What is a private limited company?
A private limited company is a locally incorporated company where the maximum number of shareholders is limited to 50. Besides being the most popular structure in Singapore, it is also a common choice to set up an investment holding structure starting with a Singapore entity before expanding/investing to the rest of Asia.
The private limited company entity type is limited by shares, and it is a separate legal entity from its shareholders, meaning it is also recognised as a taxable entity. Shareholders of a private limited company will not be liable for its debts and losses beyond the amount of share capital they each own.
Advantages of setting up a private limited company.
Corporate bank account
Fast setup time
An incorporation occurs instantly within one business day if there are no complications.
It can be fully foreign-owned business and does not require for a local shareholder to be involved. If needed, joint venture with a local partner is seamless as there are no restrictions on the type or percentage share of ownership for such entity.
Relaxed tax liability
Profits taxed at corporate tax rates and dividends are tax-free in the hands of shareholders just like any other fully locally-owned limited company. The effective tax rate for the first S$300,000 of annual profit is at 8.5% and 17% thereafter, one of the lowest across the whole of Asia. Additionally, newly incorporated companies are entitled to tax incentives and exemptions regardless of the type of ownership (foreign/local).
Here’s what you need to register a private limited company.
At least 1 shareholder
A resident director
A company secretary
Address in Singapore
At least $1 in capital
Additionally, you will need:
Annual statutory filing
What happens after registration.
- Certificate of Incorporation – the Company Registrar will send you an email and it confirms that your company has successfully been incorporated. Also, you will receive your Company Registration Number. This is an official certificate of incorporation. Should you wish to obtain a physical certificate, the Company Registrar will charge you at S$50 and it takes approximately between 3-5 working days.
- Company name and registration number
- Previous names for the company, if any
- Incorporation date
- Principal activities
- Paid-up capital
- Registered address
- Shareholders details
- Directors details
- Company Secretary details
After obtaining email notification and company business profile, you can proceed with all legal and contractual tasks in Singapore such as:
- Opening a corporate bank account – you can opt to open a bank account with any local or international banks in Singapore
- Goods and Services Tax (GST) registration – all businesses that have annual revenue of more than S$1 million will need to register for GST. Once you have received your GST registration, you will get to charge your customers an additional 7% of the goods and services you provide to the Singapore authorities.