| FOREIGN OWNERSHIP | | | | Coordinating Board (BKPM). Application processing |
| Singapore does not impose any restrictions on | | | | takes around 5 weeks, upon which the BKPM will |
| foreigners who wish to do business in the country. It | | | | issue an in-principle business license valid for 3 years. |
| allows 100% foreign ownership (i.e. shareholding) of a | | | | INCORPORATION TIMELINE |
| Singapore private limited company. In other words, | | | | Company incorporation in Singapore can be |
| foreign entrepreneurs do not need a local partner to | | | | completed in a record time of less than 24 hours, |
| register a private limited company in Singapore. The | | | | with minimal formalities. In Indonesia, it can take |
| company can engage in any lawful business activity. | | | | anywhere between 3-6 months to incorporate a |
| In Indonesia, the foreign entrepreneurs can set up a | | | | company. |
| foreign direct investment company with 100% | | | | ANNUAL FILING REQUIREMENTS |
| ownership but with the following restrictions: | | | | In Singapore, an Annual Return must be filed with |
| • The business activities are restricted to | | | | Companies Registrar and Income Tax Return with |
| only those that are open to foreign investment. | | | | the Singapore tax department each year. In minimize |
| • Within 15 years from the commencement | | | | the administrative burden on small companies; they |
| of commercial operations, the foreign shareholder is | | | | are exempt from filing audited accounts. |
| required to divest at least 5% of the shares to an | | | | In Indonesia, companies must submit Annual Return |
| Indonesian citizen or legal entity. | | | | along with audited annual accounts to the Companies |
| MINIMUM INCORPORATION REQUIREMENTS | | | | Registry. Income Tax Return along with audited |
| In Singapore, the minimum incorporation requirements | | | | accounts must be filed with the Indonesian tax |
| include: a local registered address; at least 1 local | | | | authority each year. |
| resident director (a Singapore Citizen, a Singapore PR, | | | | CORPORATE TAXES |
| or a foreigner holding a valid work visa or Dependent | | | | In Indonesia, according to the latest tax |
| Pass); a local resident and qualified company | | | | amendments, the corporate tax rate has been |
| secretary (must be a natural person); a minimum of 1 | | | | reduced to a flat corporate tax rate of 28% for |
| and maximum of 50 shareholders (natural persons or | | | | 2009 and will be further reduced to 25% from 2010. |
| corporates); and a minimum paid up capital of SGD | | | | Dividends paid to individuals, interest, rents and |
| 1.00 (no authorized capital required). | | | | royalties are subject to 15% withholding tax. |
| Foreigners who wish to register a company in | | | | Taxes in Singapore are significantly lower than |
| Indonesia must comply with the following | | | | Indonesia. Singapore charges a corporate tax rate of |
| requirements: a local registered address; at least 1 | | | | approximately 8.5% for profits up to S$300K and a |
| director (need not be a local resident); minimum of 2 | | | | flat 17% for profits above S$300K. There is no |
| and maximum of 50 shareholders (natural persons or | | | | dividend tax in Singapore. |
| corporates) and a commissioner. Although there is no | | | | ON A FINAL NOTE |
| mandatory minimum share capital requirement, | | | | Setting up a company in Singapore is significantly |
| authorities normally approve companies with a | | | | easier than incorporating a company in Indonesia. |
| minimum share capital of USD 100,000 - USD 250,000. | | | | Unlike Indonesia, Singapore does not impose any |
| INCORPORATION PROCEDURE | | | | restrictions on foreign ownership nor does it limit the |
| Company registration in Singapore is | | | | business activities that are open to foreign |
| fully-computerized and can be completed within 1 day | | | | investment. Most entrepreneurs prefer Singapore as |
| via electronic means. There are only two major steps | | | | an investment destination, as Singapore company |
| involved in company formation - name approval and | | | | registration can be completed in 1 day's time with |
| filing incorporation documents. | | | | minimal formalities. Given Indonesia's 3-6 month time |
| By contrast, company incorporation in Indonesia is | | | | line for company incorporation, which is hampered by |
| tedious, time consuming and can take up to 12 | | | | bureaucratic delays and the complicated visa approval |
| weeks to complete all formalities. You must submit a | | | | process, investors usually rank Indonesia as an |
| company incorporation application along with | | | | undesirable offshore business destination. |
| supporting documents to the Capital Investment | | | | |