Written by Team Farallon
Hong Kong and Singapore share some similarities in their legal systems, as they are both rooted in the English common law tradition. Singapore’s regulations are renowned for their pro-business nature. The city-state consistently ranks high in ease of doing business indices. It’s known for its transparent, streamlined, and efficient regulatory framework. Contrastingly, Hong Kong presents a more laissez-faire regulatory approach.
Before the relocation, the exit process needs to be legally compliant. This may involve winding up, deregistration, or continuing the business in Hong Kong. Each option carries its own legal implications. For instance, winding up or deregistration necessitates settling outstanding debts, taxes, and contractual obligations.
When officially bringing your business into Singapore, the mandate that any foreign company wishing to establish a business must register with the Accounting and Corporate Regulatory Authority (ACRA) must be adhered to. Be prepared to submit requisite documents like your company’s constitution and details of shareholders and directors.
Foreign companies entering Singapore will have the option to register their entity based on business needs and long-term objectives. A breakdown of these options is as follows:
This systematic process includes reserving your company name, preparing the company constitution, appointing directors and a company secretary, issuing shares, and paying the registration fee.
All companies in Singapore must comply with statutory obligations under the Companies Act, such as holding annual general meetings, filing annual returns, and maintaining proper accounting records. These measures underscore the city-state’s commitment to robust corporate governance.
Depending on your business nature and industry, specific regulatory compliance may apply. For instance, businesses in finance, healthcare, or education have additional regulatory bodies overseeing them, such as the Monetary Authority of Singapore (MAS), the Ministry of Health (MOH), and the Ministry of Education (MOE), respectively.
As Singapore’s employment laws lean towards the protection of employees, an understanding of key employment law provisions, from contracts to terminations and employee benefits, becomes paramount in helping establish and situate your company comfortably in Singapore.
Singapore’s corporate tax structure is territorial-based, with a headline tax rate of 17%. Nevertheless, numerous incentives and tax exemptions are available for qualifying companies, effectively reducing the tax burden. Incorporating your company into Singapore involves taking on tax burdens – ensure that your company is structured to prepare for the changes in taxation.
Relocating your business from Hong Kong to Singapore, while complex, offers significant opportunities given Singapore’s favourable business environment and robust legal system. By adequately preparing and complying with the legal requirements of both jurisdictions, your business transition can be both seamless and successful.
As you embark on this journey, seek professional legal guidance when necessary.
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