Today we explain you about the Company Registration in India and Singapore. So Lets Start the Comparison between India and Singapore which is the best country to start a Business. we never compromise India and but Singapore is had own advantages and India has owned advantages so lets understanding the comparison and timeline or taxation and other advantages between both of the countries.
Advantages of India and Singapore Company Registration
So, first of all, explain you some advantages for the Singapore Country:-
- Singapore is rated #1 in the world by World Bank for ease of doing business
- Singapore is ranked the third wealthiest nation in the world by Forbes magazine.
- Singapore has been ranked as the third most globalized economy among 60 of the world’s largest economies in the recently released Ernst and Young 2011 Globalization Index
- Singapore is rated #1 as the most politically stable country in Asia
- Singapore is rated #1 as the best labor force in the world
- Singapore is rated #1 in Asia for quality of life
- Corporate tax rates are about 8.5% up to $300K profits and a flat 17% above that
- There are no dividend or capital gains taxes in Singapore
- There is no estate/death/inheritance tax in Singapore
- Personal tax rates start at 0% and max out at 20% above $320K
Now Explain a Full Comparison Between India and Singapore Company Registration and Doing the Business.
Foreign Ownership
| SINGAPORE | INDIA |
|---|---|
| Liberal policy regarding foreign ownership 100% foreign shareholding allowed in all sectors. No prior approval is required from authorities No restrictions on permitted fields of business activity for foreigners | Restrictive policy regarding foreign ownership 100% foreign shareholding allowed only in certain sectors.Certain sectors are subject to caps on investment limits and require prior approval from the Indian government
Certain sectors prohibit foreign investment. Examples: gambling, lottery business, atomic energy and retail trading. |
Minimum Statutory Requirements
| SINGAPORE | INDIA |
|---|---|
| A local registered address | A local registered address |
| At least one local resident director (Singapore citizen, PR or foreigner holding an Employment Pass, Entrepreneur Pass or Dependant Pass) | At least two directors (Indian citizens or foreigners) who need not be local residents. All directors must obtain a ‘Director Identification Number’ and ‘Digital Signature Certificate’ |
| A minimum of one and maximum of 50 shareholders | A minimum of two and maximum of 50 shareholders |
| A local resident and qualified company secretary | – |
| Minimum paid up capital of SGD 1.00 | Minimum paid up capital of INR 100,000 |
Incorporation Procedure
| SINGAPORE | INDIA |
|---|---|
| Step 1: Company name approval with the Company Registrar.Step 2: File incorporation documents with Company Registrar and obtain incorporation confirmation, just within a few hours of documents submission.Step 3: Register with the tax department.
Step 4: Obtain business licenses or permits, if required. Step 5: Open a corporate bank account. |
Step 1: If applicable, seek government approval for setting up a company in India.
Step 2: Apply to the Central Government for a ‘Director Identification Number’. Step 3: Apply to a central licensing authority for a ‘Digital Signature Certificate for Directors’. Step 4: Company name approval with the Registrar of Companies. Step 5: File incorporation documents with Registrar of Companies. The Registrar will issue the Certificate of Incorporation within 1-2 weeks. Step 6: Register with the tax department. Step 8: Obtain business licenses or permits, if required. Step 9 : Open a corporate bank account |
Incorporation Time-line
| PROCESS | SINGAPORE | INDIA |
|---|---|---|
| Company Name Approval | 1 hour | 5-10 days |
| Company Incorporation Certificate | 1 day | 7-14 days |
| Business Licenses | 7-14 days | 30 days |
| Director Identification Number | NA | 7 days |
| Digital Signature Certificate for Directors | NA | 7 days |
| Government approvals for foreign investment | NA | 30 days |
Annual Filing Requirements
| SINGAPORE | INDIA |
|---|---|
| Annual returns + audited annual accounts must be filed with Companies Registrar Small companies with an annual turnover of < SGD 5 million are exempt from the audit requirement | Annual returns + audited annual accounts must be filed with Companies Registrar No company is exempt from the audit requirement |
| Tax returns + audited accounts must be filed with the tax department annually Small companies with an annual turnover of < SGD 5 million are exempt from the audit requirement | Tax returns + audited accounts must be filed with the tax department annually Companies with an annual turnover of < INR 4 million are exempt from the tax audit requirement |
| Not all companies are required to appoint an auditor. Only companies with an annual turnover of SGD 5 million and above need to appoint an auditor | Every company, regardless of turnover, must appoint a qualified auditor |
Corporate Taxes
| SINGAPORE | INDIA | |
|---|---|---|
| Corporate Tax Rate | 8.5% for profits up to S$300K and a flat 17% for profits above S$300K | 30.9% for taxable income up to INR 10 million and 33.9% for taxable income above INR 10 million |
| Dividend Distribution Tax on companies declaring dividends | NA | 16.995% |
| Capital Gains Tax | Nil | 15% – short term capital assets 10%-20% – long term capital assets |
| GST/VAT/Service Tax | GST – Indirect tax on sale of goods and services – @ 7% | Service Tax – Indirect tax on sale of services – @ 10.3%VAT – State level indirect tax on sale of goods within a state – ranging from 1%, 4%, 12.5% to 20% depending on the type of goods.CST – Central level indirect tax on inter-state sale of goods – @ 2% |
| Taxation of foreign sourced income | Singapore resident companies are taxed on world-wide profits only when remitted to Singapore | Indian resident companies are taxed on world-wide profits, whether or not remitted to India |
So This is Comparison Chart which is prepared by Guidemesingapouredotcom and Give Overview India and Singapore Business Advantages.
So as Summery Main 4 Reason Why Singapore is the best ?
Understanding the India-Singapore DTA
Taxation on Dividends
Dividends distributed by the Indian Subsidiary to the Singapore Holding is not subjected to withholding tax in India. But India does levy a dividend distribution tax at 16.22%.
If qualifying conditions are met, the dividend received from the Indian Subsidiary can be exempted from tax under Singapore’s foreign-sourced income exemption scheme. This exemption apply only when the headline corporate tax rate in the foreign country from which the income (which is India in this case) is received is at least 15%, and the income had already been subjected to tax in that particular country.
Taxation on Interest Income
According to the DTA, the interest income is taxed at a rate of 15% in the country in which the income arises. A similar tax may be levied in the recipient country as well.
Taxation on Royalties and Fees for Technical Services
Similar provision to the tax on interest income, though the rate is fixed at 10% only.
Avoiding Double Taxation
If India sourced income of a Singapore company is subjected to taxation twice (once in India and then again in Singapore on remittance), then the Singapore company can claim relief under the Foreign Tax Credit (FTC) scheme, which allows the company to claim a credit for the tax paid in India against the Singapore tax that is payable on the same income. The claim is called Double Tax Relief (DTR).