You are probably here because you are having similar thoughts to the ones I had, when I moved to Singapore from Melbourne over three years ago.
The Australian economy has had its fair share of peaks and troughs. I absolutely love Australia and it is home for me, but I am disappointed by the support it currently offers to a ‘budding entrepreneur’ such as myself.
Some of my close acquaintances in the industry tend to think that the mining-driven boom is close to over, and that what Australia now needs is sustainable domestic growth.
From my experience, one of the biggest challenges we Australians face today is the faith (or lack of it) we have in our federal government policies on tax, superannuation, compliance, GST/VATs and excise, and the budget’s lack of support for business. To make this better, we then have the list of “Thou shalt…” registrations, stamp duties, audits, other taxes, customs, and expensive labour charges (and did I mention tax?) imposed by the state governments and local councils, which result in someone like me sitting with a frown on my face and my head between my hands!
For me, a move to Singapore in 2011 brought with it a refreshing wave of openness, a cultural melting pot, scrumptious cuisines, safety and order, a social scene, holiday destinations and a lot more, together with a reinvigorated encouragement to have a business of my own!
Singapore, in the heart of Southeast Asia, is the right place to extend and run business activities. There‘s a reason why this Lion City has continued to be ranked as the world’s most business friendly location!
The transition is further eased by wide recognition of qualifications and a very similar accounting system. In my case, my Australian CPA is as highly regarded in Singapore as it is in Australia. There are close to 20,000 Aussies in Singapore, so it’s easy to find a mate to grab a coldie with or, better yet, for the Aussie CPA in me to help you understand how Singapore and Australian taxes work in accord.
Taxes (surprise surprise!) put Singapore at the top of the league by far, hands down. This country is known to impose one of the lowest taxes in the world!
Let’s start with personal tax. I remember downloading the ATO tax calculator and spending half a day calculating my personal tax refund (if any) for the year. By comparison, I need only 15 minutes to do my personal taxes in Singapore, given under half-a-page’s worth of information requirements ‒ further rewarded with a whopping ~26% lower tax (by comparison)!
For corporates, this might sound unreal. But it’s true: the highest corporate tax rate stands at a mere 17% and annual profits of the first 300,000SGD are taxed at only ~8.5%!
To make things more interesting – (and brace yourself for this one) – dividends paid out to directors/shareholders and Capital Gains Taxes are tax exempt, plus there is no withholding tax! *ka-ching*
The regulatory environment brings with it handy credit and legal protections (and no red tape!), which translate into more cost-efficient operations. This allows us to lower fees and become more competitive. This, backed by the allowance on foreign investment/ownership and the availability of generous government loans/venture capital facilities, make it a haven for local entrepreneurs. Not long after becoming part of this economy, you would be sure to appreciate the high levels of transparency and consistency in business, economic and regulatory affairs.
Add to this a smooth transition of your accounting from your Australian ABN to Singapore using a magic that we call Xero!
Last but not the least, the government strength…
Most of the Singaporeans I know are very supportive of the country’s government ‒ and justifiably so! The Singaporean government offers its residents a stable and democratic structure backed by a solid judicial system with good corporate governance practices. In addition, and something I recently found out, Singapore has a strong network of over 76 double-taxation agreements (DTAs), making this an ideal location for a company to have its regional holding position by allowing it to do business in countries like Papua New Guinea, Indonesia, Malaysia and many more.
I would be more than happy to discuss this and more of my experiences in this space over a skinny latte or chicken-rice.