Exempt Private Company (EPC) in Singapore — Drop Servicing Formation Guide
Choose a jurisdiction with strong payment gateway support (Stripe, PayPal) and low withholding taxes on foreign contractor payments, as you will be paying freelancers globally.
Last verified: June 13, 2026
Corporate Tax
17.0%
State Tax
0.0%
Formation Cost
$245
Annual Fee
$47
Forming a Exempt Private Company (EPC) in Singapore as a Drop Servicing means a total tax burden of 17.0% and an official formation cost of $245. The minimum capital requirement is 1 USD. Standard formation takes 1-3 business days, or 1 business day expedited. This guide covers the steps, tax breakdown, banking options, and compliance requirements — all from verified data.
First-year total cost
≈ $2,883
Ongoing (per year)
≈ $2,695
Why Exempt Private Company (EPC) for Drop Servicing?
Drop servicing (or service arbitrage) involves selling digital services to clients and outsourcing the fulfillment to freelancers or white-label agencies. As a founder, your main focus is on marketing, sales, and client relationship management, while the actual work is handled by third parties.
Ideal for
- Marketers and sales professionals
- Entrepreneurs with strong networking skills
- Founders looking for location-independent businesses
- Those wanting to start an agency without technical skills
Challenges to watch
- Maintaining quality control over outsourced work
- Managing cash flow between client payments and freelancer fees
- Handling cross-border contractor tax compliance
- Building trust and brand reputation
Key decision criteria
- Access to global payment processors (e.g., US LLC or UK LTD)
- Tax implications of hiring international contractors (W-8BEN for US)
- Clear B2B contracts and terms of service
- VAT/Sales tax rules for digital services in your clients' countries
Exempt Private Company (EPC) formation requirements
Minimum capital
1 USD
Standard timeline
1-3 business days
Expedited timeline
1 business day
Local director
Required
Registered office
Virtual office allowed
Notarization
Not required
Foreign founders must hire a resident Nominee Director.
Estimated breakdown (based on avg. $80,000 revenue)
Simulate with your own revenue →
VAT / Sales Tax
Standard rate 9%. Registration threshold: 1,000,000 SGD. The Goods and Services Tax (GST) is 9% as of 2026. Under the Overseas Vendor Registration (OVR) regime, foreign digital service providers must register and charge GST if their global turnover exceeds S$1 million and B2C sales to Singapore exceed S$100,000.
Banking & payments for Drop Servicing
Opening a traditional bank account (e.g., DBS, OCBC) as a non-resident founder is highly challenging and usually requires an in-person visit to Singapore. However, digital platforms like Aspire, Airwallex, and Wise offer fully remote onboarding for EPCs, provided you pass their strict KYC and compliance checks. Having a clear business model and proof of identity is essential.
Supported payment gateways
Remote-friendly accounts
Aspire
Top choice for modern startups and non-residents, offering fully remote onboarding, multi-currency accounts, and seamless integration with accounting software.
Airwallex
Great for e-commerce and global businesses needing virtual cards, payment links, and low-cost cross-border transfers.
Wise Business
Ideal for holding multiple currencies and paying international contractors with transparent, mid-market exchange rates.
Singapore incentives & advantages
Start-Up Tax Exemption (SUTE)
75% exemption on the first S$100,000 of normal chargeable income; 50% exemption on the next S$100,000.
Partial Tax Exemption (PTE)
75% exemption on the first S$10,000 of normal chargeable income; 50% exemption on the next S$190,000.
Exempt Private Company (EPC) formation steps
Step 1: Choose a compliant company name and reserve it via the ACRA BizFile+ portal (S$15 fee).
Step 2: Prepare the incorporation documents, including the company constitution and signed consent forms from the proposed directors and secretary.
Step 3: Appoint at least one resident director (Singapore Citizen, Permanent Resident, or eligible Employment Pass holder). Foreigners typically engage a Nominee Director.
Step 4: Secure a local registered office address in Singapore (P.O. boxes are not permitted).
Step 5: Submit the formal incorporation application and pay the S$300 registration fee to ACRA through a registered corporate service provider.
Step 6: Receive the electronic Certificate of Incorporation and Business Profile from ACRA, usually within 1 to 3 business days.
Step 7: Appoint a qualified Company Secretary within 6 months of incorporation.
Step 8: Open a corporate bank account and register for Goods and Services Tax (GST) if your annual taxable turnover is expected to exceed S$1 million.
Drop Servicing FAQ
Which country is best for a drop servicing company?
The US (LLC) and UK (LTD) are highly popular due to easy access to Stripe/PayPal, global credibility, and straightforward rules for paying international contractors.
Do I need to pay withholding tax when paying freelancers?
It depends on your company's jurisdiction and the freelancer's tax residency. For a US LLC, collecting a W-8BEN form from non-US contractors usually exempts you from withholding tax.
How do I handle VAT or Sales Tax?
You must track where your clients are located. If selling B2B, the reverse charge mechanism often applies. For B2C, you may need to register for VAT/Sales Tax in the client's jurisdiction once you cross specific revenue thresholds.
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Complete Exempt Private Company (EPC) guide
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Exempt Private Company (EPC) cost calculator
One-time and annual cost breakdown
🇧🇬 Drop Servicing — Single-Member Limited Liability Company (EOOD)
Tax 10.0% · formation $30
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Tax 15.0% · formation $265
🇨🇾 Drop Servicing — Sole Proprietorship
Tax 0.0% · formation $100
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