COUNTRY
Singapore
SINGAPORE COMPANY INCORPORATION
Despite uncertainty in the economy and the ongoing Covid 19 pandemic, Singapore has been ranked the 2nd best in the world for doing business by the World Bank’s ease of doing business survey for over a decade. Aside from being strategically located in the middle of Southeast Asia, Singapore has one of the best tax systems. A well-structured Singapore Company will only be required to pay an effective tax rate from 0% to 17% annually.
Singapore Immigration Authorities (ICA) provide highly flexible and welcoming immigration policies to foreign individuals who wish to incorporate a company in Singapore. In 2020, the global anti-graft movement ranked Singapore in the top ten for the least corruption occurrence nation.
According to the Singapore Accounting and Corporate Regulatory Authority (ACRA), a foreigner who wishes to register a company in Singapore through online and remote applications must engage a qualified registered filing agent to submit the company registration. Relin Consultants is a licensed filing agent in Singapore, and our associates have guided multiple individuals and companies for business registration in Singapore.
If you have further inquiries about company incorporation in Singapore and require assistance, contact us at Relin Consultants or email our consultants at enquiry@relinconsultants.com.
KEY REQUIREMENTS FOR COMPANY REGISTRATION SINGAPORE
TIMELINE OF SINGAPORE COMPANY INCORPORATION
Shareholder and Shares
As per the Singapore Accounting and Corporate Regulatory Authority. A Singapore-registered company must have at least one shareholder. There is no restriction on the minimum issued capital. Either an individual or corporate shareholder can register a company in Singapore with just $1 of share capital. A Singapore-incorporated company can have up to 50 shareholders.
Share Capital
The minimum requirement for starting a business in Singapore in terms of paid up capital is S$1. You may increase your Singapore company share capital at any time as you wish by communicating with your Singapore company Secretary about your intention to raise the share capital.
Directors
It is a mandatory requirement set by the Singapore government to appoint at least one Singapore resident director before you can register a company in Singapore.
The Singapore resident director can be a Singapore Citizen, Permanent Resident, or holder of a Singapore work visa (EntrePass or Employment Pass). Relin Consultants can provide you with nominee resident director services if required.
Company Secretary
It is a mandatory requirement for a company to appoint a qualified company secretary within six (6) months after the date of company incorporation.
A foreign resident cannot act as the company secretary of a Singapore company. They must be residents of Singapore.
Registered Office Address
A Singapore company must at least have a local registered office address.
The Company is required to maintain all of its statutory documents at the company’s registered office. While the address cannot be a PO BOX address, you may use your company secretary’s office address. In practice, most Singapore companies that do not possess an office use their company secretary/virtual office as the company’s registered office.
TYPES OF BUSINESS ENTITIES FOR SINGAPORE INCORPORATION
According to Accounting and Corporate Regulatory Authority Singapore (ACRA), a business investor can choose from 5 basic structures for business entities.
SOLE PROPRIETORSHIP/ SOLE TRADER
A sole proprietorship business is characterized by a single business owner who has complete control over how the company is conducted. Every decision made by the sole owner holds the ultimatum for the company. A single individual or corporation can also run this type of company.
However, there are no partners in the sole proprietorship business. Examples of individuals who opted for this type of business entity are low-risk businesses such as clothing lines, food or restaurants, and small retail or grocery shops. The sole owner will be subjected to unlimited liability in terms of company liability. This refers to the amount of the business debt the owner will be subjected to, which can be paid through their assets.
The taxes that will be imposed are also subject to the owner’s individual income tax rate. In some way, this proposed a less strenuous and complicated matter for the business owner.
GENERAL BUSINESS PARTNERSHIP
This type of partnership is a business entity that requires a minimum of two partnerships to establish the company. The maximum number of partnership members is up to 20 people. For this type of partnership, all the decision-making works under the consensus model through a democratic approach or delegation.
Discussion and decisions are made collectively among each partner to encourage satisfaction between each member. This is because a discontented partner can be put out of the partnership by dissolution.
It is worth noting that each partner’s actions are held responsible to the other partners. Common examples of businesses that employ ordinary business partnerships are law firms and accounting companies that provide services to others. Regarding liability, this type of partnership proposes unlimited liability and debts to each partner. The taxes are sanctioned at each partner’s individual and personal tax rate.
LIMITED PARTNERSHIP (LP)
A limited partnership can be considered an extension of a general business partnership by combining a general partner with a limited partner. It must consist of at least one general partner and one limited partner. There will be no limit on the number of each general and limited partners. Limited partners are not entitled to any part of the business management, but they are not designated with unlimited liability, unlike the general partner in the partnership.
Additionally, the partner’s citizenship can be either local or foreign. One thing to note about this type of partnership is that each decision made within the company partnership is subjected to the partnership agreement.
In terms of taxes imposed on this kind of partnership, a personal income rate is subjected to each partner. This means that each partner might be imposed with different tax rates due to the differences in their personal income gained from the company partnership.
LIMITED LIABILITY PARTNERSHIP (LLP)
This partnership is similar to the Limited Partnership (LP) because it started with a general partnership. The only difference is that a limited liability partnership gives out a limited liability to each partner. This means that the debt imposed by the partnership will not affect the personal assets of one partner who are not related or responsible for the other partner’s actions and mistakes.
This provides a much better option as each partner can protect themselves within the partnership. Despite that, all partners can still partake in the management of the business resulting in a much more formal structure of the company. Most importantly, the taxes imposed on this type of partnership is similar to the Limited Partnership.
Taxes are sanctioned individually based on each partner’s personal income. Overall, Limited Liability Partnership (LLP) is identical to the Limited Partnership (LP) but with more significant benefits, such as limited liability for each partner.
Limited Liability Partnership (LLP) also allows the partnership to bring in new partners and let old partners out based on the agreement, as there are no limit numbers on the partners as long as two people are present in the partnership.
LIMITED LIABILITY COMPANY (LLC)
For a business structure that employs the structure of a Limited Liability Company (LLC), the business company can be owned by three different types of ownership. It can be:
- An Exempt Private Company with 20 members or fewer. None of the shareholders can be in any form of corporate partnership that can gain benefits for the company shares.
- a Private Limited Company (Pte Ltd) with a maximum of 50 members or fewer.
- a Public Limited Company is entitled to have more than 50 members.
The vast majority of these type of business entity indicates that the shareholders have certain rights in the company based on the number of their shares within the company. In decision-making, directors require the shareholder’s approval. However, the director’s citizenship status must be local to where the company is established. These types of business entities are very flexible, and the liability of every shareholder is limited.
Similarly, it means the company’s debts are not liable to the directors of a company limited by shares. Lastly, in terms of taxes, it is imposed by the corporate tax rate, not by the income tax. Thus, no sorts of personal assets are at risk for the shareholders.
If you have further inquiries about the ins and outs of Singapore’s business entities, contact us at Relin Consultants and email our experts at enquiry@relinconsultants.com.
To sum it up, there are five main business entities in Singapore, ranging from an individual business, a small company, and a company with 50 members and shareholders. Every business is unique, so to start your own business, take the time to consider which critical option and deployment of business entities will suit your business market the most.
PROS AND CONS OF SINGAPORE COMPANY FORMATION
Why incorporate in Singapore? Below, you will find the advantages and disadvantages of business formation in Singapore.
PROS
Ease of registration
Starting a company in Singapore is a straightforward process and can be completed within 2 to 3 business days. Name reservations can be completed within hours.
Fewer compliance requirements
A Singapore company registration has minimal compliance requirements; annually, the company also has fewer obligations as compared to nearby jurisdictions. This provides various benefits, especially to a start-up company, allowing its management more time to focus on its business expansion and less on compliance.
Government Tax Incentives
As part of the Singapore government’s effort to attract foreign investors. The tax authorities have been consistently offering tax incentives to Singapore companies. Both newly Singapore incorporation companies and existing companies can enjoy multiple tax incentives annually. You can refer to Singapore corporate tax for additional information.
Strategic locations
Company formation Singapore can enjoy added benefits from Singapore’s strategic locations. And similar time zone to other Asian markets such as Hong Kong, Vietnam, and Japan. Hence, setting up a business in Singapore is the gateway to the Asian market and has become the first choice for many companies and start-ups who wish to invest in the Asian Pacific region.
Companies, especially those undertaking trading activities involving shipping, importing, and exporting goods, can benefit further.
Reputable world-class business status
Singapore has various reputable presence within the worldwide economy. This can be seen from the nation’s continuous success in ranking as the third most open to trade among 189 other countries in the World Bank annual survey report in 2020. The nation is ranked third for global competitive economies in the World Economic Forum’s Global Competitiveness Report in 2022.
Excellent corporate regulation
Due to greater political and economic stability, the jurisdictions extend excellent and stable corporate regulations. There are trademarks, intellectual property, labor, and many more laws regulated thoroughly by the Singaporean government. These laws are comprehensive and efficient in protecting the rights and regulating the business market in Singapore.
Business grants
Singapore government offers various business grants to emerging business companies and start-ups. The business grants are available not only to local businesses but also foreign business owners. Various business grants are offered in multiple business areas, especially in research and development (R&D) in the area of technological advancement.
Double taxation treaties
Singapore’s vast network is not limited only to the ASEAN countries but to other jurisdictions. Companies can take advantage of the double taxation treaties resulting from Singapore’s diplomatic relations. There are approximately 96 double taxation treaties in Singapore.
Companies and business investors can significantly benefit from the minimization of withholding tax for their international subsidiary companies from these double taxation treaties.
CONS
High labor cost
Employee cost is relatively higher in Singapore as compared to nearby Southeast Asian jurisdictions. This is partially due to the stronger Singapore currency.
Hiring foreign workers is difficult because the Singaporean government values local labor and work opportunity for their residents. Labor-intensive companies must weigh the benefits properly before incorporating in Singapore.
High rental cost
Office and residential rental costs are significantly higher in Singapore. This is because owning property is very restricted in Singapore.
Stricter regulations
Opening a corporate bank account in Singapore is significantly more challenging than in other jurisdictions. To open a corporate bank account in Singapore, companies must provide evidence such as their contracts with potential customers, detailed business activities, and estimated profit to the banks.
FAQs
Can A Foreigner Incorporate A Company In Singapore?
Yes, any individual may and can register a company in Singapore; there are no restrictions on foreign shareholding. Hence a foreigner can hold 100% shares of his/her Singapore Company. However, any individual who has been convicted of any legal offense or bankruptcy will not be allowed to own any shares in a Singapore company.
How Do I Check If A Company Is Registered In Singapore?
You can easily verify/check whether a Singapore Company is registered in Singapore by following the steps below.
Step 1 – Kindly go to the Singapore government (ACRA) ‘s free search platform https://www.bizfile.gov.sg/
Step 2 – Key in the Company Name or the UEN Number of the Singapore Company.
Step 3 – Follow the instructions to verify the captcha, and then you will be redirected to a screen where you can see the company profile.
Alternatively, you can check the Singapore certificate of incorporation issued by the authorities.
How Do I Setup A Company In Singapore?
A foreigner wishing to company setup singapore must appoint a local corporate service provider such as Relin consultants.
Singaporean or permanent residents can open a company in Singapore themselves. Although the process is relatively easy, many individuals who self-register often create many errors. Hence it is advisable to appoint a professional firm.
What Are The Types Of Company Structures In Singapore?
Five (5) main types of business structures are –
There are 5 main types of business structures available for company registration in Singapore –
Sole Proprietorship
This is the easiest and cheapest option available to Singaporean. Foreigners are unable to set up a sole proprietorship in Singapore. Generally, Sole Proprietors are not required to submit audits or perform annual filling of the business. Company tax return will be accompanied together with the personal tax return of the owner. The owners are subject to all the debts owned owed by the company personally.
Partnership
A partnership is similar to a sole proprietor but formed by more than one owner.
Limited Liability Partnership
A limited liability partnership is a combination of a Private Limited Company and a conventional partnership with the advantages of a private limited company.
Private Limited Company, (Pte Ltd)
Setting up a private limited company in Singapore is the most common and preferred company structure. The company will be treated as a separate legal entity from the owners/shareholders. Hence it provides the best form of personal protection.
Public Limited Company – (also known as Limited)
This is a publicly listed company in Singapore.
Can I Register My Company In Singapore Remotely?
Yes, you can register your company remotely. You can engage a professional service firm like Relin Consultants to assist with company formation Singapore.
What Are The Requirements For A Foreign Investor To Start A Company In Singapore?
To register a business in Singapore the following minimum requirements must be met by the foreign investor.
- Must appoint a resident director
- Must appoint a company secretary
- Must have at least a registered office address.
- Share capital of S$1 at least.
How To Reserve A Company Name In Singapore?
Choosing and changing a company name in Singapore involves ACRA.
To reserve your company name, you must:
- Check whether the proposed company name is available or not. This can be done through the Registrar on the BizFile+ portal.
- After making sure your proposed company name is available, you can register your business company name via the same portal, BizFile+.
If the company name is approved, it will automatically be reserved for 120 days. The company name reservation can expire. Others can use the company’s name if you fail to register/incorporate the company within the stipulated reservation period.
What Are The Government Fees And Other Costs Government Fees And Other Costs Are Required To Register A Business Company In Singapore?
ACRA levies administrative fees in the total of S$315 for business registration Singapore.
Do You Offer A Free Consultation If I Have Some Questions About Registering A Company In Singapore?
Yes, Relin Consultants can advise you on all the information regarding a company incorporation Singapore. You can reach out to us at enquiry@relinconsultants.com
How Long Will It Take To Register My Singapore Company?
A Singapore company can be registered in 2 to 3 business days. If the selected company name involves sensitive words, it might be referred to the authorities for additional approval.
Will I Need To Visit Singapore To Incorporate My Company?
You do not need to visit Singapore. The incorporation process can be done remotely. Our team will require notarized copies of your identification documents to complete the incorporation.
Can I Run My Singapore Company From Overseas?
Yes, you can operate your Singapore company without being physically present in Singapore. Relin Consultants can assist you with the annual compliance and provide operational support on matters such as payroll, banking, and others if required.
What Are The Major Types Of Business Entities In Singapore?
In Singapore, a Private Limited Company (Pte Ltd) is the major business entity opted for by both local and foreign entrepreneurs. This is because Private Limited Companies provide excellent benefits for the shareholders, such as limited liability and distinct legal identity between the company and the owner. The company can get sued or hold liabilities, but the shareholder will not be affected by these.
It can protect the shareholder’s or member’s assets. The share of the Private Limited Company is not made available to the general public. The maximum number of shareholders for this business structure is 50 shareholders.
What Are The Suffixes For All Business Entities In Singapore?
A company name must have a suffix, be accessible, and adhere to the state regulations in Singapore. An organization’s suffix is the final component of its name. This suffix identifies the company’s legal form as a business entity.
The most prevalent and preferred business suffix in Singapore is Private Limited. This company suffix is used by more than 95% of locally incorporated corporations in the nation. Its many combinations consist of the following:
- Private Ltd.
- Pte. Limited
- Pte. Ltd.
- (Private Limited)
- (Private Ltd.)
- (Private) Limited
- (Private) Ltd.
- (Pte. Limited)
- (Pte. Ltd.)
- (Pte.) Limited
- (Pte.) Ltd.
The suffix Limited is utilized to signify that it is a Public Limited Company and a huge company.
- Ltd.
- (Ltd.)
- (Limited)
How To Pay For The Business Registration Fees In Singapore?
Registering your company in Singapore can be done through the BizFile+ portal the ACRA provides. As you apply for company registration, you can pay the fees for business name reservation for SGD 15 and company incorporation for SGD 300 directly via the BizFile+ during the application.
What Does Ltd Means In Singapore?
Ltd means Limited. A suffix indicates a Public Limited Company with more than 50 shareholders or members. Usually, Limited or Ltd is used after the name of a Public Limited Company.
What Is A Public Company In Singapore?
A public company is an extension of a Limited Liability Company (LLC). It can be in two forms which are:
- Public Company Limited by Shares: The company’s shares may be made available to the general public by listing them on the stock exchange to obtain money from the general public. The company must submit a prospectus to the Monetary Authority of Singapore (MAS) before raising its capital by offering public shares, debentures, and bonds. This company structure also allows for more flexibility for the shareholders in buying and selling shares in the capital market. However, the compliances and cost to maintain the company are significantly higher than that of a Private Limited Company. The company can be distinguished by the suffix ‘Limited’ or ‘Ltd’ after the company’s name.
- Public Company Limited by Guarantee: This entity does not have any shares. A Public Company Limited by Guarantee is a business formed for charitable and non-profit objectives. This category includes societies and organizations registered for charitable purposes or to promote the arts. The member’s liability is limited to the amount each member agrees to contribute to the company’s assets. The Memorandum of Association will specify the size of the members’ guarantee. Additionally, the company does not use the words ‘Limited’ or ‘Ltd’ in their names.
RELATED BLOGS
IRAS created and developed the Singapore GST Assisted Self-help Kit (GST ASK) to help businesses review the accuracy of their GST submissions and quickly find and fix previous GST problems. In order to avoid the fines that are frequently imposed for any inaccurate GST reporting, it also enables the business to discover the problems and [...]
A foreign business organization can transfer its registration from its current jurisdiction to Singapore through a process known as "Singapore re-domiciliation." Re-domiciliation has the major benefit of preserving corporate history and branding after the entity changes into a Singapore entity. Re-domiciling in Singapore does not also establish a new legal company. It does not affect [...]
The Singapore Employment Act is a crucial piece of legislation that governs the employment relationship between employers and employees in Singapore. It sets out the basic terms and conditions of employment, such as minimum salary requirements, working hours and overtime payment, notice periods for termination, and leave entitlements. The Act aims to protect employees' rights [...]