You do not have the foreign income provisions assessed correctly. First, the exemption income must fall into one or more of these three categories:DayTrader wrote:Hello
I'm currently UK resident/domiciled for tax purposes and looking at setting up an offshore Singapore company to reduce my tax liability in a business I am about to start up.
In addition to the required local company secretary there will be a Singapore-based nominee director to fulfil the local director requirement. I will be the only other director and sole shareholder, but will be non-resident (for the time being). The company bank account will be outside Singapore and no money will be remitted into Singapore.
As I understand it, any company profits derived from outside Singapore and not remitted into Singapore are tax exempt.
I will be buying a commodity in Indonesia, and selling it to buyers in Indonesia, Philippines and other countries in SE Asia, outside Singapore. Can one of you knowledgable fellows confirm that in this case there would be no company tax payable in Singapore?
This is what I envisage my situation will be. As you rightly mentioned there are some very generous incentives for new companies that mean an effective tax rate for the first three years of around 5% on the first S$300,000, then 8.4% in subsequent years. At first glance this looks to be the best route for me and far, far better than being taxed out of existence as I currently am in the UK.Strong Eagle wrote:Now, if you were not planning on opening an Indonesian company, but merely planning to have your company contact Indonesian vendors to supply you the product, and other vendors to handle logistics, shipping, and delivery, then you don't have foreign sourced income at all, since the activities to order and ship are being conducted by the Singapore company. Therefore, income is locally taxable.
DayTrader wrote:As you rightly mentioned there are some very generous incentives for new companies that mean an effective tax rate for the first three years of around 5% on the first S$300,000, then 8.4% in subsequent years.
You should read the various threads about starting a company and a LOC... they are equally applicable.DayTrader wrote:Exactly, that it will.
The other major decision I will have to make is whether to apply for an Employment Pass when setting up the company, or to get the company up and running successfully first to establish a favourable track record.
Presumably, if the company is operating smoothly, then an application for an Employment Pass would be viewed more favourably?
WOW! You're right, I thought it was S$300k revenue!Strong Eagle wrote:And that's $300K of PROFIT. You can have a much larger revenue, pay yourself well, and not pay tax.
Even if you pay $0 tax in Singapore because of the exemption, you'll still have to pay tax in the UK if you are resident there and receive income / profits from overseas. The UK will likely consider the fact that you are living in the UK and not paying a tax elsewhere and quickly conclude you should be paying it there. I'd look into this in detail before going the offshore entity route.DayTrader wrote:WOW! You're right, I thought it was S$300k revenue!Strong Eagle wrote:And that's $300K of PROFIT. You can have a much larger revenue, pay yourself well, and not pay tax.
That really does seal the deal as it were.
I'll look at the threads you mentioned first thing in the morning. Thanks.
Understood. I will only be spending 6-8 weeks a year in the UK, but will still be UK "domiciled" rather than "resident" and subject to their taxes unless I can prove I am living abroad.ComingSoon wrote:Even if you pay $0 tax in Singapore because of the exemption, you'll still have to pay tax in the UK if you are resident there and receive income / profits from overseas.
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