Advantages of Using Singapore as a Base to Manage ASEAN Investments

As ASEAN continues to integrate, and countries such as Cambodia, Vietnam and Indonesia continue to grow and attract attention from FDI investors, Singapore’s importance as the entry point for investment is likely to increase.

In this Q&A session, we speak with Richelle Tay, Head of Dezan Shira’s ASEAN business advisory services, on why Singapore is the best place to manage your ASEAN operations.

Why has Singapore risen as a destination for the management of ASEAN expansion?

With a low tax regime, business-friendly practices and a strong base of double taxation agreements (DTAs) between Singapore and ASEAN as well as the rest of the world, companies are increasingly seeking to establish their regional headquarters in Singapore as part of their larger ASEAN strategy.

Through various grants and incentives, the Singapore government is striving to cultivate an ASEAN-centric workforce and is encouraging companies in Singapore to do business with ASEAN through Singapore as a launch pad.

What are the benefits of investing in Singapore?

A myriad of factors contribute to making Singapore among the most attractive economies for investment in Asia.

Effective administration of regional operations, integrated supply chain and minimized tax obligations allow Singapore to easily outcompete traditional holding locations such as Malaysia and fellow ASEAN members alike.

Singapore’s taxation system is another primary reason why Singapore holding companies are the preferred choice. Subject to the conditions stipulated in the Foreign Sourced Income Exemption Scheme, all foreign sourced dividend incomes are exempted from tax in Singapore, which is favorable for investors to choose Singapore as a destination for ASEAN expansion.

What are the options for corporate establishment in Singapore?

Setting up a private company limited by shares in Singapore is the most effective option for administering operations throughout ASEAN, whilst other options such as representative offices, publicly listed companies, and branch offices are also available for foreign investors.The structure of the private limited company allows companies owners to maintain full control without being personally liable for the debts and losses of the company.

In addition, as Singapore operates on a one-tier dividend basis, dividends are tax free when received by the shareholders. A private limited company is also entitled to tax incentives and exemptions.