Why Choose Singapore to Register a Cayman Islands Company?

Cayman Islands and Singapore A Strategic Combination for Global Business

In the international business environment, the Cayman Islands have long been a popular choice for global investors seeking to establish offshore companies. Its stable legal system, zero-tax policy, and high level of confidentiality have attracted numerous enterprises to register there, aiming to achieve capital operations, overseas financing, and tax optimization.

However, as global compliance requirements become increasingly stringent, a single offshore structure is no longer sufficient to meet the diversified needs of modern businesses. In recent years, more entrepreneurs and investors have turned their attention to Singapore - an Asian financial hub that has emerged as a strategic alternative to the Cayman Islands.

1. Strengths and Limitations of Cayman Companies

As a British Overseas Territory, the Cayman Islands boast a mature and robust financial regulatory framework, making it one of the world's most renowned offshore financial centers. Its corporate law is based on the common law system, offering strong protection for investor rights. Cayman companies are not subject to corporate income tax, capital gains tax, or dividend tax, providing significant tax advantages for multinational corporations and private equity funds. Many Chinese companies listing in the U.S. also use Cayman entities as holding platforms.

Nevertheless, relying solely on Cayman structures can no longer keep pace with the growing complexity of global regulations. In recent years, countries and regions including the European Union have strengthened transparency requirements for offshore companies. For instance, the implementation of the Economic Substance Law ESL has increased compliance costs for Cayman companies. Moreover, due to the lack of physical business presence in the Cayman Islands, operational challenges often arise in areas such as bank account opening and cross-border transactions.

2. The Strategic Value of Singapore

Against this backdrop, Singapore has emerged as an ideal bridge between Cayman entities and real-world business activities, thanks to its stable financial system, efficient business environment, and strong international reputation.

Firstly, Singapore’s tax regime is highly competitive. Under its Income Tax Act, the first SGD 300,000 of taxable income for local companies is tax-exempt, and the maximum corporate tax rate is only 17%, significantly lower than in Western countries. More importantly, Singapore follows a territorial taxation principle - foreign-sourced income generally incurs no tax unless remitted into Singapore. This offers valuable tax planning opportunities for enterprises investing overseas through Cayman entities.

Secondly, Singapore maintains an open attitude toward foreign-invested enterprises, with a streamlined and efficient registration process. According to data from the Accounting and Corporate Regulatory Authority ACRA, new company registrations in Q1 2025 increased by nearly 15% year-on-year, with many targeting the Asian market. For enterprises already using Cayman companies as holding structures, establishing subsidiaries or affiliated entities in Singapore can enhance commercial credibility and build stronger trust with clients and partners.

Thirdly, Singapore boasts a well-developed financial infrastructure and a thriving banking sector. Major global banks operate branches in the country, allowing businesses to easily open multi-currency accounts and manage cross-border funds - a crucial support for enterprises engaged in capital operations via Cayman entities.

3. Synergy Between Cayman and Singapore The Optimal Global Structure

Today, an increasing number of multinational companies adopt a dual-structure combining the Cayman Islands and Singapore. Typically, the Cayman entity serves as the holding company, used to attract international capital, conduct overseas acquisitions, or prepare for IPOs. Meanwhile, Singapore hosts the operational management platform, handling regional headquarters functions, supply chain coordination, RD, and other core business activities.

This hybrid model leverages the tax benefits of the Cayman Islands while benefiting from Singapore’s strong operational capabilities, creating a globally integrated structure that combines virtual and physical assets. Particularly when expanding across the Asia-Pacific region, Singapore’s geographic advantage and cultural affinity make it an ideal foothold. As a signatory to multiple free trade agreements, Singapore maintains close economic ties with over 100 countries and regions. Once established in Singapore, businesses gain easier access to the ASEAN market, along with preferential tariffs and trade facilitation policies.

4. Real Cases and Future Trends

Recently, several tech startups have adopted this dual-structure model. For example, a Southeast Asia-based AI company initially incorporated in the Cayman Islands to attract international venture capital, later set up a research center in Singapore, applied for subsidies, and eventually secured multiple rounds of funding and successfully listed on NASDAQ.

According to Bloomberg, in Q1 2025 alone, Singapore attracted over USD 6 billion in foreign direct investment, with a large portion flowing into the technology and finance sectors. This reflects global capital’s recognition of Singapore as a regional hub and further confirms its role as a strategic complement to Cayman-based entities.

Looking ahead, as the global economic landscape evolves and compliance standards continue to rise, companies will place greater emphasis on structural flexibility and sustainability. The Cayman-Singapore combination aligns well with current regulatory trends and provides solid support for long-term enterprise development.

In conclusion, while Cayman companies remain vital tools for international investment and financing, choosing Singapore as a strategic pivot is undoubtedly a wise decision in today’s competitive global environment. Together, they form a global corporate architecture that combines tax efficiency, operational strength, and international vision.