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Opening an online business based in SG (Not looking for EP)

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zzm9980
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Opening an online business based in SG (Not looking for EP)

Postby zzm9980 » Mon, 16 Dec 2013 11:08 am

I apologize if these question sound naive, but I've just begun the very initial steps of exploring this and have little clue on the business side. I'm not at the point yet I want to pay a lot of money to get advice from 'professionals', so please bear with me.

Some friends and I have an idea for an online service. This business would be subscription based, and sell no physical product. It could have customers/users around the world. Our immediate needs for this would need to accept payments, and that we need to have a bank account. To accept payments we need to show a 'Business License' so we'd have to form a legit entity.

Now, we're not looking to try and get EPs or EntrePasses out of this. All of the people involved in the business very likely won't even be living in Singapore. The only reason I'm considering Singapore is:
1) Convenient online banking
2) Pre-conceived notions of being 'business friendly' and 'low tax' (assuming we get to the point where low tax matters)
3) Some semblance of privacy around our financials.
4) A key would be to accept AliPay (China) payments. Singapore and China don't have an antagonistic relationship, but the service we may provide probably isn't something PRC would be keen to promote per say, so a Singapore based business may have an easier time getting approval for this.

Again, sorry for sounding naive. Theres probably a lot of research I need to do on my own, or things I haven't thought about. I'll gladly take constructive criticism on things I should read, but please give me a direction, not just "go google" as I've done that and have a hard time finding anything that's not from a shady firm trying to just help me dodge taxes (not our purpose).

Thanks

ComingSoon
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Corporate Residency

Postby ComingSoon » Mon, 16 Dec 2013 1:35 pm

One thing that is easy to overlook when picking a residency for your corporation is the tax residency of the shareholders or directors. Every country has very different rules and regulations regarding overseas holdings, and how they are treated. In some cases the fact that the corporation is resident in Singapore will have very little material value for the director or shareholder. A few countries may even view a 17% tax rate as a 'tax haven' country and treat profits in Singapore as being also subject to local taxes.

In some cases companies can become 'see through' if no actual work is being done in the country of incorporation. If you are going to use Singapore as a jurisdiction then you should make sure economic value is created in Singapore.

Finally, if you have US directors, keep in mind that FATCA regulations could (theoretically) make your ongoing reporting requirements a nightmare.

All the best with your new venture!

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Strong Eagle
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Postby Strong Eagle » Tue, 17 Dec 2013 3:46 am

Here is my take on your question.

First, you will need to have a “normally resident”

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zzm9980
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Postby zzm9980 » Tue, 17 Dec 2013 9:07 am

Hi Guys,

Thank you both for your input. It's very valuable and has given me a lot to think about at this early stage.

The choice of Singapore as an option (we're considering a few places) is born of the following:

1) The primary involved people are from a few places: the US, the UK, Vietnam, and Indonesia. The service we'd build would need no physical presence and wouldn't even really have single 'logical' presence in any one country.

2) The US may seem a logical choice, and in many other cases it would be, but right now we're exploring certain privacy and data retention aspects which may give our company a negative perception if based in the US. (Thank you Mr Snowden and the NSA! j/k). I know realistically that if the US Gov wants something it doesn't matter if our corporate office is on K Street in DC or a shanty somewhere in Belize, they'll get it. But customer perception in this case matters.

3) Given the "typical" non-US options that come up from simple Google searches, Singapore seemed a logical choice given I'm currently here. Also, back to perception, we assumed (perhaps rightly or wrongly) a Singapore based business would look better than Belize, Seychelles, or something like that for some things we'd need to do. In particular as mentioned, getting a merchant account with Alipay.

4) I'm not as worried about the money part in regards to personal income tax at this point (that will be a good problem to have when we get there). Initially (first year or two) I'm sure any profit would go right back into the business. No one is looking for an early pay-check. That said, I have a PEP.


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