Over the past decade, Singapore has maintained its position as one of the easiest countries to do business. The economy is continually growing and developing, rising to become one of the giants within Asia. Setting up a Singapore company is easy, but, even with a simple process, mistakes are a possibility.
While many Singaporean residents who want to open a small or medium-sized business may believe they can set it up alone, it may not be necessarily true. The best advice is for residents and foreigners alike to seek a corporate service provider (CSP) to guide them through this process.
Foreigners who want to know how to register a Singapore company are advised to get a CSP to oversee their preparations and the procedure. Also, a CSP will familiarise them with Singaporean business law.
In this guide, we’ll discuss the requirements and procedures crucial to the setting up and incorporation of a Singapore company. More importantly, we’ll explore how to do it as quickly and as smoothly as possible.
By the time you’re done with this article, you’ll have a clear understanding of all the steps necessary for the incorporation of a Singapore company.
Types of Singapore Companies
The answer to how to register a Singapore company depends on many factors, including the type of company, capital, etc. Each has its advantages and disadvantages.
Just like any other economy, Singapore has several types of companies in its market. They include:
This is a company that is established by only one person who is the owner. This individual isn’t separate as an entity from the company and absorbs all risk, but is the sole owner of all profit as well. Their finances are tied together so to speak.
Private Limited Company
A company started by one or more people. There’s usually a lead person and then other shareholders. It’s not possible to list shares from this company on the Singaporean or any Stock Exchange as it is private-owned.
Limited Liability Partnership
This type of business is co-owned by two or more people, known as partners. The most popular type of Singapore company is the Private Limited Company. Why? Let’s take a look.
Incorporate a Private Limited Company in Singapore: Here’s Why
There are several limitations to owning a company anywhere. One of the most troubling is tax. In some countries, tax payments can be nearly half of the company’s income. This is a tragic situation for the everyday business person whose motivation is profit.
However, by registering a Private Limited Company in Singapore, owners only have to pay 0% to 17% tax on the company’s taxable income.
It’s different from sole proprietorship and limited liability partnership where the owners have to pay 0% to 22% of their personal income. The tax for such companies is done similar to personal income tax which isn’t favourable to the owners.
A private limited liability company can also have foreigners own all shares. Now, let’s take a look at the prerequisites for the incorporation of a Singapore company.
Register a Company in Singapore: The Basic Requirements
The organisation in charge of overseeing and approving the registration of a Singapore company is called the Accounting & Corporate Regulatory Authority(ACRA). To successfully register a company within Singapore, it’s necessary to follow all of their regulations.
The first and most important is enlisting the help of a corporate service provider or filing agent, who are the Professionals in guiding both locals and foreigners to register a Singapore company.
Investors in this category need the help of a corporate service provider recognised by ACRA. Here are several other requirements stipulated by ACRA.
The company director
When setting up a Singapore company, the company director must be a legal resident of Singapore and past 18 years of age.
The resident director doesn’t have to be active. Investors and owners can choose to name a director that will not be involved in the day to day activities of the company. However, the individual in question must not have declared bankruptcy previously.
The most crucial factor is that the individual resides in Singapore. That is, the person lives in Singapore and has a place of residence here, with the appropriate documentation to prove it. Eligible people are Singaporean citizens, Permanent Citizens of Singapore, and EntrePass Holders.
For those with a legal visa or an S-Pass, it’s nearly impossible to register much less to maintain a Singapore company. Entrepreneurs can determine this by sending an application to the Ministry of Manpower. If the Ministry deems the case to be an exception, they will grant an Employment Pass.
However, the chances of this happening are minimal. The Ministry runs randomised checks every quarter. As such, deportation is the penalty for directors and shareholders with only an S-Pass or a legal visa.
To register as a private limited company, a Singapore company needs to have at least one shareholder. The maximum number is not more than fifty, and becoming a shareholder is not affected by any other restraints.
These shareholders can be individuals or corporate entities; citizens or foreigners. In fact, when setting up a Singapore company, it can have 100% foreign shareholders.
Sufficient paid-up capital
Paid-up capital is the sum invested in the company by shareholders and investors. The minimum amount of paid-up capital to begin the incorporation of a Singapore company is recommended, at least $1.
This number is the same for any Singapore citizen and Permanent Resident. It’s also open to foreign entrepreneurs who wish to relocate to Singapore to begin their business.
A company secretary who is a natural resident of Singapore
To incorporate a Singapore company, there must be at least one secretary on hand at all times. Also, this secretary must be a resident of Singapore. The post of secretary cannot be left open for more than six months after registration.
If there is a problem filling this position on short notice, then a CSP may be able to act as secretary for the purpose of the company’s registration.
Company must have a physically registered address
The address given for a Singapore company’s incorporation must be an actual address with someone in residence. When setting up a Singapore company, business owners can’t just provide a PO Box.
They can use a residential address. However, there must be permission from respective housing authorities. For Housing Development Board (HDB) flats, there may be a need to get approval from the said Board.
The Urban Redevelopment Authority (URA) is in charge of private properties. Each organisation has its own rules and guidelines which companies have to follow.
Choose a company name and get it approved
The organisation that’ll approve the company name is the Accounting & Corporate Regulatory Authority (ARCA).
Depending on the name, getting a company name approved may take only a few hours to a few weeks. However, the process is online, so it’s convenient for foreigners as well.
To get a Singapore company name approved, there’s a need to adhere to the following rules:
- The name must not be obscene or vulgar.
- The name must not be identical to any business already operating within Singapore.
- Any other company must not have reserved the name.
- The name must not infringe on any trademarks.
These rules cover the bases, and if followed, the institute in charge will approve the company name in less than an hour.
However, if the name has the word “finance,” “legal,” “law,” “school,” etc., it may have to be sent to another government agency for further screening and approval. The reason for this is because other government agencies regulate these words.
Once the company name is approved, it’s reserved for 120 days. After fulfilling these six requirements, prospective investors are at the halfway stage of incorporating a Singapore company.
How to Register a Company in Singapore
There are only two more steps left before entrepreneurs can have a legal Singapore company
Step #1: Preparing the necessary documents
There are many documents required to register a company. These include:
- Company Constitution consists of fundamental principles in governing the Company. This document was formerly called the Memorandum & Articles of Association (M&AA).
- Signed Consent to Act for each director
- Particulars of each director, including identification and addresses.
- Signed Consent to Act by the company secretary.
- Particulars of each shareholder, including identification and addresses.
These are the general documents necessary for registration. However, depending on whether the company has an individual or corporation at the helm, some additional documents may be required.
- Proof of residential address. This can be an ID card of any sort, e.g., a driver’s license. Entrepreneurs can use a utility bill, as well.
- Passport copy.
- Identification card (this is for Singapore residents only).
- A summary of the business owner’s professional background. This can be in the form of a CV or even a link to a LinkedIn profile.
For corporate entities
Several more complex documents are necessary if corporations are acting as shareholders.
- Corporate Extract from the Company Registrar of the jurisdiction where the company is located. These documents will include the company’s name, registration number, and registered address. It’ll also contain the particulars and paid-up capital of each shareholder and the company’s business activities.
- A Certificate of Registration from the Company Registrar of the jurisdiction where the company is located.
- Authorised Resolution. The director (s) of the Singapore company are responsible for detailing the shareholder’s authorisation to hold shares in the company. Also, they will appoint a person to sign the Singapore company’s formation documents.
Depending on the CSP, there may be a need to supply some of the above documents for Know-Your-Client compliance checks required by Singapore’s Anti Money Laundering laws. Some CSPs may need all the documents listed above, and some may only need those used for the actual registration.
Step #2: Register for Incorporation
Up next is the incorporation of a Singapore company. If all documents and people are in place, the registration process won’t take that much time.
Setting up a Singapore Company:
After registration is complete and approved, ACRA will send a confirmation email. This email will contain the company registration number. This email can serve as an official e-notice of incorporation of the Company.
However, ACRA will issue a E-Certificate of Incorporation upon request with an accompanying fee. The E-Certificate of Incorporation is one of two documents necessary as entrepreneurs learn how to maintain a Singapore company. The next is a company business profile.
Company Business Profile
Like the last document, entrepreneurs can get the company’s business profile digitally. This document is essential as it contains vital particulars and details of the company.
Owners can receive it from ACRA upon request (after paying a small fee). The company business profile contains essential information like:
- Company registration number and date.
- Business activities.
- Registered address
- Particulars on company secretary, shareholder, directors, etc.
- Paid-up capital, and more.
Also, there’s a need to keep the soft copy of this document safely. It is crucial for doing other business-related activities like opening a corporate bank account, purchasing office utilities, etc.
GST stands for Goods and Service Tax. It’s Singapore’s equivalent to what many countries call Value Added Tax. New companies that expect their yearly turnover to be over S$1million need to register for GST tax and add the extra 7% to their clients. This tax must be remitted to IRAS at the time of GST filing.
Business Licenses and Permits
Depending on planned business activities, there may be a need for a business license or permit. Companies require to have a respective license or permit, if necessary, before operations begin.
First Board Resolution
After registering a Singapore company, shareholders must have a meeting to discuss some important matters and make resolutions. They must appoint a director to take charge of all affairs as well as make resolutions on whether to employ new staff at once.
The company Stamp is the company’s seal of approval. It needs to contain the name of the company and the registration number.
How to Maintain A Singapore Company
For the maintenance and renewal of a Singapore company, there’s a need to file a few documents regularly. These documents are:
For the maintenance of a Singapore company, there’s a need to maintain correct and balanced books, ledgers, and accounts regularly. Using this information, companies will file a financial statement annually.
Corporate tax filing
All Singapore Companies require to e-file its corporate tax online with The Inland Revenue Authority of Singapore (IRAS) Companies, filing deadline at 30th November.
The annual general meeting is essential for all businesses and to be held once in every calendar year.
This should be e-filed after the AGM meeting, within the prescribed time.
Companies can choose to measure their financial year as it suits them. However, to maximize tax incentives, Companies may consider setting their financial year no longer than 12 months. This will set the frequency for tax filings as well as annual financial statements.
Registering and further renewal of a Singapore company is relatively simple. With the steps we discussed above, it’s possible to set up and incorporate a Singapore company with zero stress.
However, here at Consulti, we can make this process even easier. Business owners and entrepreneurs can quickly establish and maintain a company with no hassle. Focus on offering the best service and leave the red tape to the professionals.