For just S$1 you could set up a company in Singapore. Sounds like a sweet deal right?
In 1995, The Heritage Foundation set out to find a way in which to compare countries around the world in their levels of economic freedom.
Economic freedom, it’s been demonstrated, has a direct correlation between income growth, health, life expectancy, comfort, and stability.
As such, it’s important to measure economic freedom and use the models of high-ranking countries to determine policy change in lower-ranking countries.
The method they introduced, and which has been largely accepted, is called The Index of Economic Freedom.
The index takes into account several factors pertaining to economic and governmental policy - namely, rule of law, size of government, regulation, and market openness.
The index ranks countries based on, essentially, how free their citizens are to transact business as they see fit.
The more free, the higher the score.
Scores are recalculated annually, and countries are ranked based on their economic freedom, with the freest being at the top of the list.
Singapore, as it turns out, is near the top.
Only behind Hong Kong, it should come as no surprise that Singapore is one of the wealthiest, healthiest nations in the world.
Thanks to the economic freedom allowed by the government of Singapore, it’s extremely easy to start a business there.
Let’s walk you through the process of registering your business in Singapore!
Choosing a company name in Singapore
In order to start a business in Singapore, the name of your company needs to be approved.
There are only a few requirements.
First, it must not be identical to an existing company.
Second, it can’t be obscene or vulgar.
Third, it cannot be reserved or trademarked by anyone else.
It will take a few days to get the approval for your name. You can expedite this process by leaving out certain words from your company’s name.
Words like “finance”, “legal”, and “broker” are subject to additional regulations that may slow down the approval process. There’s also a S$15 name approval.
Once your name is approved, it will be reserved for you for 120 days, during which you must register your company. If you don’t, the name will be freed up for someone else to grab.
Assemble your documents.
There are a few documents you need in order to register a company in Singapore.
First, you need to establish a Company Constitution.
A Company Constitution is a document that outlines the operations of the business, including its internal workings, its name, and what it does.
Singapore's business-governing body, ACRA, has a template that works for most businesses to make the process easier.
In addition to the company constitution, you also need a signed Consent to Act as Director for every director of the company.
You’ll also need the same from the intended Company Secretary.
Finally, you’ll need to submit the address information for each director.
Note that, in Singapore, a company needs only 1 director, 1 company secretary, S$1 in start-up capital, and at least one shareholder.
You will also need an address in Singapore for receiving documents.
Conduct a Know-Your-Customer Interview with your Corporate Service Provider
If you’re a foreigner, you are more than welcome to start a business in Singapore!
However, in compliance with international regulations, you will need to enlist the services of a Corporate Service Provider.
Before you register your company, you’ll give them a few documents pertaining to your background.
You also may need to speak with them in person or over the phone, something called a Know-Your-Customer interview.
This measure is in place to defend against money laundering practices in Singapore, which interfere with the free nature of the Singapore economy.
Different CSPs require documents, so check with them and make sure everything is in order before continuing.
The registration process will take about an hour, and costs S$300.
Afterward, you’ll be ready to conduct business!
All told, the process for registration of a company in Singapore can take a little as three days.
That’s faster than almost any other country on the planet.
It’s no surprise, then, that Singapore has been voted the best place to do business several years in a row!
That’s a very basic rundown for opening up a small business in Singapore.
Below, we’ve included a quick reference for opening a Singapore business, as well as some explanation of certain requirements.
Other Things to Note When Starting a Business in Singapore
Here’s a quick reference of things to note about the business formation process in Singapore:
- At least one director must be a Singapore resident. This is embodied in the requirement above of the submission of address information by each director. Proof of address will be required.
- There must be at least one shareholder of the company. This means, practically, that the company must be owned by at least one person. This prevents money laundering by making it difficult to establish faceless shell companies in Singapore.
- There must be a Company Secretary based in Singapore. The company secretary is the warden of official documents for the company, for things like taxes and compliance.
- The company must have a Singapore address - a physical address, not a post office box.
- The company must have a paid-up capital of at least S$1. Another money laundering countermeasure, having one dollar of paid-up capital ensures the company has a concrete, monitorable bank account. Every business will likely have far more paid-up capital than the minimum requirement, simply from the nature of doing business.
- Some businesses require licenses or permits from the government, including private schools and liquor distributors. Check with your legal source for more information about your particular situation.
- You must have open office hours each weekday for at least 3 hours.
- If your business is international, you will need to register with Singapore customs
If you own an international business, you need the most efficient and affordable methods for collecting and sending payments. Statrys is here to provide just that.
If you have any questions about payments for your international business, give us a shout!