japanese businesses to connect, collaborate, and advocate for their interests in the local business community. The chamber organizes networking events, seminars, and business forums to facilitate knowledge exchange and partnerships among Japanese companies operating in Singapore.

The Japanese Association, Singapore

The Japanese Association, Singapore, established more than a century ago, serves as a hub for cultural exchange and community engagement. With a focus on promoting global exchanges and interactions with the Singaporean community, the association offers a range of facilities and activities designed to foster social connections and cultural understanding. Japanese entrepreneurs can leverage the association's resources and network to strengthen their ties with the local community and expand their business networks in Singapore.

Enterprise Singapore

Enterprise Singapore is the government agency championing enterprise development in Singapore. While not specifically focused on Japanese businesses, Enterprise Singapore provides a range of programs and initiatives to support all companies, including access to funding, market insights, and capability development programs. Japanese entrepreneurs can benefit from Enterprise Singapore's resources to enhance their competitiveness and growth in the Singaporean market.

Singapore Economic Development Board (EDB)

The EDB plays a crucial role in attracting and facilitating investments in Singapore. While not specific to Japanese businesses, the EDB provides comprehensive support to companies looking to establish or expand their presence in Singapore. From investment facilitation to industry development initiatives, the EDB offers a range of services to support Japanese entrepreneurs in their business endeavors in Singapore.

Steps Forward: Starting Your Business Venture in Singapore from Japan

Embarking on establishing your business presence in Singapore from Japan offers numerous advantages, which is confirmed by over 5000 registered Japanese companies already thriving in the city-state. With a strong interest from Japanese firms in utilizing Singapore as a base for regional expansion, our dedicated team stands ready to guide you through every stage of the process. From initial consultation to company incorporation and ongoing compliance, we provide tailored expertise to ensure a seamless transition. Contact us today to get started on your Singapore journey.

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We have been your clients for almost a year, and I highly commend you for the professionalism and the courteous attention that is always shown by Jacqueline, Sandy, Benny, and other team members. You helped us from getting our company set up to providing a one-stop solution covering tax, accounting, finance, legal, and other business-related advice (e.g. recommended us a reseller). Thank you for your outstanding work. Glad to have picked you as a partner and looking forward to many years of fruitful cooperation!

KAREN LAM, Thoughtful Food Pte Ltd