View Full Version : Do you need license from IDA to do web hosting business
icauldron
25-09-2002, 19:13
Wondering....everything is regulated in S'pore
Lianseng
DoorKeeper
25-09-2002, 19:40
Have not heard anything like that (yet !)
Marcus Lau
25-09-2002, 20:54
Dear Liansheng,
For your info, you dont have to register to do a webhosting business unless you wanna your presence to be feel legally in Singapore.
Best regards,
Marcus Lau.
To start a business in SIngapore, You will need to be registered with Registry of Companies and Businesses (RCB) (http://www.rcb.gov.sg)
The procedure is that you need to submit a form to check whether the name for your business is taken and if it is not, you can apply for it.
The application for a new business name is SGD$15 while the license fee is SGD$105 for 3 years
Heng Chai
26-09-2002, 00:36
You don't need to be registered with IDA unless you intend to provide network services which involve large amounts of $$
Scroller
26-09-2002, 01:22
and you will be better off to register as a private limited instead of a business ... at least your liabilities will be limited to your paid-up capital.
what is the criteria for registering as a private limited?
Scroller
26-09-2002, 09:35
2 directors, get a corporate secretary (which cost about $600) a year to do all the filing for you. Open a corporate a/c with any banks (min deposit about $1k), annually do an audit and tax matters which cost about $2k. Pay up $1/- as paid-up capital.
Go to eCitizen website, and you will be able to find the information. If you need more information or recommendation for cheap reliable corporate secretary, pm me.
P.S. once you're registered as a business, you can start buying up .com.sg domains :D
As a matter of fact, I had already brought my .com.sg domain :)
icauldron
26-09-2002, 10:03
Scroller got most of it. The trick is to use one of those service bureaus advertised under Business in the classified ads.
Charges are anything from $280 (just for the bureau, another $300 for RCB fees). Branded ones, if you really need them are more ex. Careful, some of these people make money by how much they charge for each other task the company secretary does for you e.g. resolutions for bank account, etc.
You really should do this if you are in this business. Otherwise if you get sued ....they can take your house, your car, your dog,...
Yes .. Scroller got most of it...
PTE LTD is VERY VERY VERY important ... Let me repeat that VERY IMPORTANT ....
Definitely worth the annual fees that you are paying for...
Scroller
26-09-2002, 13:25
since icauldron was talking about corporate secretary fees ... unless you've got lots of money to burn, choose your corporate secretary carefully. some will charge you for every single thing that you do ... like my previous secretary, if I file any RCB form which cost about $10 ... I ended up paying $5 for transportation fees, $10 stationery fees (you dun get to keep the pen though), , $5 for photocopying (copy is for their reference) ... blar blar blar .. in the end, pay like $50 to file a $10 form.
And, if you're gonna run a business from home, you can pay a little more to use their office address as your registered address as well. some will even offer phone answering services which will either take messages or divert the call to you.
Originally posted by royong
Yes .. Scroller got most of it...
PTE LTD is VERY VERY VERY important ... Let me repeat that VERY IMPORTANT ....
Definitely worth the annual fees that you are paying for...
Lets said for newly start up that cannot afford for it, any other alternatives?
get one corporate secretary as the director. Like the company i'm working for... she is a director, and she comes only once a week :-)
just kidding, coz it may end up even costly just to pay her salary
Scroller
26-09-2002, 16:59
Originally posted by fred
get one corporate secretary as the director. Like the company i'm working for... she is a director, and she comes only once a week :-)
just kidding, coz it may end up even costly just to pay her salary
If I remember correctly, that will not be possible. To be a private limited, min will be 2 directors, and your corporate secretary can not included as one director.
Scroller
26-09-2002, 17:06
Originally posted by chin
Lets said for newly start up that cannot afford for it, any other alternatives?
go for business or partnership. cheaper. If i remember correctly, you wun have to do annual audit, so can save quite some money. but be very clear with your income tax, as what you earn in the business go straight under your personal income.
if you suay business get into some bad debt, potentially you can be sued to your last penny (like what another guy said, you can even lose your dog. :D )
and again, you might want to think twice about that, cos some bigger companies tend to avoid doing businesses with sole proprieter or partnerships.
Do we need to do filling of all invoice we send to our customer for billing (as in emails) and how do I submit it as part of my personal income as in Income Tax?
Scroller
27-09-2002, 01:48
(I might not be 100% accurate, you might want to double check with an accountant )
if you're running a business (not pte ltd), it's very much up to you to declare your income. But do remember that it's not like that easy to underdeclare ... one, there is always your bank statement, you will need to be able to explain where the money is coming from. secondly, companies who pay you will list you in their accounts, so it's pretty easy for IRAS to trace back to you and realised that you never declare the amount received for services rendered. Of course there are ways to go around it but I'll rather not talk about it here.
IRAS also do quite a bit of random checking, if you suay let them find out, gonna be quite shit.
moi suddenly become corporatisation consultant liao :cool:
Hostings
10-12-2003, 03:57
Hi
This seems to be a pretty old thread. But still have something to top it up.
go for business or partnership. cheaper. If i remember correctly, you wun have to do annual audit, so can save quite some money. but be very clear with your income tax, as what you earn in the business go straight under your personal income.
(1) Is this true?
(2) I come from a non-rich family. Parents been in and out of job since i am in this world, and mainly come from funny funny source of incomes, part times here and there, even 4D, scholarships and such to tide through. I had even went out to work at 10, likewise my siblings. Nothing important above, but to say that my family has almost never filed for any income tax in my memory.
I recalled something from an accountant aunt in Australia, that Singapore's personal tax is actually within 10%, and that's application if you earn more than a certain amount annually. So any big uncles here can comment, how much is this value, if this statement is true?
If not, i believe there is a table to rate the ratio of earnings to % of tax payable, anyone able to post a rough copy?
TIA.
DediSource
10-12-2003, 06:54
that Singapore's personal tax is actually within 10%
I've no idea with the percentage but you can escape with anything below $6K p.a.
DoorKeeper
10-12-2003, 09:17
Hostings,
You should be able to find out tax rate table info from IRAS. But declare your income anyway. Why ? Because you can declare everything and still not pay a cent in taxes. Most Singaporeans (more than 70%) do not pay taxes at their income levels. Moreover, as a business, you can declare quite a lot of things as business expenses.
Originally posted by DoorKeeper
Hostings,
You should be able to find out tax rate table info from IRAS. But declare your income anyway. Why ? Because you can declare everything and still not pay a cent in taxes. Most Singaporeans (more than 70%) do not pay taxes at their income levels. Moreover, as a business, you can declare quite a lot of things as business expenses.
What can I declare for my business expense??
Server cost?
Hosting cost?
DoorKeeper
10-12-2003, 14:27
Yes, you are correct. Server purchase, rental of colocation, fee paid to freelance web designer, cost of software such as vBulletin, purchase of blank CD-R. Whatever you had to pay out to run your business. Submit even the receipts of lunches you buy for your clients if they are significant.
Hostings
10-12-2003, 16:02
That's .. arg~
Escape tax below 6k? I see.
Thanks.
Hmm so how much tax do we have to pay for above $6k ?
Originally posted by Hostings
If not, i believe there is a table to rate the ratio of earnings to % of tax payable, anyone able to post a rough copy?
Originally posted by ToOnZ
Hmm so how much tax do we have to pay for above $6k ?
This might be of help for salaried employees: http://www.iras.gov.sg/employees/other_resident.htm
And for companies: http://www.iras.gov.sg/companies/com_regime_rate.htm
Hi guys. The moment you guys mentioned TAX, i got my Taxation book up! Anyway, just an intro, i'm taking Accountancy and so, Taxation is one of my modules.
Here it goes. Oh, btw, do not worry, this is the latest.
Extracted from Singapore Tax Workbook, 6th Edition 2003.
==============================================
Chargeable Income ($) Rate(%) Gross Tax
Payable($)
On the first 20,000 0 0
On the next 10,000 @ 4 400
On the first 30,000 400
On the next 10,000 @ 6 600
On the first 40,000 1,000
On the next 40,000 @ 9 3,600
On the first 80,000 4,600
On the next 80,000 @ 15 12,000
On the first 160,000 16,600
On the next 160,000 @ 19 30,400
On the first 320,000 47,000
Above 320,000 @ 22
Gosh, it does look a little messy.
Just to give a better picture. Here's an example.
John's Chargeable Income for last yr was $69,180.
His tax payable for the year would be
Tax on 1st $40,000 <--- to pay $1000
Tax on balance (69180-40000) @ 9% <--- To pay $29180 * 9% = $2626.20
So, John's total tax payable is $3626.20
Hope it helps clear your doubts. :D
**Edited** Chargeable Income is NOT What you earned.
Statutory Income is what you earned from all sources after deducting deductible expenses.
Afterwhich, there is Assessable income, which does not apply to individuals.
For individual, after SI, it's CI, that is, Chargeable Income.
Chargeable income is the the remainder of your SI after deducting PERSONAL RELIEFS.
Oh btw, Corporate tax rate is fixed at 22%.
What i mentioned above is for PERSONAL TAX.
Hostings
13-12-2003, 05:52
Hmm Corporate Tax fixed? If i am not wrong, it'll be reviewed annually, and the last accounting year was the least, at 22%?
From your table, does that mean for the first $20,000 no tax is required? I suppose the next $XXX is on the thereafter basis?
And is there any need to do declaration if chargeable income is within 20k?(hehe if needed, i think my parents didn't do it for their entire lifetime :P)
Yeah, it's reviewed every year, according to the Budget.
Yeah, for the first S$20k, no tax. However, as to if you need to do any declarations, i'm not sure. You better check with your aunt, or any qualified accountants.
For now, applying and calculating tax is all i know. :P
Originally posted by royong
Yes .. Scroller got most of it...
PTE LTD is VERY VERY VERY important ... Let me repeat that VERY IMPORTANT ....
Definitely worth the annual fees that you are paying for...
Why ?
Hmm I really need someone to help me with my accounting...
salmonella
13-12-2003, 16:52
It seems quite clear that it's cheaper to start up and run a business, compared to a company. Eg., taxation for FY '03 is 22% flat rate for companies, whereas for businesses, it's progressive and only reaches 22% (which is incidentally the maximum) at $320,000/yr (!!!).
So, it seems that it's bound to be cheaper to do work as a business. Why then, do people want to register companies? Apart from the "prestige" of being a Pte Ltd, and (possibly) being able to attract business from companies that will only do business with other companies, it seems that the primary motivation is that the company is a separate legal entity (please correct me if I'm wrong on any of the counts).
So, how useful is being a separate legal entity, really? If you don't run up a lot of debts (and hosting costs are really quite standard and fixed per month), and you cover yourself in the T&C carefully so that you limit liability for downtime, it seems highly unlikely that you'll be sued down to your last boxers....
How about a way of covering yourself both ways? Is it possible to start out with a business first, then incorporate a company if/when business picks up, and somehow convert existing business arrangements and liabilities to the company?
I'd be very interested to hear comments, suggestions, or even that I'm totally wrong.
P.S. The general tone of this thread seems to be quite far removed from the topic, but I think that's been answered already anyway.
Yeah, is it possible to first register as a business first, then register as a company ? With that same name ?
What problems will arise?
Hostings
15-12-2003, 02:06
If i am not wrong, to ToOnZ, when you incorporated, you merely add a Pte Ltd to the end of your name.
salmonella : You definitely have the points there for me to be agreeable. Perhaps this is web hosting related.
If you're merely a reseller, or anyone within my size, there isn't really any point to register a company instead of a business. Annual revenue is less than 5k, it doesn't even qualify for taxation. However, what about players like IWI? I don't know their real figure, but they way they work really show that they are big. Just over the night, you might be left nothing.
Another thing is, if you're implying this on a general form, i think it is not very reasonable. Basically hosting services require pretty low start up cost, compared to many other businesses. Although 1k-3k started cost for a hosting company seems quite a sum of money to many of us, but it's still very low in fact. Hope it's a good example, what about construction companies? Dedicated server companies? All these requires tens of thousands, or even hundreds of thousands of startup cost, and they aren't easy to earn back within perhaps the first year of operation. Thus a compensation is also high, at the risk of sounding obvious, the chances of bankrupcy are higher more often than not.
I think this issue had been "splittingly" discussed over few threads in the forum before. Basically why people will want Pte Ltd is the fact it dissolve any personal liabilities. A common thining will make a Pte Ltd company as real people running business, less likely to be any tom dick and harry simply register a business.
Above is merely my personal views and comments that i can think of briefly, anyone disagreeing please advice me. :)
If i had not remember wrongly, shortly after DPM Lee Hsien Long had announced the Budget, there was a short dialogue with him from one of our local media regarding this year's corporate tax and 5% GST, he mentioned that they are going into a discussion of having an easier time on bankrupcy of business than personal.
How about a way of covering yourself both ways? Is it possible to start out with a business first, then incorporate a company if/when business picks up, and somehow convert existing business arrangements and liabilities to the company?
This is indeed agreeable. But one thing you cant deny is, people will get lazy. What i do see currently and a few uncle's business associate's experience is, after sometime when their business picks up and when they are making significant profit, they are not used to doing accounts, or being responsible enough to standadise things for accounting purposes. :D They are also more likely being not able to bear the pain of spending the fees and tax for running as a company.
Just my thoughts. :)
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