By Vlad Cuc, specialist in company formation matters
The Singapore automotive industry has started picking up at the beginning of 2017 following an upward trend which is registered all over the world. The city-state’s status as one of the most advanced countries in the world in terms of innovation in connection to the latest developments in the electric cars industry has driven one of the most significant increases of this industry in the past year. Several reports indicate the automotive sector in Singapore has registered the highest growth in the last 10 years in 2016.
Investors seeking to start a business in the automotive industry which does not comprise only the manufacturing of car spare part can also set up taxi or even car rental companies in Singapore. With years of experience behind, our Singapore company formation specialists can help foreign investors who want to set up car rental businesses in the city-state.
The first thing to consider when deciding to start a business in Singapore, no matter the field to operate in, is the type of structure as it can have a great impact on the liability and taxation of the business owner. The same criteria apply when establishing a Singapore car rental company.
The limited liability company is a preferred business form by local and foreign investors coming to Singapore, as it offers similar advantages and registration requirements. Foreign citizens interested in setting up this type of company will also need to consider obtaining a Singapore residence permit.
In order to set up a car rental business in Singapore as a limited liability company, the following steps must be completed:
It is important to note that in the case of foreign citizens seeking to offer car hire services, an international driver’s license is required and must be valid at the time the documents to be filed with the Land Transport Authority are submitted. Another option for foreign business owners is to simply act as shareholders in the car rental business and hire Singapore citizens or residents.
If you want to open a company in Singapore as a foreign investor and need assistance, our local advisors are at your disposal.
Considering the competitiveness in the car rental industry, one must consider the type of cars for rent, as well as the services included in the offer. Among the services a Singapore car rental company can offer are:
Our Singapore company formation specialists can offer information on the requirements to open a car rental business in the Lion City.
We also invite you to watch our video on how to open a car rental business in Singapore:
An entrepreneur who wants to open a Singapore company and offer car rental services through it has various options. After the company registration procedure is completed, the car rental business must register with the Land Transport Authority (LTA).
One of the advantages of setting up a car rental company in Singapore is that it can tailor its services to the request of its clients. Most Singapore citizens rent cars for everyday business trips, for going on vacations or for various special events. For some of these events the services will also mean hiring a driver.
Singapore car rental companies which also offer private hire driver must comply with a few requirements imposed by the LTA, among which:
Our Singapore company formation agents can assist with the incorporation process of the car rental company.
Under the local legislation, companies offering car rental services in Singapore have several responsibilities, among which the most important is related to verifying the persons the cars are rented to.
The following regulations must be respected by those hiring the services of a car rental company and by the Singapore car rental business:
Also, each car rental company in Singapore can impose additional requirements or conditions upon the rental of auto vehicles.
If you decide to open a company in Singapore and need advice on how to proceed, do not hesitate to ask our company registration agents for help.
The taxation of companies in Singapore, including car rental businesses, will occur the same way as for any other type of company, depending on the structure used. However, an important aspect to consider is that such companies can claim various deductions, according to the Singapore tax authority. Among these, the company can claim the deduction of all the expenses generated by the private hire of cars. Various capital allowances are also available when purchasing the cars for the fleet.
Singapore car rental companies also have several obligations, among which separating the income earned from the car rental services from other incomes. They are also required to keep separate accounting books for the rental services and other services offered (if any).
There are many reasons for which local and foreign investors decide to open car rental companies in Singapore, among them being the fact that such services are quite sought in this city. Also, Singapore is one of the countries in which owning a vehicle is not among the preferences of residents, considering the public transportation system is quite developed and the services offered by car rental companies are affordable.
Starting a car rental business in Singapore is quite advantageous from a taxation point of view. Car rental services enter the same category as offering taxi services in the city-state and the Inland Revenue Authority provides for various tax allowances for these companies.
If you decide to open a company in Singapore in the field of car rental, our local representatives are at your disposal with full information about the requirements and steps to complete in order to have your business running in the shortest time possible.
If you want to start a car rental business and need assistance, do not hesitate to contact us. You can rely on us for help with the company formation process in Singapore.