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1. Geographical location and territory

2. Overview of the economy

3. Setting up a company in the US vs Setting up a company in Singapore

4. Conclusion

1. 1. Geographical location and territory

Comparative factor The USA Singapore
Area ​​A large country with diverse ethnicity, its geographical location is extremely favorable for international trade and commerce. An island country with advantages in economic and political stability, transportation, international trade by sea and air.
Population 333,3 million (As of September 2021) 5,9 million (As of September 2021)
Geographical location Located in the Americas, bordering Canada and Mexico. Located at the heart of Southeast Asia.

2. 2. Overview of the economy

To better understand the differences, both advantages and disadvantages, when setting up a company in Singapore verse setting up an Offshore company, please refer to the table below:

Comparative factor The USA Singapore 
General characteristics of the economy 

The United States is one of the largest economies in the world and plays an important role in the global market. Any change to the US economy affects the world economy.

 

  • Ranked #2 in the world by World Bank for ease of doing business in 2020.
  • Ranked as 2nd best country for its Intellectual property protection in WEF’s Global Competitiveness Report 2014 – 2015 report.
  • Ranked #2 in the world by IMD World Digital Competitiveness Ranking for digitally competitive countries in 2020

The US is one of the largest consumer markets in the world. Out of the 500 largest companies in the world, 134 are based in the US.

Singapore’s location in Asia is extremely favorable. Singapore’s main economic activities are trading and services. They account for 40% of national income.

Law system

The legal system consists of federal and state laws (each state has their own laws and regulations). Therefore, you need to identify the state in which you want to open a company and study the legal system there.

Singapore's legal system is based on British Common Law. Thanks to its clear and concise legal system, Singapore is the only Asian country in the top 10 countries with highest score in the Law Index of the World Justice Project 2016.

Quality of labor resources Thanks to sound economic policies and strong education systems, both Singapore and the US both have a strong, highly skilled workforce. In the US, one in three people has a bachelor's degree or higher on average, while in Singapore, 54.6% of Singaporeans are awarded with a university degree.
Main language  English

 

3. 3. Setting up a company in the US vs Setting up a company in Singapore

For a clearer comparison of conditions applicable to investors, please see the table below.

Comparative factor The USA Singapore 
Company type 

You can consider the following 3 main types of company:

  • Corporation (C-Corporation)
  • S-Corporation (Small corporation)
  • Limited Liability Company.

In particular, limited liability company (LLC) is considered the most common business structure for individuals or businesses who want to have the maximum protection from the law, strong corporate governance procedures and flexible, simple tax payment procedures.

If you want to expand your business in Singapore, you can choose from the following types of business structures:  

  • Sole-Proprietorship (one owner) or Partnership (two or more owners)
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)
  • Company

Of which, opening a private limited liability company (PTE. LTD.) is the most common option. This business structure is flexible, capable of scaling up and taking full advantage of government incentives for businesses.

In addition, you can also consider establishing a representative office and a branch in the US/Singapore. For more details about the process and procedures for setting up a company, branch, or representative office in the US and Singapore, please contact Global Links Asia Consulting at (+65) 3163 4102 for direct advice.
Incorporation process

Fast, simple.

Special: You are not required to be present in the US during the establishment of the company.

Fast, simple.

Special: You are not required to be present in Singapore during the establishment of the company.

Company registration time 1-2 business weeks depending on the state. 2-3 working days.
Corporate income tax

Federal corporate income tax ranges from 15% to 35% in cases where taxable income exceeds $335,000. In addition, each state and locality may levy an additional tax of 0 - 12%.

Corporate tax rates in the US vary depending on the state in which you choose to establish your company.

The general corporate income tax rate is 17%. For newly established enterprises, in their first 3 years of incorporation, they will receive the following tax incentives:

  • For the first 100,000 SGD of their profit, companies pay 4.25% tax.
  • For the next 100,000 SGD in profit, companies pay 8.5% tax.
  • For 200,001 SGD and above in profit, companies pay 17% tax.

The tax system in Singapore may change from time to time. We've made it easy for you by providing a simple and straightforward tax calculator. Simply enter your gross income and we'll do the math for you with the most up-to-date data!

Note: Singapore corporation tax incentives for the first three years after incorporation are subject to change each fiscal year. Please contact Global Link Asia Consulting for the most updated information.  

Personal income tax

In the United States, federal personal income tax is progressive up to 39.6% of taxable income. While tax for programs of federal social insurance (e.g. social security, health insurance for people with low income, health insurance for retirees) are taxed separately in each state.

In Singapore, personal income tax is progressive up to 22% of taxable income.

Dividends distributed to shareholders (after paying corporate income tax) will not be subject to personal income tax.

Time required to open a bank account

Modern banking system.

The account holder is required to be present in person at the US bank to carry out the account opening procedure. To travel to the US, business owners of some countries will have to apply for a Visa.

Asian Financial Center.

On average, it takes about 14-22 working days to get a physical business account in Singapore. The process may take longer, depending on how the bank evaluates your company’s application.

The account holder is no longer required to be present at a Singapore bank to carry out the account opening procedure.

 

4. 4. Conclusion

Recently, the US has gradually tightened policies on immigration, investment, corporate income tax, and personal income. Meanwhile, Singapore still offers favorable investment and tax policies to attract foreign investors and is becoming a better destination for businesses.

However, the US has always been the "promised land" because it is the world's number one economy, has high-quality human resources, and has a large domestic market. On the other hand, being in the center of Asia, Singapore is an extremely convenient location for entrepreneurs to invest, do business and enter the ASEAN or Asian markets.

Therefore, based on the needs of each business, owners can choose Singapore or the US (or both) to invest and set up a company in the most appropriate and accurate way. Not sure which country to go to or how to calculate your taxes? Want to make a better decision? Let our team of professional consultants help you with every aspect of your next international move. Contact Global Link Asia Consulting now! 

Global Links Asia Consulting Company - a consulting firm specializing in offering ONE-STOP solutions for every business at every level of your business development - is ready to support your business with the following services:

  • Overseas incorporation consultancy services (especially in Singapore, Hong Kong (China), the USA, BVI, Seychelles, etc.)
  • Opening bank accounts consultancy services in Singapore (for Personal and Business Account)
  • Tax - Accounting consultancy services (in Singapore, Hong Kong (China), etc.)
  • QuickBooks Online consultancy services (Training and Licensing)
  • Register international phone transfer in Singapore, the United States, EU, etc.
  • Payment solutions consultancy services (support to open PayPal Business account, register for PayPal Pro, etc.)

With our one-stop solutions, we pride ourselves on being a trustworthy partner - working directly with major notable banks such as OCBC, DBS, UOB, Standard Charter Bank, ANZ, etc and international payment gateways such as PayPal and many other partners. With many years of experience working in this industry and having supported many companies, Global Link Asia Consulting are confident to bring the best quality of our services to all clients.

Contact us now:

  • Vietnamese Hotline(+84) 0938 531 588 (Call/ Skype)
  • Singaporean Hotline: (+65) 3163 4102 (Call)
  • Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

This article was written by Global Link Asia Consulting Pte. Ltd. and was first published on https://www.globallinkconsulting.sg/ on 07th October 2021. Its copyright belongs to Global Link Asia Consulting Pte. Ltd. All rights reserved. You may not, except with our express written permission, copy, modify, commercially distribute or exploit the content.

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