Company Registration in Singapore
Starting a business is both exciting and challenging. There’s a long list of things to consider, including product development, marketing, and funding. One aspect that can be overlooked but is crucial to the success of any business is its legal structure. This is where company registration comes to play, especially when you’re planning to set up your business in Singapore. Company registration in Singapore can be a complex process, but with the right knowledge and guidance, it can be smooth sailing. In this blog post, we’ll take a closer look at the process of company registration in Singapore and why it’s essential for any entrepreneur looking to venture into the Lion City’s business landscape.
1. Singapore Company Registration Requirements
To register a company in Singapore, you must familiarize yourself with the registration requirements. Singapore has straightforward and simple registration requirements that you need to fulfill. The first requirement is to have at least one shareholder, who can be an individual or a company. You can have more than one shareholder, and 100% foreign shareholding is allowed. You also need to have at least one director who resides in Singapore, but both Singapore-resident and foreign-resident persons can be directors of a company. The company must appoint a company secretary who resides in Singapore. The company must also have a registered address in Singapore, and all statutory documents of the company must be kept at this address. The next step is to decide your company’s corporate structure and collect supporting documents. You will need to choose your shareholders, directors, and share capital.
Overall, Singapore’s company registration requirements are simple and straightforward. You just need to ensure that you meet all the requirements and collect all the supporting documents. With these in place, you’ll be ready to incorporate your company in Singapore.
If you’re planning to register a company in Singapore, it’s important to understand the requirements for shareholders and directors. Singapore allows 100% foreign shareholding, meaning all shareholders can be foreigners. You’ll need at least one shareholder and can have up to 50. Shareholders can be individuals or companies. The process of registering a company in Singapore requires appointing at least one director who resides in Singapore. The director can be a Singapore-resident or a foreign-resident person, but at least one Singapore-resident director is required. Corporate directors are not permitted. If you don’t have a Singapore-resident person, services are available to fulfill this requirement.
3. The Role of a Company Secretary in Singapore
If you’re planning to register a company in Singapore, it’s important to note that you’ll need to appoint a company secretary within six months of incorporation. The company secretary plays a crucial role in ensuring the compliance of your company with relevant laws and regulations. They’re required to maintain the statutory registers of the company, file annual returns with the Accounting and Corporate Regulatory Authority, and ensure that the company adheres to the Companies Act and other regulations. In addition to these responsibilities, a company secretary acts as a point of contact between the company and its shareholders, protecting their interests and ensuring clear communication. Having a qualified and experienced company secretary can help your company avoid costly penalties, maintain accurate records and make informed decisions.
4. Corporate Structure and Supporting Documents
When registering a company in Singapore, it’s important to consider the corporate structure that will work best for your business. Some key questions to ask yourself include who will be the shareholders and directors, what percentage of shares will each shareholder own, and what will be the initial share capital of the company. Most companies are initially incorporated with a small capital, such as SGD 100. It’s also important to collect and provide supporting documents that verify the identification and background information of proposed shareholders and directors, such as a Singapore ID, residential address proof, professional background description, and board resolution from the parent company authorizing registration of a subsidiary company in Singapore.
Additionally, it’s important to consider the liability structure of the business and choose an organizational form that provides maximum freedom while maintaining a legally independent entity. For instance, a private limited company in Singapore offers limited accountability for owners and directors, whereas a limited liability partnership combines the benefits of a private limited company and a partnership. Other options include setting up a subsidiary company owned by an external business entity, forming a branch office of a foreign corporate entity, or establishing a representative office in Singapore. Each option has its own benefits and requirements, and it’s important to consult with an expert to choose the right one for your business needs.
5. Private Limited Company Formation in Singapore
When it comes to company registration in Singapore, many entrepreneurs choose to form a Private Limited Company. This type of company is locally incorporated and has a maximum limit of 50 shareholders. The company’s memorandum or articles of association restrict the right of its members to transfer their shares in the company. As an independent legal entity, the company can sue and be sued in its own name, and the company’s directors and shareholders have limited liability to the company’s debts. With at least one and a maximum of 50 shareholders, a Private Limited Company in Singapore is considered a tax resident and eligible for local tax exemptions and incentives.
One advantage of setting up a Private Limited company in Singapore is that by doing so, entrepreneurs convey a professional commitment that increases the company’s chances of obtaining commercial loans from banks or financial institutions. Additionally, a Private Limited Company is a vehicle that enjoys special tax exemptions and incentives. The first SG$100,000 of taxable income is exempt from taxes, and effective tax rates can be as low as 5.6% on taxable income of up to SG$300,000. At least one director who resides in Singapore is required for the company, but Singapore-resident and foreign-resident persons can be directors as long as there is at least one Singapore-resident director. Furthermore, it is mandatory for a Singapore company to have a Company Secretary who resides in Singapore and is responsible for ensuring the company complies with its regulatory obligations and filings.
To register a Private Limited Company in Singapore, entrepreneurs must first meet the requirements. These include having at least one shareholder, one director who resides in Singapore, and a Company Secretary who resides in Singapore. The company must have a registered address in Singapore, and all statutory documents of the company must be kept at this address. Entrepreneurs need to decide on the corporate structure and collect all supporting documents to satisfy the registration requirements. The initial share capital of a company is generally small, such as SG$100, and identification and background information about the proposed shareholders and directors of the company must be collected and verified by the firm that is incorporating the company.
6. Limited Liability Partnership Registration in Singapore
Are you planning to start a business in Singapore and considering a Limited Liability Partnership (LLP)? An LLP provides a unique blend of the features of conventional partnership and limited liability company. As a separate legal entity, the LLP has the power to own property and sue or be sued. Its partners, on the other hand, have limited personal liability, and their debts are not liable to the partnership. The process of registering an LLP in Singapore is easy and can be accomplished entirely online via the BizFile+ platform. If you prefer, you can engage a registered filing agent to do it on your behalf. The application process usually takes 15 minutes after the application fee has been paid.
Be informed that the application processing time could take up to 60 days if approval from other government agencies, such as the Ministry of Education, is required. Once successfully registered, an LLP may commence business activities provided that no licenses/approvals from other agencies are necessary.
Upon registration, you will receive a system-generated Unique Entity Number (UEN), which you will use when transacting with government agencies. You have the option of choosing your UEN from a list of reserved UENs through ACRA’s Special UEN (SUN) service for an additional fee. All newly registered LLPs receive a free Business Profile, an electronic report containing the registration information of that entity. You can also register an alternate address at a fee if you do not want to use your residential address for personal data protection purposes.
If you are considering a Limited Liability Partnership in Singapore, make sure to research and weigh the pros and cons before proceeding with registration. It is crucial to choose an optimal business structure based on your business goals, needs, and preferences.
7. Setting up a Subsidiary Company in Singapore
If you’re a foreign company looking to set up your business in Singapore, one of the recommended options is to establish a subsidiary company. This type of business registration is suitable for small to medium-sized enterprises and offers many benefits. For instance, Singapore’s business legislation is favorable for foreign investors, and they are allowed to have 100% foreign ownership of companies they set up. Additionally, taxes are low, and there are no restrictions on repatriation of earnings and capital, making it a liberal regime that attracts many foreign companies every year.
A Singapore subsidiary is a private limited company incorporated in Singapore, and the majority shareholder is a corporate entity. The parent company can own 100% of the shareholding of the Singapore subsidiary, making it a separate legal entity from the parent company. A Singapore subsidiary is typically regarded as a local resident company and thus qualifies for tax incentives available to local companies.
When setting up a subsidiary company in Singapore, it’s important to note some requirements. For example, a Singapore subsidiary must appoint at least one director who is ordinarily resident in Singapore. The company must also have a registered office in Singapore where statutory records will be kept. Additionally, an auditor must be appointed within three months from the registration date of the Singapore subsidiary company.
Overall, setting up a subsidiary in Singapore is a strategic move for foreign companies who want to expand their business and enjoy the benefits of the liberal regime. With its favorable business legislation, low taxes, and opportunities for growth, Singapore offers a promising environment for companies seeking to establish their presence in Asia’s business hub.
8. Branch Office Formation in Singapore
Are you a foreign company looking to expand your business to Asia-Pacific? Consider setting up a branch office in Singapore. This will allow you to carry out business activities and generate profits within Singapore, while leveraging your existing brand reputation. Keep in mind that a branch office is considered an extension of the foreign company, meaning it does not have a separate legal entity and lacks limited liability. As such, the foreign parent company is implicitly liable for all debts and liabilities of the branch office.
To register a Singapore branch office, you must first select a name that corresponds to that of the foreign company. Additionally, you need to appoint at least one authorized representative who is a resident of Singapore. This representative may be a Singapore citizen, permanent resident, or a foreigner issued with an employment pass. You will also need to provide a certified copy of the foreign company’s certificate of incorporation, constitution, particulars of directors, and latest audited financial statements if required by the parent country. Finally, the branch office must have a registered office located in Singapore and mention its name and place of incorporation on all business correspondence.
To register your branch office, you must apply online through the Accounting and Corporate Regulatory Authority (ACRA) portal. The process involves submitting necessary documents and paying a name application fee of S$15 and a registration fee of S$300. As a foreign company, you may need to engage a registered filing agent in Singapore to assist with the registration. The agent may have additional requirements for you to fulfill. Overall, setting up a branch office in Singapore may be a useful way to establish your company’s operations in the region.
9. Business Representative Office in Singapore
If you are planning to explore business opportunities in Singapore, setting up a representative office can be a cost-effective and efficient way to conduct initial research. Unlike a subsidiary or branch office, a representative office has no legal status and cannot engage in profit-yielding activities. Its main purpose is to manage and coordinate non-commercial activities of a foreign company, such as conducting market research and feasibility studies. A representative office can engage in trade shows and exhibitions, build trade contacts, and handle product inquiries. It can only operate for a maximum of three years before the parent company must register as a subsidiary or a branch office.
When considering registration options in Singapore for foreign companies, you have three choices: subsidiary, branch, or representative office. A subsidiary is a private limited company owned and administered by other companies, either local or foreign. It offers greater flexibility and benefits, such as tax incentives, and is the most recommended option. A branch is an extension of the parent company and has no legal status or resident status. Its debts and liabilities are channeled to the parent company. A representative office is a low-cost option for conducting initial research, but it cannot engage in profit-yielding activities and is temporary.
Setting up a subsidiary in Singapore requires fulfilling certain criteria, such as appointing at least one local director, shareholder, and company secretary, and raising a paid-up share capital of at least S$1. You also need to engage a registered filing agent located in Singapore to facilitate the registration process. The subsidiary is a distinct legal entity with its own rights and obligations, and the liabilities of its shareholders are limited to the number of shares they hold. Unlike a representative office or a branch, the subsidiary can have a different name from the parent company with approval from ACRA.
10. Key Factors to Consider for Company Registration in Singapore
Before starting a business in Singapore, it is essential to consider several key factors. First and foremost, you need to choose the right business entity according to your business goals. Private limited companies are the most popular form of business entity in Singapore due to their limited liability and tax-efficient structure. Secondly, you need to appoint at least one resident director and a company secretary who must be a natural person with a valid Singaporean address. Having a registered address in Singapore is mandatory, but it can be either a residential or commercial address. Lastly, it is crucial to comply with the Singapore Companies Act and other regulatory requirements, such as obtaining business licenses and permits, if your business requires it.
Advantages of Company Registration in Singapore
Starting a company in Singapore comes with a plethora of benefits. One of the most significant benefits is its low tax rates. Singapore’s zero-tax environment for small businesses and absence of corporate income tax make it a favorable destination for investors. The country’s pro-entrepreneur ecosystem and the ability to facilitate business operations at a fast pace add to its benefits. The fast track incorporation process, which can be done online, makes it possible to start working in Singapore in no time. The country’s world-class telecommunication infrastructure is another advantage, making it an attractive location for companies looking to expand internationally. Singapore also offers many tax incentives for startups, including tax deductions and cash payouts on investments. Furthermore, the government’s zero tolerance policy towards corruption makes it a desirable business location. Singapore is also considered the world’s most open economy, fuelled by trade, manufacturing, and finance. Its established free-market economy, low unemployment rate, and low inflation further add to its advantages. The country’s tax structure is also considered one of the most competitive in the world, making it an ideal destination for forming holding companies. Singapore also has a widespread network of Avoidance of Agreements (DTAs) with 62 countries, ensuring economic transactions between nations are not affected by double taxation. The government provides a host of funding and subsidies for local and international startups, further attracting businesses to register their company in Singapore.
Disadvantages of Company Registration in Singapore
Company registration in Singapore offers numerous benefits for aspiring entrepreneurs. However, it is crucial to consider the potential disadvantages as well. One of the notable drawbacks of registering a company in Singapore is the strict compliance requirements imposed by the Accounting and Corporate Regulatory Authority (ACRA). These regulations often require extensive documentation and reporting, which can be time-consuming and costly. Additionally, businesses registered as private limited companies can face challenges in terms of fundraising opportunities, especially during the start-up phase. Banks and financial institutions are often more hesitant to extend funding to new businesses that do not meet certain criteria. Finally, while shareholder liability is limited in a private limited company, the costs associated with incorporating and maintaining the company can be significant, which may not be feasible for smaller businesses.
Frequently Asked Questions about Company Registration in Singapore
If you’re considering company registration in Singapore, here are some frequently asked questions you may have:
What are the requirements for a local registered address in Singapore?
A physical address in Singapore is required for company registration, either commercial or home office. HDB or URA approval must be obtained to use residential premises.
Is there a minimum investment requirement for registering a business in Singapore?
Only foreigners relocating to Singapore are required to invest a minimum of S$50,000 as paid-up capital. Local and foreign entrepreneurs don’t need to invest more than S$1 at the time of registration.
Who can act as a company secretary for a Singapore company?
A Singapore resident with a good understanding of the Singapore Companies Act can act as a company secretary. The sole-director of the company can’t act as the company secretary.
What are the different types of business structures in Singapore?
Sole proprietorship, partnership, limited partnership, limited liability partnership, and private limited companies are the available business structures in Singapore, all of which must register and abide by the Companies Act.
What are the key requirements for incorporating a company in Singapore?
At least one shareholder, one resident director, an initial paid-up share capital of at least S$1, a physical Singapore office address, and cannot be a PO box.
What are the different types of companies in Singapore depending on the number of shares and types of shareholders?
Exempt private company (EPC), Private Limited, and Public Company are the different types of companies in Singapore based on the number of shareholders and types of shares.
What documents are needed to incorporate a company in Singapore?
Proof of passport, residential address, and bank reference letter are required for every non-resident shareholder and director. Singapore ID and passport copy needed for resident shareholders and directors, and a copy of a parent company’s certificate of incorporation required for corporate entities.
How to select a Singapore company name?
Check the chosen company name’s availability with the Accounting and Corporate Regulatory Authority (ACRA) before registering for approval.