By Susan Rawlings

On February 23, 2012, in Doing Business in Singapore, Relocation to Singapore, Singapore Taxes,

U.S. President Barack Obama asked his nation's Congress this week to reduce the number of loopholes and subsidies in the country's corporate tax code, effectively reducing the top rate from 35% to 28%.

The proposal, released by the White House on Wednesday, also sets a minimum tax on multinational corporations' foreign earnings.

The new corporate tax rates proposed by the U.S. president draw a stark contrast to the favorable rates enjoyed by Singapore's corporate community, making relocation to Singapore an exciting choice for any new or existing business.

Over the past 15 years Singapore's top corporate tax rate has dropped to a flat 17%, and when calculated with applicable tax exemptions, incentives and depreciation rules, the actual tax rate for corporations and businesses rests at an even lower amount.

Small to mid-sized Singapore companies enjoy very attractive tax rates. The first three years of income of S$100,000 or less for a newly created Singapore company is currently taxed at zero percent.

There is no capital gains tax in Singapore.

The Case for Business Relocation to Singapore

As a Singapore company grows, so will its tax savings, with resident companies eligible for a partial tax exemption equivalent to about an 8.5% tax rate on taxable income of up to S$300,000 per year during the first three years of its existence.

After the initial three-year period draws to a close, the tax rate for Singapore resident companies remains at 8.5% for earnings up to S$300,000. Taxable income for earnings above S$300,000 will be calculated at the normal 17% corporate tax rate.

The contrast between the corporate tax rates in each country is stark, but the benefits to new and growing businesses are clear—the most cost-effective, pro-growth choice for your company and its shareholders is to make Singapore your new corporate home. Entrepreneurs, established businesses and multinational organizations can all benefit from Singapore's income tax rates.

To calculate your estimated Singapore taxes and compare them against those in your home country, you can use our online tax calculator.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.