Why Choose Singapore for Company Registration and the U.S. for a Bank Account? A Deep Dive into Benefits and Challenges

Translation

In today's increasingly globalized economy, more and more entrepreneurs and investors are choosing to separate their company’s registration location from the location of its bank account in order to optimize resource allocation. Among these options, Singapore has become a preferred destination for company incorporation due to its stable environment, efficient business system, and favorable tax policies. Meanwhile, the United States, with its vast market size and highly developed financial infrastructure, is seen as an ideal place to open a corporate bank account. Recently, as global capital flows have accelerated and cross-border investments have heated up, the combination model of registering in Singapore and opening accounts in the U.S. has drawn growing attention.

1. Why Incorporate in Singapore?

As one of Asia’s most competitive business hubs, Singapore has long attracted global investors with its transparent legal framework, efficient services, and excellent business environment. According to the World Bank’s 2025 Global Business Environment Report, Singapore ranks second globally in terms of ease of doing business, just behind New Zealand. This has helped attract significant international capital and numerous multinational headquarters to establish operations in the country.

First, Singapore operates a territorial taxation system, meaning that only income sourced within Singapore is taxed. The corporate income tax rate stands at just 17%, significantly lower than that of many European and American countries. Newly established companies can also benefit from tax exemptions for their first three years, making it particularly attractive to startups.

Second, Singapore boasts world-class financial infrastructure and a robust judicial system that protects the legitimate rights and interests of businesses. In recent years, the country has actively promoted digital economy development and technological innovation, offering strong support to tech-driven enterprises and multinational corporations. For example, by the end of 2025, the Monetary Authority of Singapore MAS announced plans to further relax regulatory restrictions on fintech firms, encouraging more innovative companies to grow locally.

Moreover, Singapore’s strategic location at the heart of Southeast Asia makes it a vital hub connecting East and West, facilitating regional expansion into Asian markets. For Chinese companies aiming to enter the ASEAN market, Singapore serves as an ideal gateway.

2. Why Open a Bank Account in the United States?

Despite Singapore’s advantages in taxation and operational efficiency, most companies still prefer to open bank accounts in the United States. This decision is primarily based on several key reasons

First, the U.S. financial market is mature and highly liquid, offering a wide range of financial services and financing channels. U.S. banks enjoy high global acceptance, especially in international trade settlements where the U.S. dollar remains the dominant currency. According to data released by the Bank for International Settlements BIS in early 2025, the U.S. dollar accounts for over 40% of global foreign exchange transactions-maintaining its position as the world’s leading currency.

Second, the U.S. capital market offers both depth and breadth, allowing companies to raise funds through various means such as IPOs and bond issuance. For companies planning to go public in the U.S. or seeking venture capital, having a U.S. bank account enhances credibility and builds stronger trust with investors. Although U.S. banking regulations are strict, they also ensure a high level of safety and stability. Especially amid rising global economic uncertainty, U.S. bank accounts are viewed as important tools for asset preservation and risk mitigation.

Following the collapse of Silicon Valley Bank and Signature Bank in 2025, the Federal Deposit Insurance Corporation FDIC swiftly intervened to protect depositors’ interests, further reinforcing public confidence in the U.S. banking system.

3. Advantages and Challenges of the Combined Strategy

The strategy of incorporating in Singapore and opening a bank account in the U.S. provides businesses with notable benefits in tax planning, fund management, and global positioning. On one hand, setting up a company in Singapore allows access to low tax rates and flexible commercial policies. On the other hand, maintaining a U.S. bank account improves liquidity, broadens funding sources, and enhances international recognition.

However, this dual approach is not without challenges. First, compliance costs can be relatively high. With two different regulatory systems involved, companies must invest more time and resources into tax reporting, anti-money laundering reviews, and other regulatory obligations. In recent years, governments around the world have strengthened oversight of cross-border capital flows. For instance, the U.S. Foreign Account Tax Compliance Act FATCA requires global financial institutions to report information about U.S. citizens' overseas accounts to the IRS, increasing the compliance burden on businesses.

Second, fluctuations in exchange rates between the Singapore dollar and the U.S. dollar pose potential financial risks. Cross-border fund transfers may lead to currency conversion losses. Additionally, changes in government policies in either country could affect business operations. For example, if Singapore revises its tax policy toward foreign companies or the U.S. tightens banking access for non-resident entities, it could create new challenges for businesses using this model.

4. Conclusion

Overall, the combination of incorporating in Singapore and opening a bank account in the U.S. represents a strategic and practical business model. It reflects companies’ ability to flexibly allocate resources in a globalized context and demonstrates forward-looking thinking by entrepreneurs regarding future development. As the international economic landscape continues to evolve, companies must strike a balance between risk and opportunity-precisely the value offered by this combined strategy.