In order to get an EntrePass one should deposit a business plan giving an account of the nature of the business. The EntrePass scheme is probably 3 to 4 years old. Business plans some years back were of any length but today one is limited to a maximum of 10 pages. Therefore, it is necessary that one's business plan reflects the intention to make his/ her business a fulsome success with absolute clarity.
A business plan is presumably evaluated either by SPRING or by MOM or by both and one should be conscious that both these agencies prefer employing the brightest that Singapore contains within itself. Thus, if one submits a business plan having financials not making any sense, the plan would probably be rejected.
A Good Business Plan:
While laying down a business plan the following should be kept in mind:
• Those who are trying to start a business should show corporate tax payments inclusive of their pro forma statements.
• One should demonstrate his/her skills in the business one wants to begin
• One needs to show his/her understanding on the financial matters and also on the market status and the products.
• Applicants' financial expenses along with the revenues should be consistent. A chart containing the details of the initial and the operational costs including a list of utilities, web sites, etc. must be maintained. If one intends to sell 20,000 widgets at $12, then his/her revenues should be $1,20,000.
• The applicant should demonstrate that he/she has enough capital to start the business and run it smoothly till it is not profitable. The Ministry of Manpower (MOM) sees not the bank deposit of an individual but if he/she has the necessary capital that might be required to cover him/her to profitability.
• If licenses and permissions are required to start up a business, one should have pre knowledge of the requirements.
• While writing a business plan, it is essential for the individual to realize that the only purpose of all this is to manage an EntrePass.
• If someone fails to format out a business plan for his/her own business it means that the person has a poor understanding of his/her business. The plan is something more than an exercise to get through an EntrePass. It reflects and defines out what one's business can and will do and how it shall operate in the near future.
The Tax system in Singapore is territorial. All the resident and non-resident companies of Singapore are taxed on the basis of the companies' net income. Income tax is charged simply on the income of the company and the dividend income that the shareholders receive from the companies is not in adherence to pay any tax. There is no system of capital gains tax in Singapore.
Corporate tax rates:
• No tax is applicable on the new companies in Singapore till they achieve 100k profits in the initial period of three years
• If the profits are around 300k the companies would enjoy around 8.5% tax.
• Companies' tax rate has been lowered to 17% recently.
There are some exemptions designed for small companies. They are:
Full Tax Exemption
If a company's income is around $1,00,000, only then is the full tax exemption granted to it. To qualify for this exemption a company in Singapore must:
• be incorporated in Singapore.
• be in that year a tax resident.
• not have shareholders more than 20 out of which at least 1 is an individual shareholder holding at least 10% shares pertaining to that year.
The companies failing to qualify for the above can go for partial tax exemption.
Partial Tax Exemption
This form of exemption is given only to the companies whose income is around $3,00,000. The tax rate is given below:
Amount of Income Tax Rate
First $10,000 4.5%
Next $2, 90,000 8.5%
If it exceeds $3, 00,000 17%
Corporate tax filling due date
Every company needs to submit a form called Form C giving the detail of its accounts and other necessary documents, maximum by 31st July of every year. Once submitted, it is not compulsory for the companies to request for the form again. The companies would receive it in the month of March every year.
Taxation for non-resident companies
Non-resident companies in Singapore do not enjoy the benefits of what is called the double tax treaties. If the foreign source income is not received in Singapore then these companies are not considered liable to income tax in Singapore.
Singapore is considered to be one of the cheapest countries for business. The cost of running a business here is lesser compared to other developed countries. Wages and other labour costs are quite low and this is one of the reasons why launching a business in Singapore is not expensive.
To start a business it is very important for an individual to have a complete idea of what the expenditure might be. Labour costs are one such major factor that helps in increasing or reducing the expense of a company. In Singapore the cost of employing a good number of labourers is not too high and is quite affordable thanks in large part to the influx of mainland Chinese, Filipinos and Indian Nationals on the island state in recent years.