Looking Into Incorporating in India and Singapore
From the looks of it, not even the global pandemic could stop the economic boom as manifested in the influx that saw not a few entrepreneurs Incorporating in India and Singapore. Places considered to start a business are these two Asian countries.
As economic experts have said in web-based business news articles, these two countries are generally considered two top hosts for foreign companies to start, expand, or incorporate.
Speaking of incorporation, India and Singapore neither share similar economic policies nor economic stability. Singapore, for one, is far more well-off than India. Surprisingly, India managed to attract more foreign investors to do business in its country by easing government policy for business formation.
Incorporating in India and Singapore is a tough decision for foreign investors who are made to choose based on the merits that each country has.
Singapore Over India
Among the top reasons why many foreign investors pick Singapore over India is the fact that the former has been rated number one by no less than the World Bank insofar as ease of doing business. Relatedly, Singapore is the third richest country, based on a report which was published in the prestigious Forbes Magazine.
Moreover, Singapore is also ranked third most globalized economy from a pool of 60 progressive countries.
Other attributes used to attract investors to incorporate their business in Singapore include its political stability, labor force, and quality of life. It also offers corporate tax rates of 8.5 percent up to $300,000 in profits and a flat 17 percent beyond $300,000. Singapore also waives taxes covering dividend or capital gains; estate, death, and inheritance; and personal tax rates for revenues below $320,000.
India Over Singapore
India is the home of no less than 1.35 billion people and that figure does not even include foreign nationals who have opted to stay there for good.
With that much population, a thinking businessman would always see it as a potential market for whatever product or services he or she intends to sell in India.
India also boasts of its simplified incorporation requirements, especially for private limited companies, where there is a guarantee of a distinctly favorable business structure.
In fact, nine of 10 companies are registered as private limited companies–enjoying perks and incentives under the Companies Act of 2013 providing a simplified registration procedure.
More than the simplified registration, India’s Ministry of Corporate Affairs (MCA) also imposes a minimal paid-up Capital for private limited companies.
As if all the laxities in place are not enough, the Ministry of Corporate Affairs also boasts of a government business policy seen to entice more investors to do business in India.
One of the top reasons why foreign companies would want to incorporate and do business in India is the Amended Companies Act of 2015 eliminating minimum paid-up capital requirements to incorporate a private limited company.
Factors to Consider in Incorporating in India and Singapore
Web sources made some comparisons between these two countries in Asia. The comparison begs the question: Which is the better country for entrepreneurs to start a business?
Incorporating in India
India may have been embarking on a restrictive policy with regards to 100% foreign ownership and foreign shareholding. Only valid conditions allowed in India’s full company ownership. India imposes caps on investment limits and requires businesses to secure prior approval. Among the businesses that India opted to impose strict measures include gambling, lottery business, atomic energy, and retail trading.
Incorporating in Singapore
Singapore’s economic policy is far more liberal insofar as foreign ownership and 100-percent foreign shareholding. In fact, businessmen eyeing to put up business in Singapore may do so, without actually worrying about laws that would restrict them from fully owning the business. There isn’t even a need for prior approval to own and control company shares–regardless of the type of business, they’re in and for as long as products and services are not unlawful.
Minimum Statutory Requirements
Like other countries, India and Singapore maintain rules on the company structure, incorporators, and financial equivalent of its investments.
India’s Statutory Requirements
– The Ministry of Corporate Affairs requires a local registered address for the business; at least two directors regardless of their nationality; Director Identification Number; Digital Signature Certificate; two to 50 shareholders; and minimum paid-up capital of INR 100,000.
Singapore’s Statutory Requirements
The Singaporean government also requires a local registered business address; at least one local resident director; one to 50 shareholders; a local resident acting as company secretary; and a minimum paid-up capital amounting to SGD 1.00.
How to Incorporate in India and Singapore
Steps in incorporating in India and Singapore seem critical in deciding which country should be chosen to do business.
India’s Procedural Steps
India embarks on eight steps seen completed within three to four months.
- The need to secure government approval in setting up a company in the country
- Director’s Identification Number for Application
- Certificate for Director’s Digital Signature Application.
- Application for a business name at the Registrar of Companies
- Registrar of Companies filing of incorporation documents and issues the Certificate of Incorporation in two weeks.
- Registration with Tax Department
- Secure business license/ permit
- Secure a company bank account
Singapore’s Procedural Steps
Unlike India, entrepreneurs need not bear the agony of multi-layers of bureaucracy. Setting up business in Singapore requires five simple steps within an expected completion in two weeks.
- Application for a business name
- Company Registrar’s filing of Incorporation documents, issue’s confirmation of submitted documents in a few hours.
- Registration with the Tax Department
- Secure business license or permit
- Open a corporate bank account
Incorporating Made Easy
Amid a simplified process of incorporating in India and Singapore, complexities make it difficult, if not totally annoying, for serious businessmen to bear. The truth is that businesses don’t have to carry the burden if only they could get help from the right people to do the job.
Speaking of the right people, 3E Accounting is offering the best India incorporation package. Contact us for more information.