Dans cet article nous revenons sur les étapes de la création d’une entreprise à Singapour, les éléments clés à savoir et des conseils pour la structuration de la société.

Les avantages d’ouvrir une entreprise à Singapour

L’ouverture d’une entreprise à Singapour est possible et facile pour tous les types de profils : Expatriés résidents sur place, étranger vivant en dehors de Singapour sans intention d’y vivre, entrepreneurs désirant commencer une start-up, etc.

Les règles sont souples et permettent d’utiliser l’entreprise pour :

• Débuter une activité d’auto-entrepreneur
• Investir à Singapour et à l’étranger
• Limiter son exposition fiscale
• Ouvrir une filiale d’un groupe pour l’Asie ou le marché Singapourien
• Facturer des clients à Singapour et à l’étranger
• Lancer une activité freelance
• Obtenir un visa et vivre à Singapour avec une famille

Singapour est une destination reconnue pour sa stabilité économique financière et politique. Cela en fait une destination propice pour investir et planifier une activité commerciale sur le temps long.

De plus, Singapour est une place financière de rang mondiale dont l’appartenance au réseau FATF (Financial Action Task Force) reconnait son implication contre le blanchiment d’argent et le financement du terrorisme.

Enfin, la cité état est l’un des pays les plus prospères avec un niveau de vie élevé et une digitalisation de pointe qui permet de limiter les délais administratifs et imprévus.

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À propos de MyBusiness in Asia – MBiA

MBiA est un cabinet de conseil multidisciplinaire fournissant des services en comptabilité, fiscalité et secrétariat d’entreprise pour les entrepreneurs, start-ups et PME couvrant tous les besoins d’entreprises.

Nos experts vous aident à comprendre les aspects et enjeux des affaires commerciales en Asie, et en français si besoin.
N’hésitez pas à nous contacter pour en savoir plus.

Quels sont les critères pour créer une société à Singapour ?

Il est relativement aisé et rapide d’ouvrir une société à Singapour. Pour rappel, toute société à une structure qui implique :

• Un ou plusieurs actionnaires (ce sont les personnes qui détiennent les droits de l’entreprise). Les actionnaires peuvent être des individus ou d’autres entreprises
• Un ou plusieurs directeurs. Le directeur est responsable de l’entreprise (son développement, sa rentabilité, sa gestion) mais aussi la conformité et la liaison avec les actionnaires.
• Un capital social qui définit les parts des actionnaires et permet d’avancer certaines des dépenses l’entreprise. Le capital social correspond généralement une somme d’argent versée sur le compte bancaire de l’entreprise.
• Un secteur d’activité définit. Cette information permet de déterminer le type de produits ou services offerts par l’entreprise, et, plus tard si cela nécessite des permis ou licences.
• Les autres informations de la société. Cela comprend la date de fin d’exercice financier, qui permet annuellement d’obtenir une image de la situation financière de l’entreprise (souvent le 31 décembre). Mais aussi son adresse, qui permet son identification géographique et où ses documents et son courrier est adressé.

Pour créer une société, tout individu doit :

• Être âgé de 18 ans ou plus,
• Avoir pleine capacité légale,
• Ne pas être disqualifié légalement pour diriger une société

En remplissant ces critères, la majorité des individus peuvent cumuler les fonctions d’actionnaire et de directeur de leur société.

Il est possible d’ouvrir une société à Singapour depuis l’étranger, ou en étant déjà résident sur place !

Par ailleurs, dans la plupart des secteurs, les actionnaires étrangers peuvent détenir 100% des actions de la société Singapourienne.

Les étapes pour créer une entreprise à Singapour

Créer une entreprise est un processus simple et quasiment entièrement digitalisé à Singapour. Cela signifie qu’il n’est pas nécessaire d’être présent sur place entamer et compléter l’ouverture de la société.

1. Partager les informations de l’entreprise et le processus de diligence

Choisir de créer une entreprise c’est d’abord lui choisir un nom, unique, et une activité. Cette étape simple est rapidement remplie. Elle coute SGD 15.

Le processus de diligence est nécessaire pour toutes les entreprises. Il consiste collecter les informations personnelles de tous les directeurs et actionnaires :

• Preuve d’identité
• Preuve d’adresse récente
• Coordonnés de contact (à minima, une adresse email et un numéro de téléphone)
• Informations de la société et de son représentant si une autre entreprise est actionnaire

Cette étape est légalement obligatoire et permet de contrôler la véritable identité des personnes impliquées dans la détention et la gestion de la société. Ces informations ne sont pas partagées

2. Ouverture administrative de la société

Pour ouvrir une entreprise, un représentant ou une personne détenant un SingPass (un identifiant numérique pour tous les résident singapouriens) peut déposer (virtuellement) les documents nécessaires auprès de l’ACRA (Accounting and Corporate Regulatory Authority).

En réalité, un seul document est demandé : la Constitution de la société. Ce document est important car il définit les règles de fonctionnement et de gouvernance, le capital de l’entreprise et son affectation, etc.

D’autres informations sont aussi à fournir au préalable pour l’enregistrement avec l’ACRA :

• Nom de l’entreprise
• Description de l’activité de l’entreprise
• Montant du capital social de l’entreprise : le minimum de capital est de SGD 1 à Singapour.
• Informations sur les actionnaires et coordonnées de contact
• Informations sur les directeurs et coordonnées de contact
• Adresse de l’entreprise
• Informations sur le secrétaire de l’entreprise (Voir l’encadrer plus bas)
• Date de fin de l’exercice

Le cout de la création de la société à Singapour est de SGD 300. La création administrative de la société prend en général 1 à 2 jours ouvrés.

Le secrétaire d’entreprise est une fonction obligatoire pour chaque entreprise et correspond à un professionnel qualifié et chargé de la conformité légale des entreprises. Ses fonctions impliquent la tenue des registres, l’organisation des réunions des actionnaires et des directeurs, la communication avec les organismes administratifs de Singapour et le rappel des obligations légales telle que la date de dépôt de la liasse fiscale et de l’assemblée générale annuelle.

Il est aussi possible de sous-traiter ces services de secrétaire d’entreprise à une société spécialisée dans la gestion administrative et comptable tel que MyBusiness in Asia.

Le Secrétaire d’entreprise ou Company Secretary à Singapour

Pourtant certains autres documents sont aussi régulièrement demandés. En effet lorsqu’un prestataire de service rempli les tâches administratives, ce dernier produira les documents internes à l’entreprise pour s’assurer de sa conformité :

• Résolutions des directeurs
• Allocation des actions
• Nomination comme représentant agent fiscal
• Registre des bénéficiaires effectifs de l’entreprise
• Formulaire 45 et 45B
• Etc.

Enfin, des licences peuvent être nécessaires selon le secteur d’activité. Créer une entreprise à Singapour ne nécessite souvent pas de license ou permis, particulièrement dans le secteur des services.

3. Ouverture du compte de l’entreprise

Toute entreprise requiert des moyens de paiement, pour réaliser un profit. Le compte de l’entreprise permet de payer les fournisseurs et recevoir les fonds des clients, mais aussi régler les salaires si l’entreprise a des employés.

Une entreprise nécessite donc l’ouverture d’un compte qui permet les paiements et la gestion de la trésorerie. À Singapour, il existe deux options non exclusives pour ce qui est du compte de l’entreprise, le compte bancaire classique et le compte en ligne.

Ouvrir un compte bancaire

C’est la solution, la plus classique. Toutefois, ouvrir un compte auprès d’une banque traditionnelle comporte des avantages et inconvénients.

Avantages d’un compte bancaire d’entreprise à Singapour :

• Possibilité d’accès aux agences du réseau bancaire
• Avoir une carte de crédit d’entreprise
• Divers prêts disponibles, pour l’investissement et la trésorerie
• Lignes de crédits, avances sur factures
• Solutions d’investissements et de rémunérations des comptes
• Fiabilité réglementaire élevée

Désavantages d’un compte bancaire d’entreprise à Singapour :

• Procédure de diligence étendue : pour les étrangers et particulièrement les non-résidents, ces procédures d’ouverture de compte peuvent durer de 3 à 6 mois et donc retarder le démarrage de l’entreprise.
• Frais divers et conséquents : les banques traditionnelles de Singapour peuvent facturer une multitude de frais, pour l’ouverture de compte, la tenue de compte, virement internationaux, frais de changes, etc.
• Processus partiellement digitalisés et optimisés : Il est fréquent pour les banques locales de recourir à des processus couteux et nombreux documents pour des changements du compte de l’entreprise comme l’adresse, ou les signataires.
• Minimums de transactions et apports : certaines banques requièrent de maintenir un capital minimum sur le compte et/ ou d’avoir un minimum de transactions en volume.

Les principales banques à Singapour pour les comptes d’entreprises sont : DBS, UOB and OCBC.

Ouvrir un compte en ligne

Pour de nombreuses entreprises Singapouriennes, le compte en ligne est devenu une solution complémentaire au compte bancaire ou, une solution complémentaire. En effet, rien n’empêche une entreprise d’avoir un compte en ligne uniquement, ou à l’inverse, plusieurs comptes.

Le compte en ligne n’est pas un compte bancaire, ce qui signifie qu’il ne permet pas d’accéder aux facilités de crédits et de financement pour les entreprises. Toutefois les comptes en lignes sont régulés par les autorités monétaires locales au travers de licences restrictives et protectrices pour les utilisateurs.

Avantages d’un compte en ligne à Singapour :

• Entièrement accessible et gérable en ligne, depuis n’importe quel pays
• Processus modernes et digitalisés : le temps moyen d’ouverture d’un compte en ligne d’entreprise est de 3 à 7 jours contre 3 à 6 mois pour les banques.
• Plateforme en ligne simple d’utilisation
• Absence de frais d’ouverture et tenue de compte : si le compte n’est pas utilisé, aucun frais n’est facturé.
• Frais de paiements et de conversions internationaux souvent moins chers
• Fonctionnalités uniques comme les comptes internationaux : les comptes internationaux permettent de recevoir instantanément et sans frais des paiements dans des dizaines de pays
• Structure et fonctionnalités simples
• Organisme contrôlé et régulé par les autorités monétaires et dépôts assurés et couverts par une banque dépositaire
• Cartes virtuelles de débit uniquement

Désavantages d’un compte en ligne à Singapour :

• Absence d’offre de crédit et de financement pour les entreprises : les paiements sont bloqués si le compte n’est pas suffisamment approvisionné
• Moins de fonctionnalité qu’avec les banques traditionnelles : pas de dépôt d’espèces, pas de carnet de chèques, coopération limitée avec les agences gouvernementales, etc.
• Image de marques non établis et potentielle incompréhensions et réticences des clients
• Plus propice aux erreurs de développements et de réseau

En conclusion, l’ouverture de compte en banque et compte en ligne sont complémentaires et doivent correspondre aux besoins de chaque entreprise.

Une fois le compte ouvert, le capital social de l’entreprise peut y être transféré.

Les autres éléments à savoir pour créer une entreprise à Singapour

La création d’une société à Singapour comprend d’autres aspects critiques à prendre en compte.

1. Visa et travail à Singapour

Il est possible pour tout étranger de travailler à Singapour sous certaines conditions. Les règles édictées par le Ministère du Travail (MOM) sont relativement claires sur ces points. Plusieurs visas existent pour permettre de créer une société.

• Employment Pass (EP) : C’est le visa le plus classique qui par défaut ne permet pas de créer sa propre entreprise. Toutefois des exceptions existent. Ce visa est destiné aux profils à haut salaires et qualifications. Ce sont en effet ces 2 critères qui détermineront l’éligibilité pour le Visa. Il est recommandé d’avoir au moins un diplôme de licence ou équivalent et un salaire situé entre SGD 6,000 et SGD 12,000 par mois (selon le niveau d’expérience).
• ONE Pass : C’est le visa le plus permissif qui permet de combiner plusieurs activités salariales et entrepreneuriales. Pourtant le critère principal est d’avoir un salaire d’au moins SGD 30,000 par mois.
• Entrepreneur Pass (EntrePass) : Ce visa est destiné aux entrepreneurs aguerris pouvant démontrer d’une précédente expérience significative en startup.
• Dependant Pass (DP) : Pour un conjoint d’une personne travaillant à Singapour, ce visa permet sous certaines conditions (actionnariat de 30% ou plus de l’entreprise et position de directeur) d’ouvrir une entreprise et d’y travailler. Les DP sont des visas qui sont liés à celui du conjoint travaillant déjà à Singapour.

Note importante : Pour les entrepreneurs souhaitant obtenir un visa dans l’entreprise nouvellement créée, le MOM peut demander une preuve de capacité financière de l’entreprise. Cela signifie que lors de la création de la société un capital social plus important est recommandé : en règle générale, SGD 50,000 ou l’équivalent de 6 mois de salaire.

2. Fiscalité des entreprises et impôt sur les sociétés à Singapour

L’imposition sur les sociétés à Singapour est de 17% et est calculé sur le résultat de l’entreprise, c’est-à-dire, sur le profit réalisé par l’entreprise sur l’année fiscale précédente. Pourtant les entreprises bénéficient d’abord d’une réduction d’impôts.

L’Exemption Fiscale Partielle (Partial Tax Exemption Scheme) 

Toutes les entreprises bénéficient d’une réduction de 75% de l’assiette d’imposition sur les sociétés sur les premiers SGD 10,000 de revenus imposables. Puis d’une réduction de 50% de l’assiette d’imposition sur les SGD 190,000 suivants de revenus. Donc, sur les premiers SGD 200,000 de profits, l’impôt effectif est de ~8.3% au lieu de 17%.

Retenue sur la distribution de dividendes (Withholding Tax on Dividends)

Les dividendes peuvent être distribuées aux actionnaires si l’entreprise a réalisée des bénéfices. Les dividendes peuvent être distribuées librement à des actionnaires à Singapour ou à l’étranger. Il n’y a pas de taxe et de retenue sur les dividendes.

Taxe sur la Valeur Ajoutée (Goods and Services Tax – GST)

Singapour a une Taxe sur la Valeur Ajoutée (GST) de 8% en 2023 et dont le taux augmentera à 9% à partir du 1^er Janvier 2024. L’enregistrement à la collection et remboursement de la GST par les entreprises dépend du niveau de revenus. Les entreprises dont les revenus seront/sont de SGD 1 million ou plus pour la prochaine période fiscale doivent souscrire à la GST. Pour les entreprises dont les revenus sont inférieurs à SGD 1 million, l’enregistrement à la GST est seulement facultatif.

3. Points importants pour la gestion de l’entreprise à Singapour

Ouvrir une société à Singapour est administrativement facile mais est aussi lié à quelques obligations. Pour chacune d’elles, un cabinet d’expertise comptable et de services aux entreprises tel MyBusiness in Asia peut vous assister.

• Directeur Résident : Toute entreprise à Singapour doit avoir au moins un de ses directeurs résidents à Singapour. Le directeur résident peut être de nationalité étrangère ou Singapourienne.
  • Le directeur résident peut être un étranger avec un Employment Pass, Dependant Pass (avec Letter of Consent – LOC), avec un ONE Pass ou un EntrePass.
  • Si le directeur ne peut résider à Singapour, il est possible de recourir aux services d’un directeur désigné (nominee director).
• Secrétaire d’entreprise : Comme mentionné plus haut, toute entreprise doit assigner un secrétaire d’entreprise dont les fonctions incluent la vérification et le rappel des obligations administratives locales. Cette fonction peut être occupée par un employé de prestataire de services.
• Audit des comptes de l’entreprise : Par défaut de nombreuses entreprises sont exemptées d’audit. En effet, les entreprises privées (avec moins de 50 investisseurs et dont les actions ne sont pas librement disponibles à la vente) si elles satisfont au moins 2 des 3 critères suivants :
  • Revenus annuels de SGD 10 millions ou moins ;
  • Total des actifs de SGD 10 millions ou moins ;
  • Nombre d’employés de 50 ou moins.

À noter que ces critères doivent êtres satisfaits à l’échelle des comptes consolidés du groupe si le cas se présente.

Conclusion

Créer une entreprise à Singapour est donc plus facile et rapide que dans de nombreux pays. Il faut en effet seulement quelques jours pour ouvrir une société.

Les étrangers non-résidents peuvent détenir entièrement la société sans se déplacer à Singapour.

Les opportunités économiques et entrepreneuriales en font le lieu idéal pour développer une activité commerciale en Asie.

Pour en savoir plus sur Singapour et sur les autres marchés en Asie, vous pouvez lire nos autres publications:

• Trends and View of the Startup Environment in Hong Kong
• Understand how the ONE Pass and how to apply for this special Pass in Singapore.
• Apply for an EP in Singapore and understand the new COMPASS framework.
• Learn everything about the Stamp Duty for shares and calculator in Singapore
• Making Sense of the Dividends Taxation and Regulations in Singapore

The post Créer une Entreprise à Singapour en 3 Étapes (2023) appeared first on MyBusiness in Asia.

This issue covers the critical decision factors in selecting where to start your tech startup in Asia. This includes:

• Incorporation and Set Up Requirements
• Tax Rules
• Immigration and Visa
• Costs and Expenses
• Environmental Risk

You can view the document or download it with the links below!

MBiA – MyBusiness in Asia is a multi-disciplinary advisory firm providing accounting, tax and corporate secretarial services to entrepreneurs and corporations for structuring and administrating their affairs.
Our services are fully integrated and digitalized to provide a high-quality and swift response to your needs.

We complement our virtual offerings with established and recognized know-how from experts able to support you. We can assist we insights going beyond our guide of Setting Up Your Tech Startup in Asia.

The post Guide on Setting Up Your Tech Startup in Asia appeared first on MyBusiness in Asia.

In this issue we cover all the information relevant for you to start your company, invest or raise funds in ASEAN. We also highlight the Singaporean start-up ecosystem and explain why it is the most dynamic of the region!

You can view the document or download it with the links below!

MBiA – MyBusiness in Asia is a multi-disciplinary advisory firm providing accounting, tax and corporate secretarial services to entrepreneurs and corporations for structuring and administrating their affairs.
Our services are fully integrated and digitalized to provide a high-quality and swift response to your needs.

We complement our virtual offerings with established and recognized know-how from experts able to support you.

The post Full guide on Investment Structuring and Fund Raising in ASEAN appeared first on MyBusiness in Asia.

STARTING

RBA Services – Malaysia

RBA can help you to start your business in Malaysia.

RBA can assist you with:

• The right choice of Malaysian business entity
• Malaysian company/entity set up
• Bookkeeping and accounting
• Xero accounting services
• Payroll
• Malaysian visa and Malaysian work pass

Any further inquiries, please contact us.

Starting my business in Malaysia

Malaysia provides a vibrant business environment to foreign individuals and companies to conduct business in a strategic location with a developed infrastructure and business friendly Government policies. The procedures to set up in Malaysia are fast and simple.

A foreign parent company has a number of options open to it to conduct business in Malaysia. It can either register a branch of the foreign parent company, incorporate a local Malay company or form a limited liability partnership in Malaysia.

If, however, a foreign company’s only objective is  to conduct research and development, evaluate the Malaysian market, pursue promotion and marketing on behalf of the parent the foreign parent can register with the Malay authorities a representative or regional office to conduct these limited activities. 

Register a representative office in Malaysia

The activity of a representative office is, as the name suggests, an office to represent the foreign parent company (especially in the manufacturing and services sector) to undertake designated functions, including investment research, develop bilateral trade, marketing and promotion of the parent outside Malaysia and research and development in Malaysia. A representative office is not permitted to conduct trade or other commercial activities, enter into contracts on behalf of the parent company or provide services for a fee in Malaysia. It is required to be funded by the parent company from its resources outside of Malaysia.

The procedure to establish a representative office is fast and relatively straightforward. An application with the required supporting documentation must be submitted to the Malaysian Investment Development Authority (MIDA) which will issue authorisation if the legal requirements are met. The process generally takes an average of six weeks and when issued the authorisation is usually valid for two years depending on the merits of the application. There is no requirement for the representative office to be incorporated under the Companies Act 1965.

Employees are generally limited to one expatriate, who is subject to income tax at the usual rates in Malaysia. Application may be made to MIDA for additional work permits for other expat employees, should additional employees be required. 

Register of a Subsidiary or a Branch in Malaysia

A foreign company wishing to establish a place of business to conduct trading and commercial activity directly in Malaysia is required to register a branch office or a subsidiary.

1. Branch Office

A Branch Office does  not  constitute  incorporating  an  entirely  new company  and  does not create a separate legal entity in Malaysia.

It is a form of business operation for a foreign company which is only operating on a short-term basis compared to the incorporation of a local company.

A foreign company is not allowed to register a Branch Office to carry out wholesale and retail  trade  business. All  wholesale  and  retail trade  business  with  foreign interests must operate  through a locally incorporated company.

2. Subsidiary

A foreign company can establish a Sendirian Berhad (private company limited) in Malaysia.

A Sendirian Berhad (aka. Sdn Bhd) may be 100% owned by a foreign parent company.

Generally, a foreign company is required to have minimum issued paid-up capital of at least RM500,000 (approximately USD115,000) before applying for work visas. Certain industries including education, petroleum, banking and finance, tourism, agriculture and certain trades are regulated and cannot be wholly foreign owned.

The registration of a Sdn Bhd is a two stage process. Initial application is made to the Companies Commission Malaysia (CCM) to check the availability of the business name. On making the application for name approval the parent company is required to provide various documentation, including a consent letter and certified copy of the parent’s certificate of incorporation).

When name approval has been granted, application may be made for incorporation. The application is submitted with supporting documentation. The processing time is usually two weeks from the name search of the company to the issuance of the Certificate of Incorporation by the registrar.

The registration fees payable to the CCM are based on the authorized capital (between RM1,000 to RM70,000 – approximately USD230 to USD16,000). 

For  the purpose  of  incorporation,  the  company would require to provide  two  (2) resident directors  and two (2) shareholders (which can be two (2) individuals or two  (2)  corporations  or  an  individual  with  a  corporation).  A  resident  director could be a Malaysian or foreigner who has a residential address in Malaysia.
SSM  will  usually  require  two  (2)  weeks  to  approve  and  issue the Certificate  of Incorporation  (Form  9)  and  the  company  can commence  business  immediately with the Certificate.

A company with paid-up capital of RM2.5 million or less, is taxed at the following rates:

• 20 % on the first RM500,000
• 25% above RM500,000

Registration of a Local Malaysian Company

Incorporation of a local company in Malaysia is subject to the provision of the Companies Act 1965. There are three types of companies that can be incorporated: a company limited by shares, a company limited by guarantee and unlimited company. A company limited by shares is the usual company incorporated for business activity in Malaysia. 

A limited liability company (LLC) is a legal entity, separate and distinct from its shareholders or members. There are two types of limited liability company, namely a company limited by shares (in which the personal liability of member is limited to the nominal value of the shares they hold in the company) and a company limited by guarantee, in which the extent of the personal liability of members is fixed by the amount specified in the Memorandum and Articles of Association. The members respectively undertake to contribute a fixed sum to the liabilities of the Company in the event of its liquidation).
The most common type of company that foreign investors may incorporate for business is a company limited by shares which can be either a private limited company or a public limited company. 

1. Private Limited Company

A private limited company is identified by the words “Sendirian Berhad” or the abbreviation “Sdn Bhd” as part of the Company’s name. A Sdn Bhd will have the following five characteristics:

• A share capital of at least RM2 with at least two subscribers ;
• Memorandum and Articles of Association ;
• No more than 50 members, and
• Minimum two local directors.

A members’ ordinary resolution may be passed by a simple majority (i.e. 51%) of those present and voting at the meeting. A special resolution requires approval of 75% of members who are entitled to vote and voting in person or by proxy at the meeting.

2. Public Limited Company

A public limited company is identified by “Berhad” or its abbreviation “Bhd” as part of the company’s name. A Bhd may offer shares and debentures for public subscription. The shares are freely transferable. A Bhd listed in the Kuala Lumpur Stock Exchange (KLSE) is required to comply with all guidelines and requirements issued by the Securities Commission Malaysia (SC) and the Bursa Malaysia Securities Berhad (Bursa Malaysia). 

Limited Liability Partnership

A limited liability partnership (LLP) is an alternative business vehicle combining the advantages of both a limited liability company and a partnership. An LLP gives to small businesses and professional practices the flexibility and freedom to select the best business structure to suit the needs and requirements of their business model.

An LLP may be formed by two or more individuals or corporate entities. The partners of an LLP enjoy limited personal liability and conduct the business activity through an independent legal entity. Furthermore, there may be certain tax planning advantages, as an LLP is not in Malaysia an assessable entity for tax purposes and its profits are treated as each partner’s personal income and taxed as such.

An LLP may be registered on application to the SSM. The application is required to provide the LLP name, nature of proposed business, the registered address, details of the partners and other relevant documents. The registration fee is RM500 (approx. USD 115).

Unlimited Liability Business 

A sole proprietor and a partner t will be subject to unlimited personal liability of all the debts and liabilities of the business. However, only Malaysian citizens and permanent residents are allowed under the Malaysian laws to operate as a sole proprietor or a partnership.

Formation procedure and business registration in Malaysia

The incorporation of a public limited company in Malaysia follows a similar two stage process to the registration of the registration of a foreign company or branch office in Malaysia. First, name approval must be obtained before submission to the SSM of the following documents (within three months of name approval):

• Memorandum and Articles of Association, translated into English and certified;
• Form 6 (Declaration of Conformity); Form 48A (certificate of the person designated administrator) before incorporation of the company;
• Documents provided by the SSM duly completed;
• Copy of the identity card (or passport for a non-Malaysian) of each director and company secretary.

When approved the SSM will issue the certificate of incorporation. A non-listed company can start business immediately or after the completion of a few additional formalities for a listed company.
The registration fee depends on the value of the company’s share capital from RM 1,000 (for a share capital of RM 100, 000 and less) (approx. USD230 and USD23,000 to RM 70,000 (for a registered capital of RM 100 million or more – approx. USD16,000 and USD 23million).

The incorporation procedure is usually complete in two to three weeks.

The post STARTING – My Business in Malaysia appeared first on MyBusiness in Asia.

STARTING

RBA – Vietnam

RBA has many years experience of advising and assisting entrepreneurs to set up and operate successful  businesses in Vietnam.

RBA has the depth of expertise to advise on:

• The appropriate choice of business entity and jurisdiction for your business and its efficient operation;
• The correct procedure to be followed to incorporate and administer Vietnamese companies
• We have dedicated staff to complete bookkeeping and accounting services in compliance with Vietnamese requirements
• We can provide Xero accounting services
• Through our network of connections were are able to assist and guide you through the process of corporate bank account opening in Vietnam
• Our immigration team has the expertise to advise and assist with the procedure required to obtain Vietnam Employment Visa

Should you require any further information or have any inquiries, please do not hesitate to contact us.

Starting my business in Vietnam

After years of economic reform to a socialist-oriented market economy, private ownership of businesses is allowed in Vietnam.  Since then, Vietnam’s economy has integrated well with the regional (e.g. ASEAN) and global economies, bringing a substantial rise in trade volumes as well as influx of foreign investment.  

Due to the rapid growth of economic activities,   Vietnam has become an appealing option for business setup for many foreign investors.  Currently, business in Vietnam consists mainly of privately-held companies and large state-owned enterprises.  

With the rise of labour costs in countries like China, many foreign multinationals are turning their attention towards Vietnam which boasts a competitive, abundant and well-trained labour force.  Many large US groups are also considering Vietnam as a strategic Asian market and a key link in their global supply chain.

Registration of a Limited Liability Company in Vietnam (Wholly Foreign-Owned)

Foreign investors can incorporate a Limited Liability Company (LLC) with 100% foreign capital (wholly foreign-owned) as an investment vehicle in Vietnam.    

A wholly foreign-owned LLC can be set up with only one member (sole individual or sole foreign corporate member) and up to 50 members.  The management structure of an LLC consists of a Members’ Council, with a director or general director.  An LLC cannot issue company shares to the public or otherwise. The members are responsible for the debts and other liabilities of the LLC to the extent of their capital contributions to the LLC.

In addition, an LLC is required to have at least one legal representative who is the primary representative of the company. The Legal Representative must serve as either the General Director or the Chairman of the Members’ Council and must be resident in Vietnam whether a foreign national or Vietnamese.  

A wholly foreign-owned LLC is generally not allowed to engage in restricted industries such as  i) transportation ii) real estate business iii) mining iv) telecommunication network (establishment, transmission and provision services)   v) publishing and media   vi) education and training and vii) the production of cigarettes. At Rosemont we advise and assist our clients to complete a pre-check on their intended business activities before taking any final decision on setting up their LLC Company to ensure that any potential problems are addressed at an early stage thus saving time and cost.

Registration of a Limited Liability Company (Joint Ventures)

If necessary, a foreign investor can incorporate a Limited Liability Company (LLC) with partial foreign-owned capital, as a joint venture between domestic Vietnamese and foreign investors.

Usually, the joint venture LLC must meet the Government requirement for foreigners to do business in restricted industries.  The percentage of foreign ownership of the LLC is subject to a maximum level, which depends on the business activities and is subject to Government approval.

Joint Venture LLC may also be requested by some foreign investors in order to take advantage of the specialist local knowledge of their Vietnamese partner.

A Joint Venture LLC can be established with a minimum of one foreign member, and one Vietnamese member; in both cases, the member can be an individual or a corporate entity. The number of members cannot exceed 50.  The management structure of a joint venture LLC is the same as for the foreign owned LLC considered above, that is a Members’ Council, with a director or general director. An LLC cannot issue company shares to the public or otherwise. Members are responsible for the debts and other liabilities of the LLC to the extent of their capital contribution to the LLC company. In addition, an LLC is required to have at least one legal representative who is the primary representative of the company. The Legal Representative must serve as either the General Director or as the Chairman of the Members’ Council and must be resident in Vietnam whether a foreign national or Vietnamese.  

Registration of a Joint Stock Company (JSC) in Vietnam

The main difference between Joint Stock Company (JSC) and Limited Liability Company is that the Joint Stock Company can raise funds by issuing company shares and mobilise capital by the sale of its shares. Shareholders of a Joint-Stock Company are liable for the debts of the company limited to the amount of their capital contributions to the company.

A JSC is required to have at least three shareholders, whether individuals or corporate entities and who can be Vietnamese or foreign.  There is no upper limit to the number of shareholders. The founding shareholders must together subscribe to at least twenty per cent (20%) of the ordinary shares that are issued.

The management of a JSC comprises the Management Board (elected at the shareholders’ meeting), the director or general director.  Similar to LLC, JSC is required to have at least one legal representative and if more than one, the chairman and the general director must both be legal representatives.

To qualify for listing on the Vietnam Stock Exchange a company is required to be in the legal form of a Joint Stock Company. 

Registration of a Commercial Branch in Vietnam

A commercial branch is the subsidiary of the foreign parent company, that has been formed in accordance with Vietnamese law.  It is important to note that a commercial branch is not a separate legal entity from its foreign parent company.

The main requirement to establish a Commercial Branch is that the foreign parent company must have operated in its home jurisdiction for at least five years.

The branch is permitted to conduct trading and commercial activities, including executing contracts, earn profit to remit to the parent company in its home jurisdiction as well as opening a bank account in Vietnam.

A commercial branch is not tax-resident in Vietnam. Hence, corporate income tax and the effect of international tax treaties require careful consideration before a decision is taken whether to open a commercial branch or an LLC. 

Registration of a Representative Office in Vietnam

Representative office of a foreign business entity is not constituted as an independent legal entity.  

A representative office has limited rights and is  only permitted to i) conduct market surveys  ii) find business opportunities on behalf of parent company  iii) oversee the  business development of the parent company in Vietnam.

A representative office is not allowed to engage any direct commercial and profitable activities including issuing quotations, invoices and signing contracts in the name of the representative office.  Consequently, this type of business entity is not subjected to Vietnam corporate income tax.   
This form of entity is suitable for foreign investors who are interested in developing business networks with local Vietnamese customers but is not yet prepared to register a Vietnamese company. 

Summary of Registration procedures in Vietnam

The Registration of  a business entity in Vietnam can appear to be time-consuming when compared to developed countries like Singapore and Hong Kong but with our expert guidance investors should expect that it can take up to one month to complete the company registration formalities. The time taken by the government to review the application could be longer depending on the proposed business activities, area of incorporation and the quality of incorporation documents. We will ensure that the incorporation and all supporting documents are prepared in accordance with the relevant regulations and provide all the material information to enable the application to proceed successfully and with the minimum of delay.

General business registration process

We offer an inclusive three stage process, working with you at each stage to ensure an efficient and successful outcome to your business application:

Pre-registration

• We will work with you in the initial consultation and advice on the proposed business activities, the appropriate type of entity to register and the preparation of a detailed business plan.
• We will prepare an itemised list of the documents required to support the business application and provide a due diligence checklist.
• We will prepare the appropriate application form to be filed and obtain the  investment certificate  and Charter of the Company
• Finally, we will provide an analysis and feasibility plan of the proposed project

Registration

• We will complete a detailed review and assemble all application documents to ensure all documents are complete and in correct form to avoid unnecessary delay and rejection by the authorities.
• When complete we will submit all the material documents to relevant government agencies to obtain investment certificate.

 
Post-registration

• We will arrange for the  company seal  to be produced in the correct form and registered with police department
• Prepare and submit application for a tax code at the Municipal Taxation Department. 
• Pay business license tax
• Open the corporate bank account
• Ensure that legal notice of the authorisation is published 
• Complete the labour registration to declare the employment of staff and labour
• Register employees with Social Insurance fund
• Register with a trade union

Required documents for all applications including Commercial Branch and Representative Offices, LLC’s and Joint Stock Companies
Foreign investors have to be prepared to provide the parent company’s (i) certificate of incorporation, (ii) business registration license (if any), (iii) Memorandum and Articles of Association (also known as Company Constitution), (iv) audited financial statements  v) passport of the chief representative or branch head. 

Company Documents have to be translated into Vietnamese and be certified and legalized by the Vietnam Embassy.  We recommend that we are provided with scanned copies of all the company documents for our professional review and screening before incurring what can be the significant costs of translation, certification and legalization. 

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My Business Asia is the best offer to help you for your accounting, corporate services, business set up, company incorporation,corporate services, business structure and tax management, in Vietnam, Thailand, Hong-Kong and Singapore

The post STARTING – My Business in Vietnam appeared first on MyBusiness in Asia.

STARTING

RBA Services – Cambodia

RBA has a depth of experience in advising and assisting entrepreneurs to set up and develop successful business operations in Cambodia.

Based on RBA’s wide business network and partnership in Cambodia, our team can advise you on:

• The appropriate choice of legal entity for your business operations in Cambodia;
• The correct procedures to be followed for the incorporation and administration of Cambodian companies;
• Bookkeeping and accounting in compliance with Cambodian norms and requirements;
• Selection of a partner bank that matches with your needs and expectations in order to open a corporate bank account in Cambodia;
• The right procedure to be followed to obtain Cambodian Employment Visa.

Should you require any further information or have any queries, please do not hesitate to contact us

Starting my business in Cambodia

As it could be expected in a developing jurisdiction, the laws and regulations in Cambodia are less comprehensive than that in developed countries with strong and stable legal frameworks. However, there are continuous efforts to improve the legal system and establish a coherent set of laws and regulations.
 
The Cambodian Government actively encourages foreign direct investment and imposes very few legal restrictions on foreign investors. It offers numerous incentives and tax allowances to potential investors. Most sectors in Cambodia are open to 100% foreign direct investments, with the main exception being the foreign ownership of land for foreign investors (as highlighted further below).
 
The current legal system in Cambodia has become more or less a hybrid system, which tends to be a mix between Cambodian traditions, the French based legal system (which is an influence arising from French colonization), and the common law based jurisdictions, since foreign aid organizations and multilateral institutions often assist the government in drafting new laws.
 
With a fast and sustainable economic growth of 7% in 2015 (World Bank), combined with business friendly government policies, Cambodia offers an attractive land of opportunities for private investors as well as institutional investors wishing to conduct business in one of the most dynamic countries in the heart of Southeast Asia, a rapidly expanding region in the world economy. Furthermore, Cambodia became a member of the Association of Southeast Asian Nations (ASEAN) and was granted accession to the World Trade Organization in 2004, opening up the country’s economy to the global market place.

Forms of Business Ownership in Cambodia

The Law on Commercial Enterprises, promulgated on 19 June 2005, governs commercial law in Cambodia and defines different types of corporate structures through which business can be conducted, including (1) sole proprietorships, (2) partnerships, (3) private limited liability companies or public limited enterprises, and (4) foreign businesses. Investors must register the business at the Ministry of Commerce in the month of formation and no more than 15 days before the commencement of its operations.

From 4 January 2016, the Ministry of Commerce (‘’MoC’’) launched an online commercial registration platform to facilitate business registration for new companies. Moreover, all companies that were incorporated before 4 January 2016 are required to re-register on the MoC’s website.  

Sole proprietorship

A sole proprietorship, as its name implies, is a type of business entity that is owned and operated by a single natural person who owns all of its capital.  There is no legal distinction between the owner (i.e the sole proprietor) and the business. As a consequence, the owner bears sole and exclusive responsibility over the obligations and liabilities that may occur during the operation of the business.

Partnership

Two or more persons own a business. It is the most commonly used business organization for professionals such as lawyers, doctors and accountants who wish to do business together. There are two types of partnerships: general partnership and limited partnership.

In a general partnership, the general partners control the day-to-day operations and are personally liable for the partnership’s debts and obligations. However, a limited partnership has at least one general partner who is the sole person authorized to administer and bind the partnership and is required to have at least one limited partner who contributes to the capital and is liable only to the extent of their capital contribution.

Company

The company is the most common business entity. While, constituting a company is more complicated and expensive than forming a sole proprietorship or a partnership, it has the considerable advantage of limited liability for its members.

The Law on Commercial Enterprises requires a limited liability company to have, by default, its capital divided into 1,000 shares, with a value per share at least equal to KHR 4,000. Therefore, the Ministry of Commerce requires a deposit of KHM 4 million into a company bank account in order to meet the capital requirements for commercial incorporation. The company is required to have a registered office address in Cambodia.

There are two types of companies: private limited and the public limited companies.

• Private Limited Companies: A Private Limited Company may have 2 to 30 shareholders and is prohibited from offering its shares or other securities to the public.

• Public Limited Companies: A Public Limited Company is legally authorized to issues securities to the public. It may have more than 30 shareholders. In Cambodia, only Private Limited Companies can operate banking business, insurance business or be a financial institution.

Foreign Business

A foreign parent company has various options to conduct its business in Cambodia. It can either set-up a Representative Office, incorporate a Branch Office, or register a Subsidiary.

• Representative Office

An RO is not a separate legal entity from its principal and has no legal personality. Nonetheless, it remains subject to commercial registration with the Ministry of Commerce (“MoC”).

Its scope of activities is limited. The permissible acts of a representative office in Cambodia include:

• introducing customers to the principal company;
• conducting market research;
• marketing products at trade fairs;
• renting an office and employing staff; and
• entering into contracts with local customers on behalf of its principal.

Most importantly, an RO must not, whether directly or on behalf of its parent company, carry on commercial operations, be engaged in profit making activities, nor engage in trading activities in and out of Cambodia. Its activities should be limited to facilitating the sourcing of local goods and services and to collect information for its parent company. It may also serve as a channel for promoting and marketing the parent company’s products and services in Cambodia.

A RO should not derive any income from its activities. However, the RO is subject to tax requirements regarding the withholding tax paid on salaries to employees as well as an annual business operation tax (patent tax).

• Branch

A branch is an office opened by a foreign company for the purposes of conducting a particular commercial activity in Cambodia. It is not a separate legal entity from its principal and has no distinct legal personality. In common with an RO, a branch is subject to commercial registration with the MoC.

A branch can conduct all of the activities of a RO. In addition, a branch can undertake business and commercial operations in Cambodia in any sector that is open to foreign investment. Indeed, a branch may purchase and sell goods, conduct regular professional services, engage in manufacturing, processing and construction in the same manner as a local business, except for any activities that are prohibited to foreigners (such as the restriction on for foreign ownership of land). Hence, the scope of activities of a branch is broader than that of a RO, because a branch can engage in any commercial and profit making activities that are allowed to any local companies (except activities that are restricted for foreign investors).

• Subsidiary

A subsidiary can be incorporated as a limited liability company or a partnership and is a separate legal entity from its principal. A subsidiary is a company incorporated in Cambodia which has at least 51% of its capital held by a foreign company.

A subsidiary can undertake any activity that is open to foreign investment. Each subsidiary is required to incorporate and register with the MoC. 

Company Establishment Process

1. Commercial Company
 
A commercial company is a normal company established at the MoC and is not entitled to any specific investment incentives or Qualified Investment Project (‘’QIP’’) status.
 
The application for the registration of such a company shall be submitted to the Commercial Registration Department of the MoC with supporting documents. The completion of the registration takes approximately 7 to 15 days in Phnom Penh and 15 to 21 days in the provinces. If approved, the MoC provides the applicant with a Letter of Approval as well as a Certificate of Incorporation and other relevant documents.
 
Within 15 days from the date of the completion registration at the MoC, the company is required to register at the relevant office of the Tax Department. The company is then provided with a Patent Tax Certificate, VAT Certificate and Official letter from the relevant tax office confirming the tax registration, which includes the Tax Identification Number (TIN).  As a matter of practice, the VAT registration is undertaken at the same time as the Tax Registration above. This tax registration process takes approximately 15 to 21 days.
 
In addition to the above registration and before the commencement of the business operations, the company must notify the local authority (the Sangkat/Commune Office), to obtain the Letter of Confirmation of its business address and submit this letter to the Phnom Penh Municipal Hall (or Provincial Hall) in which the office is located, for approval to use the address as the registered office and erect a signboard of the company. This process takes approximately 4 to 6 weeks.
 
Labor Law requires any business operating and employing staff in Cambodia to register with the General Department of Labor of the Ministry of Labor and Vocational Training (“MLVT”) within:
 
30 days of the commencement of its business operations, if the business employs less than 8 people and does not use machinery; or 15 days before the commencement of its business operations, if the business employs more than 8 people.
 
2. Investment Company
 
An investment company is required to establish and register at both the MoC and the CDC.  It is the same as a commercial company but it has QIP status and is therefore entitled to some or all of the investment incentives and guarantees (see below).
 
The CDC is appointed by the Royal Government of Cambodia (“RGC”) to act on its behalf to encourage foreign investors to Cambodia through the operation of a “One-Stop Shop” department called the “Cambodian Investment Board” (“CIB”). The CIB examines investment proposals and issues approvals for QIPs.
 
A company wishing to obtain a QIP needs to submit an investment proposal to the CIB of the CDC in the form and according to the procedures provided in the relevant law and regulations. Within 3 working days of the CDC’s receipt of the investment proposal, the CDC shall issue to the company either:
 
a Conditional Registration Certificate, which is the in-principal approval from the CDC of the submitted investment proposal; or a Letter of Non-Compliance if the investment proposal is not accepted.
 
The Conditional Registration Certificate confirms the investment incentives that the QIP is entitled to and also specifies the approvals, authorizations, clearances, licenses, permits or registrations required for the QIP’s operation, as well as the obligations of those government entities to issue such approvals, clearances, licenses, permits or registrations to the QIP. This includes the commercial registration process of the QIP company with the MoC and the Tax Department.
 
Within 28 working days of the issuance of the Conditional Registration Certificate, the CDC shall issue the Final Registration Certificate confirming its granting of the QIP status to the applicant. The estimated time to obtain the QIP status is approximately 31 working days. The date of issue of the Final Registration Certificate is the date of commencement of the QIP.
 
Alternatively, investors can also choose to start their business with a commercial company and apply for a QIP at a later stage.

Labor Law in Cambodia

Cambodia’s Labor Law provides relatively high protection for workers. It contains provisions relating to working hours, salary entitlements, rest breaks and leave entitlements, amongst others.

Labor Contracts

In Cambodia there are two types of employment contracts: (i) fixed duration contracts; and (ii) unlimited duration contracts.  Each of those is characterized by the following features:

Fixed Duration Contracts:

• This type of contract must contain a precise end date and cannot be for a period longer than 2 years.

• If the original period is less than 2 years, the contract may be renewed one or more time, provided the total time period does not exceed 2 years.
• If the contract exceeds 2 years, it will automatically be considered a contract of unlimited duration.
• If the employment contract is terminated earlier by the employer, then the employee is entitled to damages in the amount of the remuneration that the employee would have received had the contract run for its full term.
• At the end of a fixed duration contract, the employee is entitled to a severance payment equal to 5% of the total wages paid during the contract plus the value of any unused annual leave.

Unlimited Duration Contract:

• This is a contract with either no fixed end date or where the total duration exceeds 2 years.
• This type of contract may be terminated by either party by giving 7 days to 3 months’ notice (depending on the seniority of the employee).
• Upon termination the employee is entitled to a severance payment ranging from 7 days to 6 months’ salary (depending on the seniority of the employee) and any unused annual leave.
• The contract may contain a probation period of 1 to 3 months, depending on the type of employment.

Foreign Employees

Under Cambodian law the maximum number of foreign employees is 10% of the company’s workforce in Cambodia. A company may apply to the Ministry of Labor to increase this limit.

In order to be lawfully employed in Cambodia, foreigners must:

• obtain a labor book and work permit issued by the Ministry of Labor;
• have entered Cambodia legally;
• have obtained a business visa either prior to arriving in Cambodia or at the airport;
• be of good character;
• have the relevant qualifications for the job; and
• have no contagious diseases.

A work permit is valid for 1 year and may be extended for further one-year periods, provided that any such extension does not exceed the term of the foreigner’s business visa.

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My Business Asia is the best offer to help you for your accounting, corporate services, business set up, company incorporation,corporate services, business structure and tax management, in Vietnam, Thailand, Hong-Kong and Singapore

The post STARTING – My Business in Cambodia appeared first on MyBusiness in Asia.

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Starting my business in Singapore

Register your business with us here

Singapore enjoys a favourable economic environment and offers various grants and attractive financial incentives to businesses. Thus, a large number of multinational companies have chosen Singapore as a regional hub in Asia.  

Benefiting from a stable political and regulatory, as well as an independent judiciary, the city-state continues every day to attract investors from around the world. Such an environment has enabled it to become one of the major global business centers.  

A Singapore company is an excellent vehicle for development in almost all economic sectors: trade, advisory, portfolio holding companies, shareholding in investment projects, shipping companies, treasury centres, real estate, yachting and intellectual property management.

Use our digital services for your business here

Establishing a Subsidiary in Singapore

Register your subsidiary with us here

A foreign company may incorporate a subsidiary in Singapore as a private company limited by shares of which the majority of shares are held by the foreign parent company. It is incorporated with limited liability and has a distinct legal identity. The foreign parent’s liability is limited to the value of the shares it has subscribed to in the subsidiary and may be the sole shareholder, owning 100% of the subsidiary’s shares. A Singapore subsidiary is entitled to local tax incentives. Depending on the structure of their shareholding, certain companies may pay zero tax on the first S$100,000 (pprox.. USD70,000) of chargeable income for the first three consecutive years after incorporation.

Setup Requirements for Singapore Subsidiary Company

• Minimum one Corporate Shareholder
• One Resident Director
• One Company Secretary
• Minimum initial paid-up capital is S$1
• A Singapore registered office address

Use our digital services for your Subsidiary here

Registration of a Representative Office in Singapore

A Singapore representative office (RO) is usually set up when a foreign company wishes to establish a presence in Singapore, but does not (yet) intend to conduct business there. A RO is primarily for non-commercial activities, including administrative activity. Under Singapore law, a RO is not a business entity and is not allowed to undertake any profit generating activities.

In order to register a Singapore RO, all applications must satisfy the following criteria:

• The foreign parent company must have annual sales turnover in excess of USD250,000; and
• Have been established for three years or more; and
• The proposed number of employees in the RO must be five or less.

The following documents are required to register a RO:

• Completed application;
• Copy of the parent’s Certificate of Incorporation or Registration Certificate;
• Copy of the parent’s latest annual report and audited accounts; and
• Duly endorsed undertaking to abide by the legislation and regulations governing the operation of RO in Singapore
• All documents must be in English or provided with an official English translation.

RBA can assist you in the registration of your RO in Singapore here

Registration of a Local Singapore Company

Register your local Singapore Company with us here

All Singapore businesses must be registered with the Accounting & Corporate Regulatory Authority (ACRA) of Singapore.

The Private Company Limited by Shares is the most popular business entity in Singapore.

It has a legal status independent from its shareholders and directors, who enjoy liability for the debts and losses of the company. A limited company has the legal capacity to enter contracts in its name, own property and sue and be sued. Its limited liability status is indicated by ‘Pte Ltd’ in its name.

Features of a Private Company Limited by Shares

• A legal entity separate and distinct from its shareholders and directors.
• It can sue or be sued in its own name.
• A minimum of one and a maximum of fifty shareholders.
• A subsidiary company, with at least one individual shareholder with minimum of 10% shareholding, is entitled to additional local tax incentives.

Singapore Company Registration Requirements for Singapore Private Company Limited by Shares

• Minimum one Shareholder
• One Resident Director
• One Company Secretary
• Minimum initial paid-up capital is S$1
• A Singapore registered office address

Use our digital services for your local Singapore Company here

Tax Exemption Schemes and Rebates for Companies

In an effort to support corporate start-ups, the Singapore tax authority has implemented a scheme offering sizable tax exemptions to resident companies. The two of the most common schemes are :

Tax Exemption for Qualifying Singapore Start-up Companies: qualifying new companies are given full exemption on the first S$100,000 normal chargeable income and a further 50% exemption on the next S$100,000 of normal chargeable income for the first three consecutive Yas. To qualify for tax exemption for start-ups, eligible companies must (i) be incorporated in Singapore, (ii) be a tax resident in Singapore and (iii) must not have more than 20 shareholders with at least one individual shareholder holding at least 10% of the issued ordinary shares of the company.

Partial Tax Exemption: eligible companies will enjoy a 75% exemption on the first S$10,000 of normal chargeable income and a further 50% on the next S$190,000 per YA.

Corporate Income Tax Rebate : a company is taxed at a flat rate of 17% on its chargeable income. However, resident companies will enjoy a 25% rebate of corporate income tax payable, subject to a cap of $15,000 per YA.

Use our digital services for your company’s taxation and administration here

RBA can assist you in complex tax structuring for your Company in Singapore here

Singapore Limited Liability Partnership

A Limited Liability Partnership (LLP) is a perfect blend of a partnership with the benefits of private limited company.

An LLP gives its owners the flexibility of operating as a partnership, while having a separate legal identity similar to a private limited company. This type of entity is highly suitable for individuals engaged in professional services, including lawyers, architects, accountants and management consultants. Singapore citizens, residents, and employment pass holders can register a LLP. Foreign individuals and companies may also register an LLP but must appoint a local manager.

Features of an LLP

• It is a separate legal entity.
• Partners have limited liability.
• Minimum of two partners, no maximum limit.
• Partners can be individuals or a body corporate (company or other LLP).

Setup Requirements for a LLP

• Minimum two partners.
• Minimum one manager who must be a Singapore resident.
• A Singapore registered office address.

Tax and Singapore LLP

A Singapore LLP, is not directly subject to tax as it is not considered to be a corporate entity. Income from an LLP is taxed in the hands of the partners at their personal income tax rates. A corporate partner will be taxed at the applicable corporate tax rate.

RBA can assist you in the registration and administration of LLP in Singapore here

Singapore Sole Proprietorship

A Sole Proprietorship is the simplest form of business model with one individual or entity individually responsible for all the assets and liabilities of the business. Singapore citizens or permanent residents, holders of Employment Pass or EntrePass may register as a Sole Proprietor. Foreign individuals and companies may also register a Sole Proprietorship but must appoint a Singapore resident manager.

Features of a Sole Proprietorship

• It does not have a separate legal entity.
• The owner has unlimited liability.
• It cannot own property.

Requirements for a Sole Proprietorship

• Only one owner either corporate or an individual.
• A Singapore registered office address.
• For foreign individuals and companies only: minimum one manager who must be a Singapore resident.

Taxation of Singapore Sole Proprietorship

Singapore Sole Proprietorship, though tax resident, is not considered to be a corporate entity.  Profit is taxed at the personal income tax rate of the owner.

RBA can assist you in the registration and administration of your Sole Proprietorship in Singapore here

STEP BY STEP GUIDES

Singapore Company Formation and business registration

Step 1: Name Reservation

The first step to set up a Singapore company, is to obtain name approval from the Singapore Registrar of Companies.  Rosemont completes the application for name approval as part of the incorporation and registration service.

Name approval/rejection takes less than an hour, unless the proposed name includes regulated words including bank, finance, law, media, etc. that might require the review and approval of an external government authority, which may delay the name approval process by few days.

To increase the chances of receiving a quick name approval, the name should not:

• be identical or too similar to any existing local company names;
• infringe any existing tradenames;
• be obscene or vulgar; and
• be reserved already.

An approved name will be reserved for 60 days from the date of application. The name reservation can be extended by a further 60 days by filing an extension request before the expiry date.

Step 2: Register the Company

On receipt of name approval, the incorporation request can be filed and the Registrar of Companies approval can be obtained in a few hours. The incorporation procedure may be delayed if the authorities request additional information.

A registration fee of S$300 (approx. USD200) is payable to the Registrar of Companies on incorporation.

Supporting Documents

To incorporate, the following information is required by the Company Registrar:

• Company name;
• Brief description of the proposed business activity;
• Details of the shareholders, directors and company secretary;
• Address of the registered office
• Constitution. The Company Registrar provides standard Constitution document that is suitable for most companies.

MBIA will collect the following documents from you to prepare the incorporation documentation:

1. For Non-Residents: Copy of passport, proof of overseas residential address  and  Know-Your-Client (KYC) information including bank reference letter, personal and business profile, etc.
2. For Singapore Residents: Copy of Singapore identity card
3. If the Shareholder is a corporate entity: Copy of registration documents including Certificate of Incorporation and Memorandum & Articles of Association.

Note that officially certified English translations must be provided of any documents that are not in English.

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Post-Registration Formalities

Certificate of Incorporation

The Company Registrar will send an official email notification confirming the incorporation of the company. The email notification includes the company registration number and is treated as the official certificate of incorporation in Singapore. A hard copy of the certificate of incorporation is no longer issued by default, as it is not required in Singapore, but one can be obtained by an online request to the Company Registrar on payment of a fee of approximately S$50.

Company Business Profile

A business profile containing the particulars of the company can be obtained from the Company Registrar by an online request on payment of a small fee. Generally, the document (a PDF file) is available for download within an hour of the request and contains the following key details:

• Company name and registration number;
• Previous names of the company, if any;
• Incorporation date;
• Principal activities;
• Paid-up capital;
• Registered office address;
• Details of the shareholders, directors and company secretary;
• The email notification of incorporation and company business profile are sufficient evidence of the legal status of the company in Singapore for all legal and contractual purposes, including the opening of corporate bank accounts, signing a lease for business premises, subscribing to telephone/internet services, etc.

Other items that will be required upon registration of the Singapore company include:

• Share certificates for each of the shareholders;
• Share register recording share allocation;
• Company seal; and
• A rubber stamp for the company.

Incorporate with us

Opening a Corporate Bank Account in Singapore

After registration of a Company in Singapore a corporate bank account can be opened with any of the major banks in Singapore. Many banks will require the physical presence of the company’s principals as part of the account opening procedure.

If unable to visit Singapore, MBIA can suggest banks that will open a corporate bank account without a meeting in Singapore;

If the principals are able to visit Singapore, there is a greater choice of banks and the facilities they provide to enable the principals to choose the bank best suited to the needs of the company.

Incorporate with us here

Transfer your business to us here

RBA can assist with complex bank account opening and structuring see more

Licences in Singapore

Depending on the company’s activity, it may require one or more licenses after incorporation before commencing its activity if it operates a restaurant, an educational institute, travel agency, financial services, import/export of goods, etc.

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Transfer your business to us here

RBA can assist you in your license application see more

Applying for Goods and Services Tax (GST) Registration

Goods and Service Tax (GST) registration in Singapore

If the projected annual revenue of the company exceeds SGD 1 million (approx. USD700,000), the company must register for GST. GST, also known as Value Added Tax (VAT) or Sales Tax, is currently charged at 7% on the supply of goods and services. GST registration is not mandatory if the annual turnover is less than S$1 million.

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STARTING

Starting My Business in Hong Kong

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GOVERNMENT’S POLICY

One Country, Two Systems

 It is a fundamental state policy formulated by Deng Xiaoping to accomplish the peaceful reunification of China by resolving the sovereignty questions of Hong Kong and Macao, that have arrisen from a complicated historical background. Deng Xiaoping suggested that there would be only one China, but distinct Chinese regions such as Hong Kong and Macau could retain their own capitalist economic and political systems, while the rest of China uses the socialist system. Under the principle, each of the three regions could continue to have its own political system, legal, economic and financial affairs, including external relations with foreign countries. 

Positive non-interventionism policy

Much of Hong Kong’s business success is due to the laissez faire economy. Business in Hong Kong is market-driven in line with the territory’s free-market philosophy. The government has provided a low tax rate, an efficient infrastructure and allowed trade and industry to flourish with a minimum of intervention. In the 1980s, the HK government admitted, in the words of then Financial Secretary Philip Haddon-Cave (1984), that the government stance was one of ‘positive non-interventionism’ rather than laissez-faire, meaning that the government had to respond when industries with social obligations ran into trouble and when an institution needed regulation to prevent inequitable practice. The government sees its role as building a business-friendly environment and providing an essential support framework to enable the private sector to prosper.

CEPA

The Closer Economic Partnership Arrangement (“CEPA”) established between Hong Kong and Mainland China in 2003 opened up the Mainland’s markets to Hong Kong’s goods and services. Hong Kong and Mainland China thereafter broadened the scope of CEPA and signed ten supplements between 2004 and 2013, expanding market liberalization and further facilitating trade and investment for the economic cooperation between the two jurisdictions. All products of Hong Kong origin, except for a few prohibited articles, can be imported into the mainland tariff free under CEPA. Hong Kong service suppliers enjoy preferential treatment when entering the mainland market in various service areas. There are also agreements or arrangements on the mutual recognition of professional qualifications.

Linked exchange rate

The Linked Exchange Rate System was established in 1983 and stabilizes the exchange rate between the Hong Kong dollar (“HKD”) and the United States dollar (“USD”).

The adoption of a linked exchange rate system between the HKD and the USD forces Hong Kong to adjust its interest rate according to that of the USA. When the Federal Reserve of US increases the interest rate, sooner or later the local interest rates will follow regardless of the state of the local economy. In addition, the exchange rate of the Hong Kong dollar will fluctuate against other major currencies along with the US dollar. 

CURRENT ECONOMIC SITUATION

Pilot RMB Trade Settlement Scheme

Since the introduction of the Pilot Renminbi Trade Settlement Scheme by the Central Government in July 2009, Hong Kong has successfully expanded its Renminbi (“RMB”) business by offering a number of RMB-denominated financial products and services, including trade finance, stocks, bonds and funds. Since the scheme was introduced, the related cross-border remittances total over RMB15 trillion and RMB customer deposits in Hong Kong had surged to RMB1 trillion as at end-2014. In 2014, issuance of RMB bonds in Hong Kong (Dim Sum Bonds) reached RMB197 billion.

Active Stock Market

At the end of April 2015, Hong Kong’s stock market was ranked as the third largest in Asia and the sixth largest in the world in terms of market capitalization. There were 1,752 companies listed on HKEx, including 204 companies on the Growth Enterprise Market. The total market capitalization of Hong Kong’s stock market has reached US$3.2 trillion. Hong Kong is also the second largest private equity centre in Asia, managing about 19% of the total capital pool in the region at end of 2014.

LEGAL SYSTEM IN HONG KONG

The legal system in Hong Kong is based on the rule of law and the independence of the judiciary. The constitutional framework is provided by the Hong Kong Basic Law. The Basic Law ensures that the legal system in the HKSAR will continue to give effect to the rule of law, by providing that the laws previously in force in Hong Kong (that is, the common law, rules of equity, ordinances, subordinate legislation and customary law) shall be maintained, save for any that contravene the Basic Law, and subject to subsequent amendment by the HKSAR legislature.

Forms of Business Ownership in Hong Kong

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SOLE PROPRIETORSHIP

A person owns a business – This the simplest business organization. A sole proprietor needs to: (1) register their business with the Inland Revenue Department (“IRD”) for profit tax purpose; (2) obtain the Business Registration (“BR”) Certificate; and (3) renew BR Certificate annually with BR Office of IRD only. A formal document to set up a business in Hong Kong is not required. 

PARTNERSHIP

Two or more persons own a business. Under the Partnership Ordinance (Cap 38), Section 3(1): “Partnership is the relation which subsists between persons carrying on a business in common with a view of profit”. Although a partnership can be formed simply by oral agreement(s), it is advisable to have a written contract to ensure that the partners are clear about what they have agreed.

LIMITED PARTNERSHIP

Limited partnerships are governed by the Limited Partnerships Ordinance (Cap 37). Section 3(2) provides that a limited partnership must consist of at least one general partner (“GP”) and at least one limited partner (“LP”). GPs are liable for all debts and obligations of the firm and LPs, at the time of entering into such partnership, are required to contribute to the limited partnership a sum or sums as capital or property valued at a stated amount.

COMPANY

The Company owns the business. A company is a separate legal entity from the people who own the company’s shares (i.e. the members or shareholders) or its managers (i.e. the directors). Most of the companies in Hong Kong are formed by the registration procedure set out in the Companies Ordinance (Cap 622).

Most Hong Kong companies’ members enjoy the benefit of limited liability. When the company fails financially or is liquidated, the members will only lose their investment. Their personal wealth will not be affected. Company law is governed mainly by the Companies Ordinance but case law is an important source of law relating to company administration, management and liabilities.

Regardless of the form of business, a BR Certificate must be obtained from the IRD for profits taxation purposes. Choosing an appropriate business form is the key decision for the business. 

Types of Companies

It is possible to form several different types of companies under the Companies Ordinance. The most common one is the company limited by shares. It is the one most often used for general commercial purposes. The shareholder of the company may lose the value of their shares if the company is liquidated and cannot pay all of its debts. They will not be personally responsible for the company’s liabilities.

Alternatively, there is a company limited by guarantee. This type of company is used mainly for charities or professional associations. The object of the company is not for trading or running a business but to further professional objectives or the promotion of charitable objects. Should the company fail, the members of these companies make a written promise (the guarantee) to contribute a small amount to the assets of the company – usually HK$10 or HK$100.These members have no further liability for the company’s debts.

Private Company vs Public Company

 Another distinction in law is between public and private companies. In Hong Kong a private company is intended for use by a small number of persons who wish to have the advantages of incorporation.

Under Section 11(1) of the Company Ordinance a private company restricts under its articles of association (1) the transfer of shares; (2) limits the number of members to no more than 50 persons; and (3) prohibits any invitation to the public to subscribe for shares in the company. Besides, a private company cannot be incorporated as a company limited by guarantee. There are about 1,170,000 private companies in Hong Kong.

A public company is neither a private company nor a company limited by guarantee. It can : (1) have more than 50 members, (2) has no restriction on the transfer of its shares and (3) may invite the public to buy shares.

The Hong Kong Companies (Amendment) Ordinance 2003 provides that with effect from February 2004, a private company may have only one director and one shareholder, so permitting the formation of a “one-man company”. The requirement to have at least 2 directors for a public company remains unchanged.

Listed Company

A listed company is a public company which is listed on the Stock Exchange of Hong Kong (“SEHK”). The SEHK is simply a market place where one can easily buy or sell shares in the companies that are listed there. The process of listing a company is called an initial public offering (IPO) and the company must satisfy a number of very stringent requirements set by the Ordinance and by the Listing Rules of the SEHK.

Non-Hong Kong Company

Many companies operating in Hong Kong are incorporated under the law of foreign countries. When a foreign company intends to carry business business in Hong Kong, it must apply to the Registrar of Companies for registration, within one month from its establishment in Hong Kong.

Shelf Company

This is a company that has already been formed by registration agents to be sold and has not commenced business. The advantage of using such a ready-made company to set up a new business is speed – the company already exists and can trade immediately. However, the memorandum, articles, capital limited and name may need to be altered to suit the specific needs of the business and its owner.

Choice of Business Entity in Hong Kong

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There are three main business entity choices: (1) sole proprietorship; (2) partnership; and (3) company. The advantages and disadvantages to each business entity have been summarized below.

The easiest business entity to begin the business is a sole proprietorship. The main feature of this form is that it is identified with the sole proprietor. If the business makes a profit, it automatically is the income for the sole proprietor. If the business incurs a debt, it is the sole proprietor’s personal debt. If the business gets sued, the sole proprietor will be sued personally as well. This is the strength and at the same time is the weakness of the sole proprietorship.

Therefore, sole proprietorship may be appropriate for a low risk business that does not need limited liability and if the sole proprietor has sufficient capital. This is often used for small businesses.

When the sole proprietor does not have sufficient capital to start his business, he may need to invite other investors to join his business. A partnership or company may be more appropriate.

One benefit of partnership is to raise more capital. Other partners’ contributions may be what a sole proprietor needs to launch his business. 

The third form of business is the company and the two main advantages to incorporate are (i) easier to attract investors; and (ii) having corporate personality.

The running of a company requires compliance with the Companies Ordinance which can increase costs.

Specific Licenses in Hong Kong

Apart from obtaining the business registration certificate, certain businesses are required to hold additional specific licenses for authorized activites in fields such as: banking, insurance, trust company, telecommunications, money service operation, funds operation.

The goods & services business license is the most common license in Hong Kong and it is classified into three business groups: (1) Food; (2) Non-food Goods; and (3) Services. 

FOOD

Food businesses are recommended to apply for the relevant license before starting the trading, selling, processing and production of regulated food, including beverages, fruit and vegetables, dairy produce, meat, fish, confectionery and bakery products.

Restaurants and food stores are also required to hold the specific license that is appropriate for their activity and must provide full details of the activity in the application forms.

NON-FOOD GOODS

Trade in non-food goods is also regulated and a specific license is required. There is a wide range of regulated activities including, among others, chemicals, clothing and footwear, animals and pets, jewellery and electrical appliances.

SERVICES

A specific license is required to operate a business in certain categories including, amusement and recreation, construction, cultural and social services, education, financial services, fire and security, land and air transport, medical and social welfare services, personal services, printing and publishing, research and development of natural sciences and engineering, storage and freight handling, telecommunications, travel services, waste, water transport and shipping agents.  

RBA can assist you in your license application here.

Bank Account Opening in Hong Kong

Hong Kong banks are monitored by the Hong Kong Monetary Authority (“HKMA”) in accordance with international standards, in particular those recommended by the Basel Committee on Banking Supervision.

INDIVIDUAL BANK ACCOUNT

Individuals are normally required to hold a Hong Kong identity card or resident’s card to open a bank account in Hong Kong. Debit cards are generally not issued but Visa and Mastercard credit cards are common.

In 2012, the Hong Kong Government enacted Anti-Money Laundering and Counter Terrorist Financing (Financial Institutions) Ordinance which restricts the ability of banks to open a bank account in Hong Kong other than by a personal meeting with the bankers. Citizens of some countries may find it difficult to open a bank account in Hong Kong including nationals of the CIS countries, Iraq, Iran and India.

Each bank will have its own seperate account opening procedures and documentary requirements. Banks require proof of the applicant’s full name and current residential address in English or Chinese. A government authority, electricity supplier, another bank, or telecommunication company should issue the proof of address (e.g. bank statement, water and utility bill) dated not more than 60 days before the meeting with the bank.

If the due diligence requirements and the meeting are satisfactory, an individual bank account should be opened within a few weeks.

CORPORATE BANK ACCOUNT

Opening a corporate bank account can be more onerous more difficult and complicated than opening an account for an individual. In addition to the standard requirements for individuals, HKMA also requires that all Hong Kong banks operating in Hong Kong meet with all shareholders owning more than 10% of the shares of the Hong Kong Company, a majority of the board of directors and all authorized signatories during the account opening process.

All the individuals will be required to produce their passports and the proof of address. A business plan should be prepared to explain the company’s business. If all the paperwork is in order it should be possible for a corporate bank account to be opened within about 2 to 4 weeks, although this may take longer for more complex applications.

RBA can assist with complex bank opening and structuring here

Employment Law in Hong Kong

The employer-employee relationship is not only considered in economic terms, but is also a relationship of mutual dependency. Both the employers and the employees have moral as well as legal obligations arising from this relationship.

WHAT IS AN EMPLOYMENT CONTRACT?

A contract of employment is an agreement on the terms and conditions of employment made between an employer and an employee. The agreement can be made orally or in writing and includes both express and implied terms. The Labour Department encourages employers and employees to set out terms and conditions in written employment contracts. An employment contract must be made in accordance with the common law and relevant statutory requirements. 

As stipulated by the Employment Ordinance (Cap 57) (“EO”), an employer must clearly inform each of the employees of the conditions of employment under which they are to be employed with regard to:

• Wages (including rate of wages, overtime rate and any allowance);
• Wage period;
• Length of notice required to terminate the contract;
• The end of year payment or proportion and the payment period (if any).

If there is a breach of material term by the employer, the employee may resign and claim constructive dismissal. If the breach of a material term is on the side of the employee, the employer is also able to dismiss an employee fairly. 

CONTINUOUS EMPLOYMENT CONTRACTS

The EO does not provide a definition of full time or part time employment. A continuous contract of employment is an employment by the same employer for four weeks or more, for at least eighteen hours a week.

All employees are covered by the EO, irrespective of the number of hours they work in each week, and are entitled to basic protection under the EO including wage protection, statutory holidays and protection against anti-union discrimination. Employees employed under continuous contracts are entitled to further benefits including rest days, paid annual leave, sickness allowance, long service payment, severance payment, etc.

Mandatory Provident Fund

Due to low birth rates and increased life expectancy, Hong Kong is facing a rapidly ageing population. As the population grows older, the working population will have a much larger number of retirees to support. 

The debate over a suitable retirement protection system for Hong Kong started in the 1960s. In 1994, the World Bank published its report “Averting the Old-Age Crisis: Policies to Protect the Old and Promote Growth”, in which a three-pillar approach to protection for the aged was put forward. The three pillars were:

• a publicly managed, tax-financed social safety net;
• a mandatory, privately managed and fully funded contribution scheme;
• a voluntary personal savings and insurance. 

Hong Kong’s Mandatory Provident Fund (“MPF”) system was designed to form the second pillar for retirement protection. In 1995, the Mandatory Provident Fund Schemes Ordinance (Cap 485) (“MPFSO”) was enacted, supplemented by subsidiary legislation passed in 1998, 1999 and 2000. The MPF system was launched in December 2000.

THREE TYPES OF MPF SCHEMES

There are three types of MPF schemes in Hong Kong: Master Trust Schemes, Employer-sponsored Schemes and Industry Schemes.

Master Trust Schemes

Master Trust Schemes are the most common type of MPF schemes in Hong Kong. It is open to relevant employees of participating employers, self-employed persons and persons with accrued benefits transferred from other schemes. By pooling together contributions from various employers and their relevant employees and those from self-employed persons, Master Trust Schemes have a high degree of efficiency in terms of scheme administration because of economies of scale.

Employer-Sponsored Schemes

Employer-Sponsored Schemes are schemes limited to the employees of a single employer and its associated companies. Because of restrictions to membership, it is only cost-effective to run an Employer-Sponsored scheme with a large number of employees.

Industry Schemes

Industry Schemes refer to pension schemes which have been specially established for employees in the catering and construction industries, particularly casual employees (i.e. workers employed on a day-to-day basis or for a fixed period of less than 60 days). Casual employees do not need to change schemes when they change jobs within these two industries, providing their previous and new employers have registered with the same Industry Scheme.

FOUR-TIER PROTECTION SYSTEM

To ensure that employees’ interests are adequately and properly protected, Mandatory Provident Fund Schemes Authority (“MPFA”) has a comprehensive approval and monitoring system. There are Stringent Approval and Registration Criteria; On-going Monitoring; Professional Indemnity Insurance; and Compensation Fund. 

Stringent Approval and Registration Criteria

Companies incorporated in or outside Hong Kong may apply to become MPF approved trustees by meeting stringent statutory criteria on capital adequacy; sufficient presence and control in Hong Kong; capability the conduct the business of administering MPF schemes; fitness and propriety of the controllers; the skill, knowledge, experience and qualifications of the directors and the chief executive officer and the company’s internal standards of control.

Natural persons can also apply to become MPF approved trustees. However, at present, all the approved trustees are companies incorporated in Hong Kong. MPF trustees are responsible for appointing investment managers and other service providers and to ensure that they comply with all MPF requirement, standards and guidelines.

On-going Monitoring

As the regulator of the MPF system, MPFA monitors MPF trustees to ensure their compliance with the MPF legislation and to facilitate early detection and correction of errors and deficiencies. All MPF trustees are required to regularly lodge returns, financial statements and internal control reports with MPFA. MPFA conducts field inspections of trustees and investigates cases of suspected non-compliance as they arise. If trustees fail to comply with the MPF legislation, depending on the nature of the failure, they may receive a warning from MPFA or be subject to financial penalties and ordered to take immediate remedial action.

In case of serious breaches, MPFA can take other action against non-compliant trustees in accordance with the MPF legislation. For example, in a case where the MPFA reasonably suspects that the trustee is unable to carry out any of its duties as an approved trustee, the MPFA may suspend the trustee from administration of the MPF scheme and appoint a new administrator to administer the scheme on a temporary basis. If the MPFA has reasonable grounds to consider that the trustee of a scheme is unable to carry out any of its duties as an approved trustee, the MPFA may revoke the approval of the trustee. Non-compliant trustees may be subject to criminal prosecution.

Professional Indemnity Insurance

MPF trustees are required to take out adequate insurance to provide indemnity in respect of prescribed risks attributable to the administration of the scheme by the trustees or their service providers.

Compensation Fund

The MPFSO also requires the establishment of a Compensation Fund by the MPFA to compensate members of MPF schemes for losses of accrued benefits caused by misfeasance or illegal conduct committed by MPF trustees and others concerned with the administration of the MPF schemes. The government provided a one-off grant of HK$600 million as seed money when the Compensation Fund was established in 1999. 

COVERAGE

Employees

The 60-day employment rule is one of the important factors used to evaluate coverage under the MPF scheme. Any full-time or part-time employee who has been employed for 60 days or more under an employment contract must be covered under the MPF scheme. The 60-days are counted by calendar days (including holidays) and determined by the employment relationship between the employee and employer. The number of actual working days or hours is irrelevant for the calculation. Employers MPF obligations cannot be evaded by breaking up an employee’s employment into a series of periods of less than 60 days. If the total employment over te period is more than 60 days the employer must enroll the employee in an MPF scheme and pay the contributions.

The 60-day employment rule does not apply to a causal employees in the construction and catering industries.

MPF is an employment-based retirement protection system for employees (both regular and causal) and self-employed persons, aged 18 to 65 years, normally residing and working in Hong Kong.

Relevant Income

Under the MPFSO, relevant income includes any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance (including housing allowance or other housing benefit) expressed in monetary terms, that are paid or payable by an employer to the employee in consideration of his/her employment.

Each of the following sources of incomes is regarded as relevant income: wages and salary; reimbursement or allowance in cash form; transportation and car subsidy; commission; tips collected by an employer; and court awards.

On the contrary, the following sources of income are not regarded as relevant income: reimbursement or allowance; travel allowance on non-monetary basis; tips not collected by an employer; employees’ benefits; termination payment; and other non-monetary income.

EXEMPT PERSONS

There are certain categories of persons in Hong Kong who are not required to join an MPF scheme. Employers of exempt persons are exempted from contributing to an MPF scheme for these exempt persons.

Should an individual cease to be exempt, the enrolment and contribution requirements apply from the cessation of the xemption. The following exempt persons not required to join an MPF scheme: 

• Employees and self-employed persons under 18 years or 65 years and older;
• domestic employees;
• self-employed hawkers;
• individuals covered by statutory pension or provident fund schemes, such as civil servants and subsidized or grant school teachers;
• members of occupational retirement schemes which are granted MPF exemption certificates;
• foreigners who enter Hong Kong for employment for not more than 13 months, or who are covered by overseas retirement schemes;
• employees of the European Union Office of the European Commission in Hong Kong.

MANDATORY CONTRIBUTIONS

Regular employees who are paid monthly

Employees and employers who are covered by the MPF system are each required to make regular mandatory contributions to an MPF scheme. The contributions are calculated at 5% of the employee’s relevant income, subject to minimum and maximum relevant income levels. For a monthly-paid employee, the minimum and maximum levels are respectively HK$7,100 (from 1 November 2013) and HK$30,000 (from 1 June 2014). Both employees and employers are free to make voluntary contributions in addition to mandatory contributions.

Casual employees who are not paid on a monthly basis

The calculations of mandatory contributions for casual employees in the Industry Schemes differ from those for regular employees. Casual employees in the construction and catering industries are commonly paid on daily, weekly or bi-monthly basis. Employers should calculate the minimum and maximum levels of relevant income in the differing payroll cycles, to determine the amount of the contribution. The calculation should be based on the daily minimum relevant income of HK$280 (from 1 November 2013) and the daily maximum level of HK$1,000 (from 1 June 2014). The employees and employers are free to make voluntary contributions in addition to mandatory contributions.

Self-employed persons

Self-employed persons who are covered by the MPF system must make regular mandatory contributions to an MPF scheme, calculated at 5% of their relevant income, subject to the minimum and maximum relevant income levels. They can opt to make mandatory contributions on a monthly or yearly basis. The respective minimum and maximum relevant income levels are HK$7,100 per month (or HK$85,200 per year) and HK$30,000 per month (or HK$360,000 per year) (from 1 June 2014). Self-employed persons are free to make voluntary contributions on top of their mandatory contributions. 

CALCULATION, DEDUCTION AND CONTRIBUTIONS

Transfer of accrued benefits

The MPF contributions made by an employee and their current employer are held in a contribution account for investment within the MPF scheme selected by the employer (i.e. the original scheme). When an employee changes jobs, they have three alternatives in dealing with their accrued benefits (i.e. the accumulated contributions and investment returns) held in the contribution account under the original scheme:

• transfer the accrued benefits from the contribution account in the original scheme o a personal account in any other Master Trust Scheme or Industry Scheme of the employee’s choice;
• retain the accrued benefits in the original scheme under a persona account (this option does not apply to members of Employer-sponsored Schemes on changing employment); or
• transfer the accrued benefits from the contribution account in the original scheme to the contribution account in the scheme of the new employer.  

Withdrawal of accrued benefits

Since the MPF system was introduced to help the workforce save for old age, withdrawal of accrued benefits is only allowed when a scheme member reaches retirement age at 65 year, as stipulated in the MPFSO.

However, there are circumstances under which accrued benefits may be paid before a scheme member reaches the age of 65 years, provided that the following specified conditions can be met:

• early retirement at the age of 60;
• permanent departure from Hong Kong;
• total incapacity;
• a small balance account of HK$5,000 or less and no contributions have been made to an MPF scheme for twelve months; or
• death.

Residence and Visa issues for Hong Kong

There are various different ways to become Hong Kong Resident. The Principal ones are set out below. It is advisable to hire the services of professionals to handle the application on your behalf.

Hong Kong Entrepreneurs Visa

The Entry for Investment visa scheme is for foreign entrepreneurs who wish to operate their own business in Hong Kong. It is essentially a type of work permit that is issued to the owner of a Hong Kong business, that permits the individual to be an employee of that Hong Kong Company.

One of the main criteria is whether the applicant is able to prove that the business will make a significant contribution to the economy of Hong Kong. The entrepreneur visa is generally issued for an initial two-year period and is renewable thereafter as long as the business remains viable.

Eligibility Criteria

An applicant under this scheme must have no criminal record, meet the security requirements of Hong Kong, and provide evidence of a good educational background, ie a degree in the relevant field, good technical qualifications, relevant professional abilities, achievements and experience.

In addition, the applicant must be able to demonstrate that they will make a substantial contribution to the economy of Hong Kong through the creation of jobs for the local workforce, the use of the services of local service providers, suppliers, manufacturers etc. and that the company will make a contribution in the specific market that it is entering.

Investment Requirements

There is no minimum investment requirement. However, at the time of processing the application, the authorities will closely examine the proposed business plan to assess if the proposed investment is sufficient to set up the business. The applicant must ensure that the proposed investment covers the start-up and operational expenses of the business for at least the initial 3-6 month period.

Timeline

The time taken to process the application is about 4-6 weeks.

Hong Kong Employees Visa

Hong Kong has a special work permit scheme for hiring skilled foreign employees, Employment for Professionals.

Eligible applicants must have good educational qualifications and possess special skills, knowledge or experience of value, that are not readily available in Hong Kong. There is no quota system limiting the number of work visas under this scheme. Each application is assessed on the qualifications of the applicant and the employing company.

This type of work permit is normally issued for one year period initially and renewable thereafter.

Eligibility Criteria

An applicant under this scheme must have no criminal record, meet the security requirements of Hong Kong, and provide evidence of a good educational background ie a degree in the relevant field, good technical qualifications, relevant professional abilities, achievements and experience.

It is a requirement of the scheme that there is a genuine employment vacancy at the employing company which cannot be filled from the local workforce. The applicant must have a confirmed employment offer and the job matches the applicant’s academic qualifications or work experience. The applicant’s remuneration package, including income, accommodation, medical and other benefits is in line with the prevailing market in Hong Kong.

If the employing company is a new company, set up within the last 12 months a detailed business plan must also be provided.

Timeline

The application is processing in about 4-6 weeks. Most work permit visas under the Employment for Professional’s Scheme are issued for a one-year period.

Change of Employment

The work permit that is issued is tied to a specific employer and is not transferable. To change jobs, the applicant must first obtain approval by filing “Application for Change of Employment” with the Immigration Department.

Dependant Visa for Family

Individuals who hold a valid Hong Kong visa (ie Entrepreneurs Visa, Employment Visa and Permanent Visa) can apply for a Dependant Family Visa to bring their immediate family members into Hong Kong. A dependant family member is limited to the applicant’s spouse and unmarried dependant children under 18 years of age and allows the holder to take up employment or study in Hong Kong. The Dependant’s Visa is tied to the principal visa holder’s stay in Hong Kong. 

Permanent Residence

An individual, who has resided in Hong Kong for a continuous period of at least seven years, is eligible to apply for Permanent Residence, commonly referred to as a “Right of Abode” in Hong Kong.

RBA can assist you with your visa requirements in HK here.

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RUNNING

Business Location and Incentives in Vietnam

Vietnam Singapore Industrial Park (VSIP)

Singapore’s experience as a city-state economy has served a role model for many developing countries. Vietnam Singapore Industrial Park (VSIP) is a high standard industrial park initiated by the government of Singapore and Vietnam on the basis of infrastructure and industrial cooperation.

The first Vietnam Singapore Industrial Park (VSIP) is located in the Binh Duong province in South Vietnam and was established in 1996.   Since then, the following VSIP parks have been established with the concept remodelled from a traditional industrial park to an integrated township and industrial park.

• VSIP I Binh Duong  Province (1996)
• VSIP II Binh Duong Province (2006)
• VSIP Bac Ninh Province (2007)
• VSIP Hai Phong City (2010)
• VSIP Quang Ngai Province (broke ground in Sept 2013)

With the environmental infrastructure in place, VSIP parks have attracted more than 23 foreign investors to set up their operations in Vietnam.  In addition, the Vietnamese government has provided investment incentives for different VSIP parks. This includes corporate and personal income tax reduction for certain years.

If required, RBA has the experience and expertise to project-managing your Vietnamese company setup in your preferred VSIP Park. 

Should you require any further information or have any inquiries, please do not hesitate to contact us.

Annual accounting requirements in Vietnam

All enterprises operating in Vietnam are required to apply the Vietnamese Accounting Standards and Systems (VAS). The VAS applies to all private Vietnamese companies as well as state-owned companies.

The basic set of financial statements prepared under VAS is comprised of (i) balance sheet, (ii) income statement, (iii) cash flow statement and (iv) notes to the financial statements.

Company financial statements must be prepared and audited annually. After that, the audited financial statements are required to be filed with the Provincial Tax Office, Ministry of Planning and Investment and General Statistics Office. Audited financial statements have to be filed within 90 days after the financial year end.

For a newly registered company, if the period from the incorporation date to the nearest financial year end is less than 90 days, such period will be included in the following reporting year.

Companies need to engage a licensed independent audit firm (no later than 30 days before the financial year end) to sign off audit engagement contracts.

Vietnam is expected to adopt International Financial Reporting Standards (IFRS) in 2017 in its efforts to improve transparency and increase comparability. It is planned that between 2017 and 2020, some IFRS standards will be chosen to be used in practice, and then will become applicable for some companies from 2020. From 2023 to 2025, all Vietnam firms will have to apply these new standards.

Corporate Income tax in Vietnam

Vietnam Corporate Income tax is applicable to Limited Liability Companies, Joint Stock Companies and Commercial Branches that generate profits.

The standard corporate income tax is 20 % as from 1 January 2016.  Companies engaging in the exploration of oil and gas and mineral resources are subject to tax rate ranging from 32% to 50%.

Corporate income tax can be reduced where the investment is made in regions with difficult socio-economic conditions and investment in certain qualified industrial parks. Such investments qualify for tax incentives (e.g. corporate income tax reduction, corporate income tax holidays) and their availability depends on the region of incorporation and business activities.

Company losses may be carried forward for up to 5 years to offset against taxable income.

Withholding tax in Vietnam

For Corporate Income Tax in Vietnam, the following non-treaty rates will apply:

• Dividends paid by a company in Vietnam to its corporate shareholder are not subject to tax, this includes dividends remitted overseas. However, a 5% withholding tax is imposed on dividends paid to individual.
• Royalties and license fees paid to a non-resident are subject to a 10% withholding tax.
• Interest paid (e.g. loan from foreign entities) to a non-resident is subject to a 5% withholding tax.
• Payments for most services are subject to 5% withholding tax.

It is important to note that a further deduction at source, for Value-Added Tax, can be applied to some payments from overseas contractors. For instance, the supply of most of the services to an overseas contractor will be subject to a VAT rate of 5% which will be deducted at source by the Vietnamese party.  

Value Added Tax (VAT) in Vietnam

VAT is levied on the sale of goods and the provision of services in Vietnam. The standard VAT rate in Vietnam is 10% which applied to most goods and services. However, a reduced rate of 5% VAT is levied on certain goods and services in the farming, healthcare, media, technical and scientific categories.

Goods and services provided directly to foreign companies are subject to 0% VAT if they are consumed outside Vietnam or in non-tariff areas. Also, certain agricultural products, medical services, printing and publishing and foreign currency trading are exempted from VAT.

Companies in Vietnam are expected to register for VAT immediately upon receiving a business licence.  Currently, there is no VAT registration threshold.

Monthly filing and payment of VAT must be made by the 20th day of the following month.

Personal Income tax in Vietnam

Generally, Vietnamese residents are taxed on their worldwide income, while non-residents are taxed only on Vietnamese sourced income.

Employment income of residents is taxed progressively, at rates ranging from 5% to 35%. For non-residents, a flat rate of 20 % is applied.   

Non-employment income (e.g. dividends and capital gains from securities trading) is taxed at rates, ranging from 0.1% to 20%, which apply to both residents and non-residents. 

Vietnam Double Tax treaty network

Vietnam has concluded a significant number of Double Tax Treaties (“DTA”). These treaties effectively eliminate double taxation through identifying exemptions or reducing the amount of taxes payable in Vietnam.

As of March 2016, Vietnam has signed Double Taxation Agreements with more than 60 countries, including G8 countries including France, UK, Canada, Germany, Italy, Japan. 

Australia – Austria – Azerbaijan – Bangladesh – Belarus – Belgium – Brunei – Bulgaria – Canada – China – Cuba- Czech Republic – Denmark – Egypt – Finland – France – Germany – Hong Kong – Hungary – Iceland – India – Indonesia – Ireland – Israel – Italy – Japan – Korea Republic – Kuwait – Laos – Luxembourg – Malaysia – Mongolia – Morocco – Myanmar – Netherlands – New Zealand – Norway – Oman – Pakistan – Palestine – Philippines – Poland – Qatar – Romania – Russia – Saudi Arabia – Seychelles – Singapore – Slovakia – South Korea – Spain – Sri Lanka – Sweden – Switzerland – Taiwan – Thailand – Tunisia – UAE – UK – Ukraine – Uzbekistan – Venezuela

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My Business Asia is the best offer to help you for your accounting, corporate services, business set up, company incorporation,corporate services, business structure and tax management, in Vietnam, Thailand, Hong-Kong and Singapore

The post RUNNING – My Business in Vietnam appeared first on MyBusiness in Asia.

RUNNING

RBA Services – Malaysia

RBA can help you to run your business in Malaysia.

We can assist you with:

• ongoing regulatory and licencing matters in Malaysia;
• employment issues in Malaysia;
• contractual assistance ( Trade contracts, terms and conditions, employment agreements, royalty agreements, loan agreements shareholders agreements) in Malaysia; 
• IP registration in Malaysia.

Any further inquiries, please contact us.

Running my business in Malaysia

There is a famous Chinese Proverb “创业难，守业更难。”. It means “keeping is harder than winning”.

Apart from being concerned with sustainable and profitable corporate development, business operators should regularly check and balance the long-term interests of the company, shareholders and stakeholders, especially employees. The management should maintain and promote good corporate governance in the company. The topics related to “Accounting & Reporting Standards”, “Business Taxes”, “Internet and E-commerce”, “Employee Rights in Malaysia”, “Personal Data Protection”, “Intellectual Property Rights” and “ Commercial Issues – Small Claims” are also important for running the business in Malaysia. 

Accounting requirements in Malaysia

Legal requirements, accounting standards, penalties and sanctions:

Accounting and other records in Malaysia
Section 167 of the Companies Act 1965 requires every company and its directors and managers to keep such accounting and other records so as to explain the transactions and financial position of the company. The accounts must show a true and fair view of the company’s financial position to enable financial statements to be conveniently and properly audited.

All transactions must be recorded within 60 days of completion. These accounting and other records must be kept at the company’s registered office in Malaysia. The records are to be retained for seven years.

Financial Reporting Framework in Malaysia
The Malaysian Accounting Standards Board (MASB) approved accounting standards comprise:

• Malaysian Financial Reporting standards (MFRS) ;
• Financial Reporting Standards (FRS) ;
• Malaysian Private Entities Reporting standards (MPERS) 

MASB has issued the MFRS framework, which are equivalent to the International Accounting Standards Board for entities other than private entities, for the year commencing on or after 1st January 2012.

Only private entities can apply the PERS or MPERS standards. A private entity is defined as a private company, incorporated under the Companies Act 1965.

Private entities apply the MPERS for financial statements for the year commencing on or after 1 January 2016.

Financial statements and Audit Requirement
Directors of a company must present financial statements to the shareholders in a general meeting within 18 months of incorporation and, subsequently, at least once in every financial year at intervals of not more than 15 months. The financial statements must be prepared in accordance with approved accounting standards by MASB, and the provisions of the Companies Act 1965 and audited by an approved auditor. All amounts shall be presented in Ringgit Malaysia (“RM”).

An approved auditor must be a member of the Malaysian Institute of Accountants (MIA) under the Chartered Accountant category, for at least one year and hold an audit license issued by the Minister of Finance. The audit is conducted in accordance with the Malaysian approved audit standard which is based on the International Standards of Auditing (ISA).

First auditors are usually appointed by the directors of a company and thereafter by the shareholders at each annual general meeting (AGM) to hold office until the next AGM.

Governance for Malaysian Companies

Malaysian Code on Corporate Governance 2012 (‘MCCG 2012’) is specifically directed at companies listed on Bursa Malaysia. All companies are encouraged to adopt the principles and recommendations of MCGG 2012 and make good corporate governance an integral part of their business dealings and culture.

Roles and responsibilities of the board of directors
The board is required to formalize ethical standards through a corporate code of conduct and ensure the company’s strategies promote sustainability. It is also expected to formalize a board charter.

Composition of the board 
The board should establish a Nominating Committee, chaired by a senior independent director, to oversee the selection and assessment of directors.

The Nominating Committee is responsible for the development of a set of criteria, including policies formalizing its approach to board diversity.

Independence of independent directors
Independent directors can be appointed for no longer than a cumulative period of nine years. After nine years, such directors can be re-designated as non-independent directors or, in exceptional circumstances, a director can continue as an independent director subject to obtaining shareholder approval.

Separation of the roles of Chairman and CEO
The position of Chairman and CEO should be held by different individuals and the chairman must be a non-executive board member. If the Chairman is not an independent director, the board should comprise a majority of independent directors.

The Chief Executive Officer of the company (‘CEO’), may or may not be a member of the board. The responsibilities of the Chairman include leading the board oversight of management, while the CEO will focus on the business day-to-day management of the company. The division of responsibilities should be clearly defined in the board charter. Listed companies that do not comply with any of the recommendations of MCCG 2012, including the separation of chairman and CEO roles, must state the reasons and justification in the annual report.

Commitment of directors
The board is required to set out expectations on time commitment for its members and protocols for accepting new directorships. Directors should notify the chairman before accepting a new directorship. Such notification should include an indication of time commitment expected of the new appointment. The Nominating Committee should take cognizance of such new appointment in its annual assessment of directors.

Relationship between company and shareholders
The board should encourage shareholder participation at general meetings and voting on resolutions by poll. The chairman should inform shareholders of their rights to demand a poll at the commencement of a general meeting.
The board is encouraged to put substantive resolutions to a vote by the shareholders and announce the results including the number of votes cast for and against each resolution.

Business taxation in Malaysia

Corporate Income Tax

• Resident company (other than SME as below) YA 2009-20015 25 % – YA 2016 24 %
• Resident company –Small and Medium Enterprise YA 2009-20015 20 % – YA 2016 19 %
• Non-resident company/ Branch YA 2009-20015 25 % – YA 2016 24 %

A Small and Medium Enterprise is a company which fulfills the following three requirements:

• A paid-up capital of MR 2.5 million or less (approx. USD 575,000)
• does not control, directly or indirectly, another company that has paid-up capital of more than MR 2.5 million, and
• is not controlled, directly or indirectly, by another company that has paid-up capital of more than MR 2.5 million

Corporate residence
Generally, a company is tax resident in Malaysia in a basis year if, at any time during the basis year, the management and control of its affairs are exercised in Malaysia.

Permanent establishment (‘PE’)
Generally, a non-resident entity is regarded as having a PE in Malaysia if it has a fixed place of business in Malaysia, where the business of the entity is carried on in whole or in part.

Taxable Income and Gains
The sources of income that are subject to corporation tax in Malaysia include the following:

• Gains and profits from any trade, business, profession or vocation ;
• Dividends, interest and discounts ;
• Rents, royalties and premiums ;
• Pensions, annuities and other periodic payments ;

Taxation of Dividends
From 1 January 2008, the imputation system was replaced by a single tier system taxation. Under the single tier system, tax on a company’s profits is a final tax and all dividends paid by the company are exempt in the hands of shareholders.

Withholding Taxes
Non-treaty rates are the following:

• Royalties : 10%
• Management fees : 10%
• Technical services fees : 10%
• Interest : 15%
• No withholding tax on dividends

Where the recipient is resident in a country which has a double tax treaty with Malaysia, the tax rates for specific income, may be reduced, depending on its source.

Malaysia Double Tax Treaty Network

Malaysia has entered into a significate number of Double Tax Treaties (“DTA”), the aim of which is to eliminate double taxation issues and provide reduced rates of withholding tax on dividends, interest and royalties. Most of Malaysia’s DTAs are based on the OECD model, which determines the rights to tax different categories of income, allocated to each signatory country. In addition, most Malaysia’s DTAs contain exchange of information provisions, inspired from the OECD model.

To enjoy the benefit of Malaysia’s DTAs, a tax residence certificate issued by the tax authorities of the country where the recipient is a resident, shall be submitted to the Malaysian tax authorities.

As of December 2015, Malaysia has entered into 74 DTAs, with the following countries:

Albania – Australia – Austria – Bahrain – Bangladesh – Belgium – Bosnia & Herzegovina – Brunei – Canada – Chile – China – Croatia – Czech Republic – Denmark – Egypt – Fiji – Finland – France – Germany – Hong Kong – Hungary – India – Indonesia – Iran – Ireland – Italy – Japan – Jordan – Kazakhstan – Kuwait – Kyrgyzstan – Laos – Lebanon – Luxembourg – Malta – Mauritius – Mongolia – Morocco – Myanmar – Namibia – Netherlands – New Zealand – Norway – Pakistan – Papua New Guinea – Philippines – Poland – Qatar – Romania – Russia – San Marino – Saudi Arabia – Senegal (P) – Seychelles – Singapore – Slovakia (P) – South Africa – South Korea – Spain – Sri Lanka – Sudan – Sweden – Switzerland – Syria – Taiwan – Thailand – Turkey – Turkmenistan – United Arab Emirates – United Kingdom – Uzbekistan – Venezuela – Vietnam – Zimbabwe

(P): DTAs with Senegal and Slovakia are still pending, awaiting ratification.

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My Business Asia is the best offer to help you for your accounting, corporate services, business set up, company incorporation,corporate services, business structure and tax management, in Vietnam, Thailand, Hong-Kong and Singapore

The post RUNNING – My Business in Malaysia appeared first on MyBusiness in Asia.