Singapore

Consulting/Due diligence Firm (1-3 People) Pros/Cons of setting up company in Singapore Taxation Rules & Annual Fees Visa Requirements / Rules on Hiring Local Staff

Brief Overview
Government Singapore is a republic with a Parliamentary system of government based on the Westminster model. The structure of the state is made up of the following: People The people of Singapore are largely descendants of immigrants from the Malay Peninsula, China and the Indian sub-continent. Total population ('000) Resident population ('000) Resident population growth Population Density Population by Race Population by age ('000) Official languages Main religions 5,076.7 3,771.7 1.8% per annum 7,022 Chinese (74.2%); Malay (13.4%); Indians (9.2%); Others (3.2%) Below 15 (654.4); 15- 64 (2,778.9); 65 and above (338.3) English (Language of administration), Mandarin, Malay (National Language) & Tamil Buddhism, Islam, Christianity, Taoism, Hinduism

Gross Domestic Product (GDP) GDP at current market price ($m) Per capita GDP at market price Money supply Official foreign reserves 303,652.2 59,813.0 112,465.5* 288,954.1

*Refers to the currency in active circulation and private sector demand deposits at end of year

Trade (2011) Total trade ($m) Total imports ($m) Total exports ($m) Productivity and Inflation Annual Growth in Labor Productivity (%) Annual Inflation Rate (%) Manufacturing Total Output 1($m) Investment Commitments in Manufacturing & Services (Fixed Assets Investments) Foreign Investments* ($m) 270,494.7 12,854.2 10,784.6 10.7 2.8 902,062.6 423,221.8 478,840.7

* Major trading partners: France, Germany, United Kingdom, Indonesia, Malaysia, Thailand, Japan, Hong Kong, Korea, Taiwan, China, Saudi Arabia, United States of America and Australia. 1 Classified according to Singapore Standard Industrial Classification (SSIC 2005); Refers to all manufacturing establishments Employment Employment (2010) Labour force ('000) Employed persons ('000) Unemployment rate* (%) Labour force participation rate**(%) Males Females 3,135.9 3,102.5 (Preliminary) 2.2 (Preliminary) 66.2 76.5 56.5 * Adjusted seasonally ** Based on the population aged 15 years and above

Singapore

Why Singapore
There are many superlatives attributed to Singapore and the city-state has been consistently ranked high for a number of reasons in reports from all over the world. Situated at the crossroads of international trade routes, Singapore is a top location for foreign investors, be they multinationals, part of Europes dynamic middle-market or technology start-ups. The on-going liberalization of markets and industries and the privatization of government-linked companies (GLCs) offer excellent opportunities to invest in Singapore and the neighboring markets. Integration of the 10 ASEAN countries under a free trade area (AFTA) with a population of more than 500 million people is on track. Free Trade Agreements with the US, Australia, Japan and many other countries provide easier access to the global market From Singapore you can access a market size of 2.8 billion people within 7 hours flight time. It its located within the Association of Southeast Asian Nations (ASEAN) representing a combined market of more than 500 million people. Singapore's seaport offers transport to more than 600 ports in 123 cities. Changi Airport won the Best Airport Award four times in a row and links to 140 cities in 50 countries. Rank Title 9 1 1 2 1 4 2 1 1 1 1 Business Competitiveness Index 2007-2008 World's easiest place to do business Best Business Environment" spot in Asia Pacific World for Global Potential Competitiveness Best Labor Force Most attractive investment incentives in Asia Best Investment Potential Worldwide Best Investment Potential in Asia Best in avoiding Bureaucracy and Red Tape in Asia Of the World's Top 20 Most Globalized Nations The best place to live for Asian expatriates Source/Year World Economic Forum 2007-08 World Bank report: "Doing Business 2007: How to Reform" EIU Country Forecast, January 2007 Japan Center of Economic Research, 2007 BERI's 2007 Labor Force Evaluation Measure report IMD World Competitiveness Yearbook 2005 BERI Report August 2006 BERI Report August 2006 Political and Economic Risk Consultancy, June 2006 A.T. Kearney/FOREIGN POLICY Magazine Globalization Index 2006 ECA International 2006

At the heart of Singapore's thriving business ecosystem is a unique blend of competitive strengths that makes Singapore the location of choice for global enterprises. This distinctive combination of CORE competencies, coupled with Singapore's physical and metaphorical location between Western sophistication and Eastern growth potential, confers a host of benefits to the businesses that invest and reside here. A cosmopolitan society, Singapore is an ideal platform for the meeting of global talents, ideas, funds and businesses.

Connectivity Singapore's extensive network of Free Trade Agreements, Avoidance of Double Taxation Agreements and Investment Guarantee Agreements, as well as its comprehensive air, sea and IT infrastructures, provides for the seamless flow of goods and services to markets around the world. Openness Singapore's willing acceptance of globalization, and its corresponding foreign cultural and economic infusion, has a circuitous effect on the national ethos through the engendering of cosmopolitanism, which in turn stimulates openness. With a foreigner-local ratio of 1:4 and university enrolment of foreign students at 20% of yearly intake, Singapore has demonstrated its favourable reception of differing cultures, thus explaining its ranking as the best place to live in Asia (ECA International 2005). Reliability Singapore's safe, pro-business environment is supported by a well-respected government with transparent and consistent policies that protect companies' physical and IP investments. Enterprise Home to a concentration of international enterprises, headquarters operations and startups, Singapore has a vibrant enterprise ecosystem that fuels interaction and growth. Fast Facts about Investing in Singapore

26,000 international companies call Singapore home. Of these, 60% of 7,000 foreign MNCs have regional activities in Singapore. Singapore holds top spot as the best place in Asia for expatriates to live. Singapore stands out for a combination of excellent infrastructure, cosmopolitan make-up, low crime rate and socio-political stability according to ECA Internationals survey. One-third of the FT500 companies with Asian HQs have chosen Singapore. Singapores network of over 50 comprehensive Double Taxation Avoidance Agreements, and over 30 Investment Guarantee Agreements give HQs here an edge for cross-border activities. As signatory to Paris Convention for the Protection of Industrial Property and the Agreement on TradeRelated Aspects of Intellectual Property Rights, Singapore provides added protection for companies seeking to maximize their IP potential. Regional treasury centers are attracted to Singapore to tap on one of the worlds largest foreign exchange market with a strong base of financial institutions. Singapore is amongst a handful of countries with AAA credit rating.

Singapore is a premier choice location for International Headquarters Singapore has been a choice HQ location in Asia where American, European and Japanese companies engage Asia. In recent years, Asian companies have also chosen Singapore as a Launchpad for engaging the world! It is in Singapore that they can interact, transact and form exciting partnerships. Singapore continues to attract new players, many of those already here are expanding and taking on increasingly sophisticated and substantial activities. These include regional or global strategic business planning & development, corporate training, finance & treasury, R&D, intellectual property management and supply-chain management.

Starting up a Business
1. GENERAL There is no restriction on foreign ownership and there is no exchange control. 2. BUSINESS ENTITIES Persons who are interested to carry on business in Singapore must register an entity, and the entities may be any of the following: A sole-proprietorship and partnership A Limited liability partnership A company incorporated in Singapore A branch of foreign companies Representative Office Sole-proprietor and partnership All sole-proprietor or partnerships are registered under the Business Registration Act, Cap 32. A sole proprietorship only requires 1 member whereas a partnership can take 2-20 members. The advantages of such businesses are that they are easy to form, maintain and dissolve. No annual return is required to be submitted to the Accounting and Corporate Regulatory Authority (ACRA) and the accounts are not subjected to audit. However, registrations have to be renewed annually. However, the disadvantage is that a sole-proprietor is personally liable for the liabilities of the business, whereas in a partnership, all partners are jointly liable for the partnership debts and obligations. The liability of the partners is unlimited. Limited Liability partnership A Limited Liability Partnership (LLP) is a relatively new vehicle for doing business in Singapore. An LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company. Characteristics of a LLP: The partners can be individuals or companies. There must be a minimum of 2 partners. There is no maximum number of partners in a LLP. A LLP is a legal entity (i.e. it can sue or be sued in its own name and can own or hold any property, and do such other act in its name). LLP has perpetual succession, which means any change in the partners of a LLP will notaffect its existence, rights or liabilities.

LLP are required to submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public. The advantages of LLP are that it has limited liability, perpetual succession and is easy to administer. However, as compared to sole-proprietor business and partnership, it has more formalities and procedure to comply with. Companies A limited liability company is commonly used to carry out business in Singapore. A company may be private or public and may be limited by shares or by guarantee. Private Company Characteristics of a private company: Does not have more than 50 shareholders Restrict rights to transfer shares Prohibit against invitation to the public to subscribe to its shares and debentures Can commence business immediately upon receiving certificate of incorporation A private company may be classified as an exempt private company (EPC) if it is not directly or indirectly owned by any corporation and has less than 20 shareholders. The main advantage of an EPC is that is can advance loan to directors and they are exempted from filing the accounts together with annual return with RCB, if the directors, secretary and auditors certify that the company is solvent and the company has complied with requirements of private company. Procedure to register a private limited company Name of company is submitted to ACRA for approval. Certain activities such as education institutions, travel agent, maid agency etc will require approval or licenses from the relevant government authorities before commencement of business A minimum of ONE natural persons over 21 years old must be appointed as director, one of which must be a Singapore Citizen, Permanent Residence or Employment Pass Holder. A minimum of ONE person to subscribe to the Memorandum and Articles of Association Submit the statutory forms and Memorandum and Articles of association to ACRA together with a registration fee of SGD300, regardless of the share capital.

Public Company A company has to be registered as a public company if it intent to invite the public to subscribe to its shares or debentures. There will not be any restriction on transfer of shares, and there is unlimited number of shareholders. However, it cannot commence business until Certificate to commence business is issued by ACRA. Branch of foreign companies Besides registering a company, foreign companies who wish to commence operations in Singapore may choose to register a branch in Singapore. A branch is an extension of the head office and is not limited in liability as compared to a limited company. The following documents are required to be submitted to ACRA for registration: Certified copy of the certificate of incorporation Copy of memorandum and articles of association A list of directors Memorandum of appointment or power of attorney stating the names and addresses of two or more persons residents in Singapore as agents and authorized to accept on its behalf notices required to be served on the company Notice of situation of the companys registered office in Singapore The agent of a foreign branch is responsible for the requirements of the foreign branch under the Act and is personally liable for the any penalties imposed on the foreign branch for contravention of such requirements. The registration fee payable for a foreign company with share capital is SGD300 and that without a share capital is SGD1, 200. Representative Office A foreign company may choose to set up a Representative Office (RO) for the carrying out promotional and liaison work. There are minimal reporting requirements and no liability for Singapore Income Tax. The activities are limited and subjected to approval of International Enterprise Singapore. The terms and conditions of Representative Office (RO) are as follows: The RO must confine its activities to promotion and liaison on behalf of its parent company The RO must not engage in any trading (including import and export), businesses activities directly or on behalf of the parent company. The RO must lease warehousing facilities. Any

shipment/transshipment or storage of goods should be handled by local agent or distributor appointed by its parent company. The RO must not lease its office to other establishment at a fee. The RO must not sign business contract, issue invoice/receipt. Open/receive letters of credit and contacts on behalf of the parent company or provide service for a fee The RO must be represented by their own HQ/local staff The RO must notify International Enterprise Singapore (IE) prior to changing the nature of activities as specified in the registration form. However, RO are not permanent establishments. The registration of RO grants temporary business facilities for the company to engage. It is normally intended to last 2-3 years, by then the RO would have sufficient time and opportunity to decide on the types of business entities to register. 3. TAXATION CONSIDERATION Taxation in Singapore is on territorial basis. Income is levied on a corporate and persons income if it is sourced from Singapore or received in Singapore from other countries. The following income is subjected to income tax: Gains or profit from any trade, business, profession or vocation Gains or profit from employment Dividends interest or discounts Pensions, charges or annuities Rents, royalties, premiums and any other profit arising from property Gains or profits of an income nature not falling within the preceding categories Corporate Tax Rate The current tax rate is 18%. 75% of the first $10,000 and 50% of the next $290,000 is exempted from tax. Individual Tax Rate Individuals who are tax residents are currently assessed at progressive rates ranging from 0% for chargeable income up to $20,000 to a maximum of 20% for income in excess of $320,000. Withholding Tax

Certain payments (eg royalties, interest, directors fees, management fees) paid to non-residents will be subjected to withholding tax. Rates are generally 10% to 20%. Goods and Services Tax (GST) 7% GST is payable on all imports into Singapore and sales by registered traders must charge 7% on sales except for export and some exempt supplies.

Summary of procedures for starting a business in Singapore Time & Cost:

Summary of Tax Rates & Administrative Burden