Singapore (PRWEB) October 13, 2012
Offshore Company Incorporation is enjoying great attention due to the numerous benefits it can hold for a corporation. A growing trend among Singaporean businesses, this completely legal method of tax saving has taken the world by blast. It makes use of the tax regulations that prevail in Singapore in such a way that they can become advantageous for a company that is aiming at keeping its costs low and profits high.
An increasingly large number of professionals have discussed the concept of foreign company incorporation at several prominent platforms. Many tax advisors and management teams have researched on ways to cut the ever-increasing costs of a business operating in Singapore. Given the tough competition that exists in the market, it is next to impossible for a company to raise its prices without instigating cries of objection and plunging sales from the consumers. Hence, it was decided to find a way around the existing laws in order to optimize the conditions that prevail. As a result of prudent negotiations and long periods of research and development, the idea of offshore company incorporation has taken birth in this part of the world.
Although fairly recent, the concept has caught on like wildfire as more and more businesses want to make use of this clever tactic to reduce their tax liability. For companies that are making great revenues, it is important that they also make sensible decisions in terms of their taxes so that they can improve their financial position. Corporations that have been able to save their taxes to a certain extent have saved millions of dollars. This money is often used as reinvested capital or utilized in expansion, acquisitions and mergers. All in all, tax savings increase the cash flow of a company by a large amount, increasing the value of the business and hence, making it more successful.
Offshore Company Incorporation is highly valuable for businesses and also for individuals residing in Singapore. The biggest support for this claim is that the Singaporean law permits this action and enables its citizens to make full use of this option in order to benefit their company or private holding. Since Singaporean legislation follows a territorial approach to taxation, income that has a foreign source is not taxed within Singapore. According to the Inland Revenue Authority of Singapore website (http://www.iras.gov.sg/irasHome/page04.aspx?id=154), “overseas income received in Singapore on or after 1 Jan 2004 is not taxable”. This means that a business or private individual can use offshore company incorporation to reduce its tax burden without committing any illegal action that can result in punishment.
Many individuals and businesses that want to save their tax liability, do so by ensuring that their revenue is received by an offshore company. This approach is taken by owners of intellectual property, for example computer software, trade secrets, copyrights, technical knowledge, patents and trademarks. These assets are represented as being under the ownership of an offshore company by giving the company the rights to these properties. Such rights can be assigned under different kinds of agreements, such as a license or franchise agreement. However, the offshore company should be in a lower rate jurisdiction in order for the tax to be minimized.
Singaporean companies and investors that have stocks, bonds, securities, shares and mutual funds of other companies offshore have benefited due to the clause in the tax legislature that clearly mentions that tax will not be charged on capital gains originating from foreign sources. This helps save capital gains tax worth of millions of dollars. The same tactic is also being used by private individuals or corporations that have inherited property and want to save inheritance tax on it. Offshore Company Incorporation is known for its tendency to ease the sale of certain kinds of assets. Property can be owned by the company and during its transfer reduction in the cost of property purchase can be enabled.
The funds collected by offshore companies are legally allowed to be invested anywhere else in the world. In most cases, offshore companies keep these funds in the form of bank deposits and pay taxes and capital gains, which are kept gross. This can be possible because of the typically less invasive nature of offshore jurisdiction. This gives rise to an unrestrained Free Enterprise. Apart from tax mitigation, a great amount of privacy is also possible by Offshore Company Incorporation for persons that have a high net-worth and want to avoid unnecessary publicity and professional fee. Nowadays, many such people own property and other assets through offshore companies. Many of these offshore jurisdictions allow great privacy by agreeing on not publishing accounting records and the names and details of shareholders.
While there are many legitimate uses of Offshore Company Incorporation, such as asset protection, tax avoidance, captive insurance, succession planning, non-criminal confidentiality and protection of intellectual property; there are also many illegal practical examples of this technique. Money laundering, financing terrorism, tax evasion, fraud, irregular trading practices and protection from creditors are all examples of illegitimate uses of Offshore Company Incorporation. There are strict laws against such practices that exist in local or offshore jurisdictions.
Thus, Offshore Company Incorporation is a sensitive issue that can become illegal with the slightest amount of manipulation or carelessness. It is important that individuals or companies that plan to use this technique for legitimate reasons choose the best firm of professional advisory to work with. Paul Hype Page & Co. is a certified public accounting firm that has several years of experience in the field. Testimonials by their previous clients found on their website http://www.paulhypepage.com/ prove that the firm has great expertise in Offshore Company Incorporation and has the ability to delight its clients with excellent service. Visit http://www.paulhypepage.com/international-tax-advisory/ to find out more about International Tax Planning and how the firm can help your business grow.
Paul Hype Page & Co is established in 2008, a Full Practicing Member of Institute of Certified Public Accountants of Singapore (ICPAS) and also registered as a Public Accounting Firm with Accounting and Corporate Regulatory Authority (ACRA).
We offer consultancy services relating to Singapore Company Incorporation, Accounting, Auditing, Taxation, Immigration and related compliance services. Build the Strong Foundation of your Business and start protecting your wealth today.