This guide takes you through the steps in planning how to register a company in Singapore.
Singapore has consistently been recognised among the world’s best places to do business and remains among the top choices for business investors. Compared to other countries considered as business hubs, Singapore offers one of the easiest and quickest processes of business registration, which attracts investors to start a business in Singapore.
Some of the reasons behind the decision of not only international investors but also major international banks, multinational organisations and financial institutions all over the world to establish their businesses and branches in Singapore, are the following:
- Low corporate tax rate – The company tax rate in Singapore is 17%, with a tax rebate and further concessions available on the first $200,000 of profit each year (to bring the average tax rate on that income to around 6.2%). The Singapore Government also provides a range of tax incentives and grants to attract businesses to Singapore, including an even lower rate of tax for startup companies in their first three years of operation. Dividends paid by the company are tax-free to the recipients, whether residents or non-residents of Singapore.
- Comprehensive double tax treaty network with countries in ASEAN and around the world
- Sensible employment law regime allowing for appropriately qualified foreigners to work in Singapore
- Excellent intellectual property protection
- The established rule of law based on the English legal system. Singapore is also one of the largest arbitration centres in the world.
- Access to a comprehensive and highly sophisticated banking network
- 100% foreign ownership of Singapore companies is permitted
- Share transfers are freely allowed, as is the issuance of new shares by a company.
If you have decided that the above is a good enough reason to start a business in Singapore, you may be wondering from where to start…
We have put together this simplified step-by-step guide on how to start a business in Singapore, which should answer all of your questions.
Step 1: Time to decide
There are a number of things worth deciding before you embark on the journey of business registration in Singapore.
Decide the type of business entity
The most commonly used types of business in Singapore are:
- Private limited liability company (Pte. Ltd)
- A Singapore branch of an overseas company
- Representative office
Other entities include:
Refer to the below table to obtain a general idea on the main differences between the types of businesses allowed in Singapore:
|Sole proprietorship||Partnership||Limited partnership||Unlimited liability partnership||Company|
|Definition||A business owned by one person||An association of two or more persons carrying on business in common with a view to profit||A partnership consisting of two or more persons, with at least one general partner and one limited partner||A partnership where the individual partner’s own liability is generally limited||A business form which is a legal entity separate and distinct from its shareholders and directors|
|Owned by||One person||Generally, between 2 and 20 partners||At least twp partners; one general partner and one limited partner. No maximum limit.||At least two partners, no maximum limit.||Exempt Private Company –20 members or less and no corporation holds beneficial interest in the company’s shares|
Private Company – 50 members or less
Public Company – can have more than 50 members
For this article, we have focused on how to start a private company in Singapore, which is usually the first choice of foreign investors.
Select the name of your company
Every business needs a name to differentiate itself and to make it easy for others to find it. The company name selected must be unique and not used by others.
Choose your business activities
When setting up a company in Singapore, you will be asked to list up to two main business activities using the Singapore Standard Industrial Classification Code. Taking a look at those and matching them with the type of business activities you will be performing will make you save some time during the registration procedure.
Check for licensing requirements
Once you have decided on your business activities, it is worth checking whether they require licensing. Businesses such as restaurants, employment agencies, financial services, travel agencies, etc. require licenses to operate legally in Singapore. Some licenses have certain conditions that have to be met, such as a minimum paid-up capital, professional qualifications, etc.
Decide on shares and shareholders
The next decision to be made is on the amount of issued capital, ie the total amount that shareholders will pay for their shares. You usually need only SGD 1.00 to register a company in Singapore. Very often, however, certain licenses may require a higher paid-up capital, or if you plan to finance your business activities through loans, banks may request to see a higher than SGD 1.00 registered capital. Note that you will need to deposit the capital into your company’s bank account immediately after the company registration, and you’ll always have the opportunity to increase your registered capital subsequently.
You will also need to decide on who will be your shareholders and their stake in the company. A minimum of one shareholder (a local or a foreign person or corporation) is required. For a more sophisticated company structure, you may need to think about different classes of shares, but for a simple and straightforward structure, you will likely issue ordinary shares only.
Decide on officers in your company
The next step is to decide who will be your appointed officers. At the time of registration, you will need to provide their identification details, contact information (telephone number and e-mail address) and residential addresses, so deciding ahead and discussing the opportunity with them will certainly save you time.
Officers of a company include the following:
- Director – The company can be registered with one director and, if needed, you can add more at a later stage. If you are the only shareholder in the company, you can also act at its director. However, if you are a foreigner or a foreign company who is incorporating a Singapore company, you should keep in mind that one of the directors must be a citizen, a Singapore permanent resident or an EntrePass holder. A director may also be an Employment Pass (EP) holder. However, an EP holder wishing to become the director of a local company must first get a Letter of Consent (LOC) from the Ministry of Manpower.
- Company secretary – A company must appoint a secretary within six months from its registration. The secretary must be a natural person (not a company) and should resident in Singapore.
- Chief executive officer and/or managing director (not mandatory) – A company can choose to appoint a chief executive officer (CEO) and managing director to manage and oversee all or part of the company’s business.
- Auditor (depending on type of business and revenue) – Every company must appoint an auditor within three months of incorporation, unless it is exempted from audit requirements.
- Decide on who will act as the director(s) of your company. A Singapore company can be registered with a minimum of one director. If it is your company, you can act as the director of your company. There is no upper limit on the number of directors. Additional directors can be added anytime later as per your company’s needs. If you are a foreign person or a foreign company who is incorporating a Singapore company, note that one of the directors must be a resident of Singapore. If you are relocating to Singapore, you may be able to act as the resident director after the approval of your relocation visa; alternatively, the firm that you have hired to incorporate your company can offer the services of a resident director. Discuss your specific circumstances with your professional services firm to decide how best you can satisfy this requirement.
Decide on the registered address
Registered address is the place where all communication and notices to your company are addressed to, and it is also where your company’s statutory books are kept. As you will be requested to provide the registered office address at the time of application for your company registration, it is a good idea to start looking for offices ahead, or discuss your options with your corporate service provider. Most of them provide registered office services, as well.
Decide on company constitution
The constitution of a Singapore company is a legal document that sets out the details of the essential characteristics of the company, rules and regulations of its governance, describes how the operations are carried out, and establishes the rights and obligations of the company’s shareholders, directors and company secretary.
Step 2: Time to register your company
Once all of the points under step one has been decided, the registration procedure entails two simple actions:
Reservation of a company name
The company name needs to be reserved, and the application is filed online. If the proposed company name does not conflict with any existing names and does not fall into the category of undesirable names, it will be approved and reserved for 60 days.
Apply for company registration
After the company name has been approved and reserved, it is time to file the company registration application form. The application once again is made online, and the following information is submitted with the form:
- Details of business activities
- Details of the shareholder(s) and shares
- Details of the company director(s)
- Details of the company secretary
- Details of the registered office
- Constitution of the company
When everything is in order, the company registrar will send an e-mail confirming 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 SGD 50, and it takes approximately between 3-5 working days.
Step 3: Post-registration
Now that the company is registered you can move forward to the post-registration activities which include:
- Buying a company seal
- Opening a bank account
- Issuing share certificates
- Setting up statutory books
- Apply for business license(s), if applicable
- Appoint auditor, if applicable
- Register for Goods and Services Tax, if applicable
- Set up a bookkeeping and payroll system
Important for foreigners
If you are a foreigner wishing to start a business entity in Singapore, you will need to:
- Engage the services of a registered filing agent (eg. a law firm, accounting firm or corporate secretarial firm) to submit the online application on your behalf
- Employ a director who resides in Singapore (if applicable)
Starting a business in Singapore is a rather straightforward and simple process. By following this step-by-step list of how to start a business in Singapore, in most cases, you can register a new business entity in a matter of days, if not hours.
However, there are several issues such as type of business, license requirements, or if the founder is a foreigner, which necessitates obtaining expertise guidance to ensure that the company is set up according to all requirements and regulations. Acclime specialises in making your business set up easy, if you need help starting your Singapore company, feel free to contact us.
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