The city-state consistently ranks as the world’s top destination for doing business, which is influenced by its tax exemptions for startups, robust economy, established capital markets and financial system, and strategic geographical location.
For investors and organizations looking to extend their presence in Asia, they’re encouraged to incorporate their company in Singapore. Read on to learn everything there is to know about business registration in Singapore.
Singapore company registration requirements
To incorporate a company in Singapore, several requirements need to be met. These are outlined below:
Directors of a Singapore company can be both Singapore residents and foreign nationals. Companies must have at least one Singapore-resident director and corporate directors are not permitted. “Singapore-resident” is a person who is either a Singapore citizen, a Singapore permanent resident, or the holder of an Employment Pass.
Companies in Singapore need to have a minimum of one shareholder and no more than 50. Shareholders can be Singapore citizens, permanent residents, or foreign nationals. 100% foreign shareholding is permissible and shareholders can also be corporate entities.
A company secretary in Singapore is responsible for ensuring that a company complies with the necessary provisions and regulations. Companies are required to appoint a company secretary — who must be a Singapore resident — within six months of incorporation. The company secretary also ensures that board members maintain their responsibilities towards the company while updating statutory registers such as the register of substantial shareholders.
To set up a company in Singapore, the minimum paid-up capital is S$1. At any stage post-registration, the share capital can be increased.
A company name must be approved by Singapore’s Accounting and Corporate Regulatory Authority (ACRA). Companies are restricted from commencing business activities until their company name is approved.
It is mandatory for companies to have a local registered address in Singapore, which cannot be a PO Box. All of a company’s statutory documents should be kept at the local registered address.
What are the types of companies in Singapore?
There are three types of companies that operate in Singapore. Each company has different requirements that are distinct from one another. These are specified below:
Private Limited Companies (Pte Ltd)
A private limited company (Pte Ltd) is the most common business type in Singapore.
When compared to other types of companies in Singapore, a private limited company is the most advanced entity. It also happens to be more flexible and scalable than other company types.
A private limited company is characterized by having fewer than 50 shareholders and not having its shares publicly accessible.
Individuals and companies can be shareholders of this type of company.
While this form of company is straightforward, it carries a greater element of risk. This is because the owner is personally liable for their company.
Under Singapore law, a sole proprietorship is not a standalone entity. Hence, the owner and the business are considered as one.
While the owner can be an individual or a legal entity, they must be either Singapore citizens, permanent residents, or holders of an EntrePass.
In this form of entity, the personal assets of an owner are not protected from the business risks of a company. Consequently, it’s recommended that aspiring entrepreneurs avoid registering their company as a sole proprietorship.
A sole proprietorship is taxed at personal income tax rates and exempt from tax incentives.
Limited Liability Partnership (LLP)
A limited liability partnership (LLP) combines the features of companies and partnerships. In this form of entity, an individual partner’s own liability is typically limited.
As a legal entity separate from its partners, a limited liability partnership is owned by a minimum of two partners, individuals, or body corporate members. It is generally established to carry a profession — such as architects or lawyers — who wish to join and form a practice in their shared field.
In a limited liability partnership, profits are taxed at the partners’ personal income tax rates if the partner is an individual. Conversely, profits are taxed at the corporate tax rate if the partner is a body corporate.
A limited liability partnership is only available to Singapore citizens, permanent residents, or holders of an EntrePass. It is best suited to legal entities formed between two and 20 partners (those above 20 partners need to register as a Pte Ltd).
Steps to establishing a new company in Singapore
Not only is setting up a new company in Singapore fast and cost-effective but it can also be done entirely online.
The key steps involved are having a company name approved by ACRA, preparing the necessary company registration documents, and registering the company with ACRA.
The only fees are a S$15 company name application fee with ACRA and a S$300 government fee for the registration of the company with ACRA.
Step 1. Approval of company name
Prior to registration, companies in Singapore need to have their name approved by ACRA. This is a straightforward online process that is subject to the below guidelines:
A company name MUST NOT:
- Infringe on any trademarks
- Be identical to any existing business in Singapore
- Be classified as vulgar
- Be reserved by another business
Provided that a company name adheres to ACRA regulations, the approval process generally takes less than an hour. However, this process may be delayed if the name is referred to another government authority for additional approval (which can happen if the name contains regulated business words like “legal” and “finance”).
Once a company name has been approved, a company can reserve the name for a maximum of 120 days. If the name is not incorporated during that time, then it becomes released and available to other parties.
Step 2. Preparation of company registration documents
Upon approval of a company name, the next step is to ensure the below documents are ready. These documents are required by ACRA and must be in English or officially translated into English:
- Company Constitution (formerly known as the Article of Association). The standard Singapore Company Constitution, consisting of terms that are deemed fair for all parties involved in the incorporation, is available from ACRA.
- Signed Consent to Act as Company Secretary by the company secretary.
- Signed Consent to Act as Company Director by each director of the company.
- Identification and residential address details that apply to each director and company shareholder.
In accordance with AML regulations, a company’s Corporate Service Provider must conduct a Know Your Customer (KYC) due diligence. To do this, the following supporting documentation will typically be required:
- Verification of ID and address proof documents
- Professional background pertaining to officers and stakeholders of the proposed company
Step 3. Registration with the Singapore Company Registrar, ACRA
After all incorporation documents have been prepared, it’s now possible for a company to be registered with ACRA.
This is an online process that generally takes less than an hour. However, if the company registration has to be passed to another government agency for further approval, it can take several weeks to finalize this process.
What happens after company incorporation?
- Certificate of Incorporation - Companies will be sent an email from ACRA that confirms the registration of their company. This is their official Singapore Company Incorporation Certificate that includes a unique business registration number.
- Business Profile (Bizfile) - Companies also receive a free business profile from ACRA. This profile essentially acts as the online business card of the company.
- Business License Application - After registering and before starting a business, companies may also need to apply for business licenses. This will be dependent on the type of business being conducted.
- Corporate bank account - Once registration is complete, companies are able to open a corporate bank account. This account can be opened with any of the major banks in Singapore.
- Goods and Services Tax - For companies that anticipate an annual turnover of more than S$1 million, they must register for the Goods and Services Tax (GST).
As one of Asia’s top markets for conducting business, there is minimum red tape when setting up a business in Singapore. In addition, strong investment and trade opportunities, combined with a low corporate tax rate, make Singapore one of the most attractive business hubs in the world.
The process for company registration in Singapore includes the selection of an appropriate company name, completion of the required documents, and registration of the company with ACRA. This is a fast, simple, and cost-effective process that can be completed online.
Companies in Singapore must have at least one director, shareholder, and resident company secretary. They must also have a registered Singapore address and startup capital of at least S$1.
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