How to set up a company in Singapore?

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How to set up a company in Singapore?

How To Setup A Company In Singapore – A Full Guide To Company Incorporation In Singapore

Most people think it is extremely difficult to incorporate a company in Singapore most especially if you are a foreigner.

This is a very wrong notion that has been made popular by some agencies that have the intentions of milking you of every dollar they can.

In today’s article, we are going to go over all the steps involved in registering a company in Singapore, the pros and cons and every other thing that will help you run a successful business in Singapore.

Let’s dive in:

Reasons You Should Consider Singapore Company Incorporation

The following are among the major benefits for you starting a business in Singapore

  • Taxation

This is one of the major problems faced by people when starting a business most especially in a foreign country.

Fortunately, Singapore has one of the lowest tax rates on companies among the developed countries in the world.

More of this will be discussed later in the article

  • Business Environment

The country is rated as one of the least corrupt in the world

It has infrastructures that are well developed to meet the needs of your business no matter the industry and is even ranked among the top countries in the world because of its beautiful infrastructures.

Technology and communication are also very suitable to carry your company to the next level.

The workforce there is also highly educated and efficient.

  • Financial System

The financial market is very robust; it has very deep and liquid markets.

Has the largest corporate banking system in the whole of Asia with over 160 banks and counting.

Startup companies if meeting the set requirements, also have access to capitals and incentives to help you grow your business.

  • International Relationship

Being one of the few countries to have a relationship with both North Korea and the United States says a lot about their foreign relations.

They have over 70 DTAs (double tax agreements) with other countries, so you should be a little worried about paying tax twice. Although, verification is required.

They also have investment guarantee agreement and free trade agreements with over 20 countries.

Company Laws of Singapore

The Companies act 1967 was the major law governing companies registered in the country, but over the years revisions have been made to reflect Singapore as a center of business worldwide and also protect you as a partner or business owner

In Singapore, organizations essentially get represented under the Companies Act (Cap 50, 2006 Rev Ed) (the Companies Act or the Act).

Specifically, organizations may, notwithstanding the Companies Act, get directed by different statutes.

The Companies Act does not just set up the nature of activities that the organization may take part in however it likewise, characterizes the forces that get delegated from the organization to its directors.

Factors To Consider Before Company Incorporation In Singapore  

The following are some of the factors to consider when registering a company in Singapore:

  • Knowledge of industry
  • Capital
  • Growth and profit capabilities
  • Competition analysis
  • Target market
  • Government policies

Type Of Business Structures That Can Be Registered In Singapore

According to the Accounting and Corporate Regulatory Authority SG they are 4 types of business structure:

  • Sole-Proprietorship (one owner) or Partnership (two or more owners)
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)
  • Company

When choosing your company structure you need to put into considerations such as risk you are willing to take, capital available to invest and the advantages and disadvantages involved with various with the different business entities.

REQUIREMENTS TO REGISTER A COMPANY AS A RESIDENT

These are the requirements needed to register your company in Singapore as a resident:

  • The company name of your choice must be approved by the accounting and corporate regulatory authority (ACRA).
  • You will need to appoint a minimum of resident director. Although an unlimited number of resident and non-resident directors can be registered later if you decide.

Note: both resident and non-resident directors you decide on must be at least 18 years of age, not bankrupt and be free of any previous wrong-doings or misdeeds

  • You have shareholders in the range of 1-50, which can either be directors or not. Shareholders may include both local and non-local individuals or companies, and 100% shareholding by non-locals is allowed. After a Singapore company is incorporated, shares can be issued freely or transferred at any time.
  • A qualified secretary of your choice who is a resident needs to be appointed within 6 months of your company’s incorporation. It is not possible for shareholders or directors to act as the secretary of the company.
  • You need to have at least S$1 as share capital for your company to be registered in Singapore.
  • A local physical address which may either be residential or commercial is required to be registered as your company address. P.O boxes are not allowed.

Requirements For Registering A Singapore Company As A Non-Resident/Foreigner

These are the requirements needed to be met by non-residents to get a company registered in Singapore:

All the laws above need to be met, but below is more information you need to meet for consideration:

  • The services of a professional company must be engaged to register a Singaporean company, this is because the laws of Singapore, does not allow non-resident individuals or entities to self-register a company.
  • A Singapore work visa is not required if you want to incorporate a private limited company and you are running the business from overseas.

You can travel to Singapore on a visitor visa if you need to attend to issues related to your company on a short-term basis.

However, in such cases, you will need a local director who will fulfill the required minimum of at least one resident director.

  • If you plan on moving to Singapore to run your company, it is a requirement to obtain an Employment or Entrepreneur pass, with this you can then fulfill the role of local resident director for your company.
  • All Singapore company incorporation and work permit formalities can be handled without you needing to be physically present in Singapore.

You may need to visit if you have the intention to open a bank account at a Singapore-based bank.

 

Documents Required For Registration Of Your Singapore Company

  • Name of company as registered with ACRA
  • Brief description of activities carried out by your business/company
  • Shareholders’ particulars
  • Directors’ particulars
  • Company secretary particulars
  • Singapore registered address of the company
  • Constitution

If you are hiring the services of a professional service firm, you will be typically asked to provide these documents in order to prepare the necessary paperwork:

  • For non-residents: A passport copy, evidence of overseas residential address, as well as other Know-Your-Client (KYC) information such as bank reference letters, personal and business profiles, etc.
  • For Singapore residents: A copy of Singapore identity card is required
  • For corporate entity shareholder(s): Copy of registration documents, such as a Certificate of Incorporation, memorandum of association and Constitution

Please note that if you are using any non-English documents an officially endorsed-translated version must be provided.

The Procedure

Once you have met the desired requirements and have the required documents, incorporating a company is very simple and straight forward.

They are two distinct steps involved at this stage:

  • Company Name Reservation

Generally, new company names are usually approved or rejected within an hour.

An exception to this occurs if your proposed name has some words (such as bank, finance, law, media, etc.) that might require the review and approval of a corresponding external government authority.

In such cases, the name approval may get delayed by a few days or weeks.

To get the proposed name of your company approved on time, make sure the name:

  • is not identical or too similar to any  local company names that have been existing priory
  • does not infringe with any trademarks
  • is not obscene or vulgar
  • has not already been reserved for another company

A company name when approved will be reserved for 4 months from the date of application.

  • Registration of The company

Once your company name has been approved and has been duly signed, incorporation paperwork is in place.

Company incorporation can be finished within a couple of hours within the filing of the incorporation request.

You (if a Singapore natural) or the service provider of your choice can just make an online filing with the ARCA

But if you are not a citizen, permanent resident, or the holder of an Employment Pass visa only a professional firm can make an online filing with the ACRA.

There’s a modest filing fee, and you’ll have your company will be ready in about 1-3 business days.

Like many other jurisdictions, offering services related to registering companies are regulated.

Only providers who are licensed (local lawyers, accountants, or a specially licensed corporate service provider) can incorporate companies, provided you have all the necessary documents and meet the standards to run your business in Singapore.

In some cases, the authorities may ask for additional information from shareholders or directors of certain nationalities.

In such cases, you may have to wait up to 2 months to get incorporated

Formalities After Company Incorporation

How To Know If Your Company Has Been Incorporated

After your Singapore company has been incorporated, ACRA will send an official email notification to confirm it.

The mail from the ACRA contains your company registration number and is treated as the official certificate of incorporation in Singapore.

A hard copy of the certification of incorporation has stopped being issued on default.

However, if you require one, an online request to ACRA can be made after incorporation for S$50 per copy.

The hard copy for certificates of incorporation can be collected the from the ACRA office the next day.

Besides the certificate of incorporation, you will also be able to obtain a PDF version of your company business profile if you make an online request and pay the nominal application fee.

The company business profile is usually available for download within an hour of the request and contains details such as incorporation date, company name, name of shareholders and all other legal parts of the company

The certificate of incorporation and company business profile is sufficient in Singapore for all legal and contractual purposes, such as the opening of corporate bank accounts, signing of office leases, etc.

Some other items you will almost certainly need upon registration of your Singaporean company include:

  • Share certificates for each of the shareholders and also a share register indicating shares allotted to each of the shareholders
  • Company seal for the company
  • A rubber stamp for the company

 

What To Do After Registering Your Singaporean Company

  • Corporate Account:

After registering your Singaporean company successfully, you can then open a corporate bank account in any bank present in Singapore such as Citibank, DBS, OCBC, UOB, etc.

Many Singaporean banks require the physical presence of the principals of the company as part of the procedure when opening a corporate account.

If for any reason, you wouldn’t be able to visit Singapore, you should choose a bank that does not have this requirement.

  • Business License:

Depending on the nature of your service, after registering your business entity with ACRA, you may also need to obtain one or more business licenses before you can commence your business operations.

Businesses such as educational institutes, restaurants, financial services, import/export-related industries, etc are required to obtain permits from the related government agencies.

  • Taxation

You may be required to pay taxes such as income tax, corporate tax and goods and service tax

You need to register for the Goods and Services Tax (GST)If the projected annual revenue of your company exceeds SGD 1 million,

GST-registered companies should charge this tax (currently 7%) to their clients on the goods and services provided, and remit this amount to the tax authorities.

Finally, the Companies Act of Singapore mandates certain annual filing requirements and formalities to be met for incorporated Singapore companies.

Final Words:

Singapore is one of the best countries to start and grow your business. The environment, the stabilized and business friendly government policies provides everything you need to run a great company.

We would like to hear your thoughts and if you have any question, feel free to ask we will answer to the best of our knowledge.

Cheers!

 

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