Singapore for Digital Nomad business
A complete guide
- The Rise of Digital Nomad Businesses
- Advantages of Incorporating a Company in Singapore
- Overview of Business Structures for Digital Nomads in Singapore
- How to Start Your Own Company as a Digital Nomad in Singapore?
- Why Open a Separate Business Bank Account in Singapore?
- Tax Benefits for Non-Resident Digital Nomads in Singapore
- Setup and Yearly Maintenance Costs
- Visa Options
- Conclusion
The Rise of Digital Nomad Businesses
The concept of digital nomadism is becoming increasingly popular these days, thanks to advances in technology and changes in work culture that make remote work easy and accessible. Flexible hours, the opportunity to travel and a chance to experience different cultures while working are attracting more and more professionals to this lifestyle. Companies and customers alike now value productivity over physical presence, making traditional offices less necessary.
Registering a company in Singapore is an attractive choice for digital nomads who are looking for an efficient business structure for dealings with their customers. With its modern infrastructure, a stable and supportive business environment, efficient government services and strategic location, Singapore offers the perfect combination of work and leisure, and remains the world leader in ease of doing business. The country is known as a global business hub with an excellent regulatory framework, transparency and political stability.
Why Choose Singapore for Digital Nomad Business?
Singapore is an ideal solution for digital nomads looking to establish a successful business in Asia or elsewhere. This country offers advantages that make it one of the best choices for international business. At the same time, Singapore is not a tax-haven where “anything goes” approach is adopted by the government. Due diligence is robust and aimed to secure Singapore as a top jurisdiction in terms of legal standards. This creates trust among customers, partners and investors, unlike other offshore territories such as the British Virgin Islands or Seychelles.
At the same time, Compliance processes are streamlined, and online portals from the Accounting and Corporate Regulatory Authority (ACRA) make filing and compliance easy. The banking sector offers convenient online solutions such as multi-currency accounts and global payment processing. A flat corporate tax rate of 17%, along with tax incentives, significantly reduces the tax burden for companies.
In addition, digital nomads do not have to worry about local taxes on income outside the country, resulting in significant tax savings or even 100% tax-free income for non-residents.
What Business Structure should Digital Nomads choose in Singapore
Private Limited Company
Due to the legal requirements that are set for the formation of businesses by foreigners, the only available form of the business vehicle for Digital Nomads in Singapore is a private company limited by shares (PTE LTD).
This structure provides several key advantages that are particularly beneficial for remote entrepreneurs:
- Limited Liability: As a separate legal entity, Pte Ltd protects its owners from personal liability for the company’s debts and obligations, which is crucial for minimizing personal risk.
- Professional Image: Operating as a Pte Ltd enhances credibility and professionalism, which can be advantageous when dealing with clients, investors and partners, particularly in a global business hub like Singapore.
- Tax Benefits: These companies enjoy attractive tax incentives, including a flat corporate tax rate, exemptions on certain profits and no capital gains tax. This can result in significant tax savings for digital nomads dealing with international income streams.
- Continuity and Succession: Unlike sole proprietorships and partnerships, a Pte Ltd has perpetual succession, meaning it can continue to exist even if the ownership changes, providing stability and longevity to the business.
How to Start Your Own Company as a Digital Nomad in Singapore?
Starting a business in Singapore as a digital nomad involves several straightforward steps. One of the first steps is registering the company name, followed by filing the incorporation documents with ACRA and opening a corporate bank account. Working with a professional service provider can make the entire process much easier and ensure that all local rules and regulations are met.
- Business Name Registration:
- Choosing a Name: Select a unique name for your company that adheres to ACRA’s guidelines. The name should not be identical to existing entities and must not be obscene, vulgar or copyright infringing names.
- Name Reservation: Digital nomads can choose and register a business name that complies with ACRA guidelines. Use the ACRA BizFile+ portal to check the availability of your chosen name and reserve it. This name will be held for 120 days.
- Incorporation Documents Submission:
- Required Documents: Prepare the necessary documents, including the company name, business activities and SSIC code, shareholders’ details and Know-Your-Client (KYC) information, directors’ details, registered Singapore business address, share capital details and company constitution.
- Filing with ACRA: Submit these documents through the BizFile+ portal. The incorporation process typically takes 1-2 days if all documents are in order.
- Engaging a Professional Service Provider:
- Why Use a Service Provider?: Foreigners need to contact a Registered Filing Agent (RFA) who can streamline the incorporation process and ensure compliance with local regulations. These professionals will represent clients before ACRA and help them gather the necessary documentation.
- Complying with Local Regulations:
- Registered Office Address: Ensure your company has a registered office address in Singapore. This address must be operational and accessible during regular business hours.
- Company Secretary: Appoint a company secretary within six months of the company being registered. They will be responsible for the management and timely filing of the required compliance documents.
- Annual Filings: Keep track of your company’s statutory obligations, including annual returns and tax filings. Failure to comply can result in penalties.
Why Open a Separate Business Bank Account in Singapore?
Opening a separate business bank account is not only a mandatory requirement but also a key step for digital nomads in Singapore. This step ensures the necessary legal and regulatory compliance while avoiding potential legal complications.
Firstly, it ensures legal and regulatory compliance. In Singapore, as in many other jurisdictions, businesses are required to maintain separate financial accounts from personal accounts. Failure to do so can result in serious compliance issues and potential legal consequences.
Secondly, separating business and personal finances simplifies financial management. Tracking business income, expenses and profits becomes more structured, which is a key element of effective budgeting and financial planning. Thanks to clear separation, tax reporting becomes simpler and more convenient, which reduces the likelihood of errors and the risk of possible fines or audits.
Thirdly, it provides access to a wide range of business banking services for those customers who have long-standing and time-proven relationships with the bank. These include business loans, lines of credit and other forms of financing needed to grow your business and manage your finances effectively. Specialized services for merchants are also offered, such as payment processing needed to accept credit card payments and online transactions.
Furthermore, the professional financial tools provided by banks in Singapore will help streamline your operations. These tools include integration with accounting software, payroll services, financial advice and advanced cash management solutions such as automated payments and multi-currency accounts.
Can I open a banking account in Singapore remotely?
Yes, absolutely. The good news is that nowadays there are multiple banking options available for Singapore-registered companies.
There are two new fully regulated digital banks:
- WorldFirst (https://www.worldfirst.com/). They provide accounts in Singapore dollars, USD, Euro and other currencies.
- Anext Bank (https://www.anext.com.sg). They provide accounts in Singapore dollars and USD.
Besides, there are multiple online banks like Aspire, Airwallex, Wise and more. We recomend reading our article about the Best Online Banks in Singapore here:
All these financial institutions open accounts online and provide the ability to transact with companies and individuals all over the world.
Also, there are online payment platforms like Stripe and PayPal that can be connected to your company’s online bank account and enable you to collect credit card payments from your customers.
Want to know how much tax your company will pay?
Use our Corporate Tax Calculator to instantly calculate how much tax your company will pay depending on the net profit:
Click HereTax Benefits for Non-Resident Digital Nomads in Singapore
Singapore offers one of the most competitive corporate tax regimes globally, with a standard corporate tax rate of 17%. Thanks to various tax incentives and discounts, small and medium-sized enterprises (SMEs) can take advantage of even more favorable conditions and reduce this rate.
Tax Exemptions and Incentives
New companies can benefit from the Startup Tax Exemption (SUTE) scheme, which offers significant tax exemptions on the first S$100,000 of chargeable income for the first three years. Beyond the startup phase, the Partial Tax Exemption (PTE) scheme continues to provide reductions on a portion of chargeable income, further lowering the effective tax rate. We have an article describing Corporate Tax in Singapore here.
No Capital Gains Tax
Singapore does not impose capital gains tax, meaning profits from the sale of assets, investments or shares are not taxed.
No Withholding Tax on Dividends
There is no withholding tax on dividends paid by Singapore-resident companies, allowing digital nomads to return profits to their home country without incurring additional tax liabilities.
Territorial Tax System
Singapore taxes only income sourced from within the country. For digital nomads, this means that income earned abroad is not subject to Singaporean tax, providing significant savings.
Extensive Double Taxation Agreements (DTAs)
Singapore has over 80 DTAs with various countries, preventing double taxation on income earned in multiple jurisdictions. These agreements ensure reduced tax rates and relief on foreign-sourced income.
Comparison to Other Countries
In contrast to Singapore, many developed countries like the United States, Belgium and France have higher corporate tax rates, often between 25% and 30%, and may also impose capital gains tax and withholding tax on dividends. These countries typically have more complex tax regulations, making compliance more challenging and costly.
Setup and Yearly Maintenance Costs for a Digital Nomad Business in Singapore
It is important to remember that the setup and yearly maintenance costs for a digital nomad business in Singapore include government registration fees, mandatory annual filings and fees for corporate service providers. These expenses are necessary for legal compliance and may vary depending on the structure of your business and the service provider you choose. Keep them in mind when planning your business expenses in this country.
Setup Costs:
Company Incorporation Fees
- ACRA Registration Fee: The ACRA charges a one-time fee of S$300 (additional S$15 for the name) for registering a Pte Ltd.
- Corporate Service Provider Fees: Many digital nomads use the services of corporate secretarial firms to handle the incorporation process. These service providers charge between S$300 to S$1,000, depending on the complexity and level of service.
- Registered Office Address/Virtual Office Services: Since digital nomads often do not need a physical office, they can use virtual office services that provide a registered business address and mail forwarding. These services typically cost between S$150 to S$500 per year.
- Corporate Secretary Singapore law requires every company to appoint a corporate secretary within six months of incorporation. Corporate secretarial services usually cost between S$300 to S$600 per year.
Yearly Maintenance Costs
Annual Filing and Compliance
- Annual Return Filing: Companies must file an annual return with ACRA, which has a fee of S$60.
- AGM and Filing: Holding an Annual General Meeting (AGM) and filing the necessary documents with ACRA typically involves costs for preparing and filing minutes and resolutions. Professional fees for this service can range from S$200 to S$500.
Accounting and Bookkeeping
- Outsourced Services: Many digital nomads outsource their accounting and bookkeeping. Annual costs for these services range from S$600 to S$1,200, depending on the volume of transactions and complexity. At Intracorp, we offer convenient packages such as a Monthly Accounting package starting at S$100/month and an Annual Accounting starting at S$500/year.
Corporate Tax Filing
- Tax Preparation and Filing: Engaging a professional accountant or tax service provider to prepare and file corporate taxes can cost as low as S$200.
However, it is important to note that all filing fees listed above are usually included in the yearly company renewal package. So the company owners do not have to worry about the multiple ongoing charges. Instead, they just pay a yearly service fee which covers all the necessary attributes to maintain a Singapore company in good standing.
The setup and yearly maintenance costs for a digital nomad business in Singapore typically fall within the range of S$2,000 to S$3,000. These costs include company incorporation, virtual office services, corporate secretarial services, annual filing and compliance, accounting and bookkeeping and other miscellaneous expenses. The specific costs can vary based on the individual needs and complexity of the business, but Singapore’s transparent and business-friendly environment ensures that maintaining compliance and operational efficiency remains straightforward and manageable.
Visa Options for Digital Nomads Business in Singapore
For digital nomads looking to start a company in Singapore, incorporation can be done remotely without the need for a visa, facilitated by local service providers or corporate secretarial firms specializing in company formation. However, for those intending to reside and actively manage their business in Singapore, the EntrePass and Employment Pass (EP) offer suitable visa options.
The EntrePass is for talented foreign entrepreneurs who are ready to set up an innovative business. To obtain approval from the Ministry of Manpower (MOM), you must submit a viable business plan and have relevant entrepreneurial experience. The visa is initially valid for one year but can be extended upon achieving certain business goals.
The EP is for foreign professionals with job offers from registered companies in Singapore. This type of visa is also available for digital nomads running their own business. The EP requires a university degree, professional experience and meeting the minimum salary set by the MOM. It is usually valid for one to two years, with the possibility of renewal.
Conclusion
Setting up a digital nomad business in Singapore offers entrepreneurs unique opportunities in a dynamic and supportive environment. The country continues to attract international talent looking to thrive in the digital economy. It is a fantastic destination for digital nomads looking to start or grow their business. Setting up a company in this dynamic city-state has been made easy with a variety of business structures and streamlined processes. Enjoy low corporate tax rates, tax incentives and no capital gains tax to help maximize your earnings. Whether you choose to set up remotely or relocate here on visas such as the EntrePass or EP, Singapore offers unrivaled flexibility. Explore the opportunities that Singapore has to offer and watch your business thrive!
