Set up a company in the US or set up a company in Singapore to grow your business?
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Updated on January 22 
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- 1. Business purpose of establishing a foreign company
- 2. Singapore and US business environment
- 3. Tax policy of US and Singapore companies
- 4. Need to open a bank account
- 5. Procedures for establishing a company in the US or Singapore
- 6. How does GLA support businesses in establishing companies in the US or Singapore?
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The company wants to expand its market abroad but is hesitant between the US and Singapore? Both are countries with developed economies, attracting foreign investors. This article by GLA will help the company:
- Choose to set up a company in the US or set up a company in Singapore thanks to GLA's criteria.
- Understand the process of establishing a company in the US or Singapore to confidently do foreign investment business.
1. Business purpose of establishing a foreign company
Companies need to clearly define their needs and business goals when deciding to establish a company in the US or Singapore. The following are the reasons that foreign investment companies often consider when deciding to establish a foreign company.
Optimizing business profits:
The company has customers from the US or Singapore or regularly signs contracts with partners, suppliers or customers in the US or Singapore. Therefore, to optimize the company's profits, establishing a US or Singapore company to enjoy tax incentives for US/Singapore companies when generating revenue, deducting expenses, and reducing corporate income tax are factors that help the company choose the country of establishment.
Expanding production and business activities in Singapore/USA:
- Company formation in Singapore: is a country with a favorable geographical location, a trading center in Southeast Asia and a developed seaport system and logistics infrastructure. Logistics companies and companies that want to directly expand their premises and production in Singapore should choose this country.
- Setting up a company in the US: is a country with a large consumer market, modern infrastructure and high-quality human resources, especially in the fields of technology and finance. Countries that want to expand their manufacturing activities in the US should establish companies here.
Exporting goods to demanding markets such as:
EU, US, UK, Australia: All are developed economies with high product quality standards. Establishing a company in Singapore or the US will depend on the certificates and regulations on the goods that the company needs to export. With strict FDA certificates, establishing a US company will be easier than establishing a company in Singapore. To determine exactly what is needed.
Open Holding company to invest in other countries:
Establishing a company in the US or Singapore helps the Company easily invest in other countries thanks to stable and transparent legal framework for investment activities.
Call for investment capital
In the US and Singapore, there are multi-million dollar investment funds in diverse industries and fields, helping companies access international capital sources and business opportunities with advice from the world's leading investors.
- Company formation in Singapore: The company will have easy access to financial investment funds (Fintech), energy and traditional industries. Famous investment funds in Singapore include: Temasek Holdings, GIC, etc.
- Set up a company in the US: The US is famous for its large-scale and diversified venture capital funds and private funds, focusing on: technology, healthcare, clean energy. Famous investment funds include: Sequoia Capital, Andreessen Horowitz, Tiger Global Management.
A set of suggested questions to help your Company determine its purpose when establishing a company in the US or Singapore:
- Why do businesses want to expand their markets abroad?
- Are your business goals relevant to the US/Singapore market?
- What competitive advantages does a business have to succeed in a new market?
- What are the potential risks of market expansion?
2. Singapore and US business environment
| Factor | Mỹ | Singapore |
| General characteristics of the economy | The United States is the world's largest economy and plays a major role in the global market. Any changes to the US economy affect the world economy. | Singapore has a free economy, very high growth rate and is known as the Asian dragon. |
| The United States is one of the world's largest consumer markets. Of the 10 companies with the world's largest revenue in the ranking, Fortune Global 500 (September 03, 09) 50% is American company. | Singapore is located in Asia with a very favorable geographical and commercial location. However, Singapore's territory is not large, so the main economic activities are trade and services (accounting for 40% of national income). | |
| System law | The legal system consists of federal law and state law (each state's own laws). Therefore, businesses need to identify the state that best suits their business needs in order to learn about the appropriate legal system. | Singapore's legal system is based on English Common Law. Singapore's legal system is very clear and concise. Accordingly, Singapore ranks 17th out of 142 countries in the Rule of Law Index according to World Legal Foundation Rule of Law Index 2023. |
| Quality of labor resources | Both Singapore and the US have an abundant workforce with high professional qualifications due to policies to attract the rich and talented in these two countries. In the US, on average, one in three people has a bachelor's degree or higher, while in Singapore, 03% of Singaporeans are educated with a university degree. | |
| Main language | English | |
3. Tax policy of US and Singapore companies
| Factor | Mỹ | Singapore |
| Corporate income tax | Federal corporate income tax ranges from in cases where taxable income exceeds $335.000. Since Tax Cuts and Jobs Act (TCJA) of 2017, the corporate income tax rate was reduced from 35% to 21% and is now at the world average rate instead of being high. In addition, each state and locality can levy an additional tax ranging from 2,5% to 9,8%. Corporate income tax rates in the US vary depending on the state in which a business chooses to establish its company. Therefore, businesses can choose the state to suit their business as follows: | The general corporate income tax rate is 17%. For newly established enterprises in the first 03 years, the enterprise will receive the following tax incentives:
The tax system in Singapore will change periodically and this requires businesses to update promptly to optimize profits. Therefore, update your tax knowledge now with outstanding contents such as:
Note: Singapore company tax incentives for the first three years after incorporation may vary from financial year to financial year. |
| Personal income tax | In the United States, federal personal income tax is progressively increased to 37% of taxable income. While taxes on federal social insurance programs (such as Social Security, Medicare, and Medicare) are levied separately by each state. | In Singapore, personal income tax is progressive, up to 24% of taxable income. In particular: dividends distributed to shareholders (after completing corporate income tax) will not be subject to personal income tax. |
Companies that want to compare various tax rates between the US and Singapore such as contractor tax, sales tax, etc. can use the shortened GLA tax calculator or access the full tax calculator now: International Tax Comparison Tool.
4. Need to open a bank account
When choosing to establish a company in the US or Singapore, businesses can choose from the following two types of bank accounts:
- Traditional bank account: opening time from 3-5 months, complicated profile, full range of banking services from basic to advanced: money transfer, L/C, savings, bank loans, etc.
- Bank account number: Fast account opening time, from 3-5 days, diverse currencies, easy to choose domestic or international payment methods, helping to optimize transfer costs compared to traditional banks.
Each bank and account type will have different maintenance and transfer fees. You should contact a GLA financial expert for advice on opening a bank account that suits your needs.
All the list of banks that Businesses need and the criteria for opening an account will be available at: Bank Comparison Tool. Access the comparison tool now to easily choose the right bank for your business.
5. Procedures for establishing a company in the US or Singapore
| Factor | Mỹ | Singapore |
| Type company | Companies can consider the following three main types of company formation:
In particular, the limited liability company (LLC) type is considered the most suitable for individuals/businesses who want maximum protection from the law, corporate governance procedures and flexible and simple tax payment procedures. | When a company wants to expand its business operations in Singapore, it can choose from the following 3 types of businesses: Joint Stock Company (Pte.Ltd) Private enterprise. Joint venture. Among them, establishing a subsidiary in the form of a private limited liability company (PTE. LTD.) is the type chosen by many businesses when investing in the Singapore market. This type is considered flexible, has the ability to expand in scale and make the most of the government's incentives for businesses. |
| In addition, Enterprises can also consider establishing representative offices and branches in the US/Singapore. | ||
| Incorporation process | Fast, simple. Special: Businesses do not need to be physically present in the US during the company establishment process. At the same time, to prepare for the plan to establish a company in the US, businesses can update the latest information through GLA's diverse source of articles: | Fast, simple. Special: Enterprises do not need to be physically present in Singapore during the company establishment process. But first, businesses need to learn about the process of establishing a Singapore company and the work that needs to be done when opening a company here: |
| Time of company establishment | 01-02 working weeks depending on the state. | 02-03 working days. |
6. How does GLA support businesses in establishing companies in the US or Singapore?
With a team of legal, financial, tax and accounting experts who understand the US and Singapore markets, we will support the company in:
- Determine the country of company establishment that suits the business needs of the enterprise;
- In-depth consultation on the differences, advantages and disadvantages of countries to help businesses make accurate decisions and plan appropriate foreign market development;
- Prepare documents to establish a company in the US or Singapore, monitor and hand over at least one type of bank account to help businesses make convenient payment transactions without interrupting payment needs.
- Perform US accounting tax reports, Singapore accounting tax reports. Ensure compliance with US/Singapore corporate operating regulations.
Highlights- Choosing to establish a company in the US or Singapore is based on the following 5 criteria:
- Business purpose of establishing foreign company
- Singapore and US business environment
- US and Singapore corporate tax policy
- Need to open a bank account
- Procedures for establishing a company in the US or Singapore
- Use the GLA tax comparison tool to get an overview of Singapore/US taxes and other countries: click here.
- Use the bank comparison tool to see a list of traditional banks, evaluate the possibilities of opening a traditional bank and a digital bank: Access now.
This article was published by GLA on 22/10/2020. Copyright and accompanying content are intellectual property of GLA. All rights reserved.
The guidance and content are for general information only and are not intended to provide specific guidance and advice on accounting, tax, legal or other professional advice. Readers should consult professional advisors on specific issues.
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