As in previous quarters, the private limited company continued to be the most common business entity type set up in Singapore with 9,145 formations in the three months from April to June this year. This is followed by sole proprietorships with 5,433.
Just over 85 percent of the private limited companies, and nearly one-half of all new businesses formed in the second quarter of 2013, were incorporated as exempt private limited companies (EPCs), each of which has 20 or fewer individual shareholders (of which at least one holds at least 10 percent of its shares) and have simplified compliance requirements.
In addition, while Singapore's headline corporate tax rate is only 17 percent, tax exemptions also reduce the effective tax rate for small- to medium-sized companies significantly. EPCs, incorporated and tax resident in Singapore, are exempt from corporate tax on the first SGD100,000 (USD78,700) of their taxable income for the first three years after incorporation, while all Singapore resident companies are eligible for tax exemptions that reduce their effective tax rate to about 8.5 percent on taxable incomes up to SGD300,000 per annum.
In line, it was said, with Singapore's reputation as a trade and financial hub in the region, the top three industry sectors with the largest number of business formations were wholesale trade, financial services, and head office and management consultancy activities, while the British Virgin Islands, the United States, China, Japan and India were among the top investing countries in Singapore during the quarter.
