The Singapore Limited Liability Partnership (LLP) is not only a good to conduct your trading activities in Asia but it also offers other advantages, such as a good
international reputation and adequate taxation.
The essential feature of the Singapore LLP is the fact that it combines the organizational flexibility and tax treatment of a partnership with limited liability for its partners. This limited liability is possible because the Singapore LLP is a legal entity that is separate from its partners.
The Singapore LLP can undertake the same actions as an individual. It has the ability to enter into contracts, own assets, and continue its existence despite any change of partners. The fact that it is a separate legal entity makes it more closely akin to a company than to a partnership.
The concept is similar to that of the American LLC (Limited Liability Corporation), a US legal entity that generally is not subject to US taxation. Although the Singapore LLP is a legal entity, it is taxed as a partnership, so no tax is assessed on the Singapore LLP. Nevertheless, the partners are taxed, in their respective country of residence, based on their share in the profits.
Therefore, the Singapore LLP is tax transparent. Its profits are re-directed to flow through to its partners. Furthermore, if the partners are non-Singapore residents and the Singapore LLP does not generate its income in Singapore, then in theory the Singapore LLP should not be subject to any Singapore tax (a minimum of two partners is required).
If the annual turnover does not exceed 5 million Singapore dollars, audit of the books and records is not required. Details of the individual partners must be filed with the Accounting & Corporate Regulatory Authority (“ACRA”) in Singapore. Confidentiality can be maintained by using offshore companies to act as partner.
If a Singapore LLP seems to be something that would be of value to you in your business, we can help you set one up.
