Incorporation

Which location is better to incorporate, US or Singapore? This is for a decision analysis company

Ajith Govind Founder at Dextro Analytics Inc.

August 7th, 2015

We are in the process of setting up our decision analysis company. The main target market is US/Canada, our angel investor is in Singapore. He says Singapore is a better place to incorporate. Is this true? What are the various factors to consider?

Mike S Director at Vector Analytics

August 7th, 2015

It would make more sense to set up the holding where you plan to open the office. If your target is U.S. for which you will need office, then it does not make sense to open a office and holding in Singapore.

Betty raised a good point on tax which is one of the criterion among many. 

Anton Yakovlev Founder of four successful businesses on two continents who can help you do the same

August 9th, 2015

Wherever you customers are. Being as close to your customers as possible is a key to my mind. You could also incorporate both in US and Singapore. And probably get some tax benefits, depending on your business structure.

If you need someone to represent you in US we could talk. Feel free to connect. I'm always ready to help.

BETTY DAVIS

August 7th, 2015

Singapore unless you need to have an office there in which case the rent is more expensive than NY. I would need more specifics but solely taxation wise definitely Singapore. Sent from my iPhone

Benjamin Olding Co-founder, Board Member at Jana

August 8th, 2015

+1 Mike: if you operate out of the US, it's pointless to incorporate in Singapore: you'll just have to file tax forms twice (regardless of where you incorporate, you also have to file where you operate).

If you operate out of Singapore, then just incorporate there.

If you operate out of a 3rd country, you likely have to incorporate there.

Until you have income from multiple countries (and large earnings), filing taxes in multiple countries is not a good idea: incorporate where you operate.

As an aside, your investor is correct - Singapore is probably the easiest place in the world to be compliant in.  This is not the right way to choose where to incorporate however.

Judit Fabian Seasoned Finance Professional

August 8th, 2015

I have gone through this decision tree a year ago. I moved to Singapore a couple of years ago and wanted to understand where it would be better to set up my venture. I would agree with the opinions on setting up where your market is. There are a few things to consider which might seem trivial, but could present quite a burden when you are trying to focus on getting your company up and running.
Singapore is simple incorporate in, however, it is quite another thing to maintain your company there. There are all sorts of structures that you have to have in place that will drain your budget and time. If you are not operating in Singapore, you can fall into bureaucratic categories that can lead to undesired outcomes.
If you have your market in the U.S., you will have to hire people there, and you have to have management capacity there, so you have to have an entity there anyway. Also, are you the resident/citizen of SIngapore? If you are not a U.S. citizen and try to employ yourself in the U.S., then you might want to set up the Singapore entity at the beginning as it is not trivial also to get work visas in the U.S.
Incorporating in the U.S. also has a number of issues associated with it.
I don't have enough information about your situation to give further comments, but I am happy to have a call to share with you my experiences running entities in both countries.

Ajith Govind Founder at Dextro Analytics Inc.

August 9th, 2015

Hello Judit, Many thanks for your reply. Sure, would love to have a call. Please let me know.

Daniel Winters International and Bitcoin Tax Compliance

August 9th, 2015

I'm a US tax accountant with background in international.  If you will be doing business in the US, you need a company incorporated in the US.  There are several choices regarding the type of US company to incorporate.  The tax situation for the company and its owners will vary depending on the type of company which you choose.  The company will have US source income and need to file tax returns at the national, federal level and for each state in which the company does business. 

From the US tax perspective, incorporating in Singapore does not matter as you need a US company to operate here and the US company will have US income and file taxes in the US. 

I would be happy to discuss further by phone or Skype.  

Daniel Winters +1-201-456-5081

Juan Zarco Managing Director, Silicon Valley Ventures Growth Partners llp

August 9th, 2015

I have been involved with both startup and large sized companies with international operations.  As corporate counsel and COO, I was exposed to many meetings with top tiered accounting/law firms and tax experts. The essential focus is to avoid high annual tax or fees in any jurisdiction uness it is unavoidable.  The key here is if the dominant market is North America, will it require building a "presence" in North America. WIll you require a sale office or software personnel in the U.S.?  You were not clear on that.  If that can be avoiced, then you can avoid paying U.S. taxes, etc.  On the other hand, your key investor wants you in Singapore.  I can understand that.  I want to make sure that my investment is being used effectively. Note you can have both: Singapore and the U.S., and based on the tax treaties, you can have an effective international operation. Note that publicly traded companies do the same: Western DIgitals main office is in Irvin CA, but its incorporation and holding conpany is offshre allowing it to have less than 10% tax rate. Since I myself have dealt with a lot of foreign subs, etc., it can be somewhat complicated. 

Thomas Sutrina Inventor at Retired Pursue Personal interrests and family

August 9th, 2015

I am just a simple engineer.  I would think that communist China a stone throw away from Singapore is a detraction.  F. A. Hayek describes the US and Europe as on, "The Road to Serfdom" in his book and Mark Levin tells us that the US is a "Ameritopia" in his book.  That to me tells me that neither place is very good.  I suggest you pick the most free, the citizens are the most free as the location you incorporate the business. 

Daniel Winters International and Bitcoin Tax Compliance

August 9th, 2015

Seems clear that founderdating dot com blocks phone numbers and email addresses. I'd suggest using LinkedIn instead.