Singapore is arguably one of the easiest places to do business in. The country has taken pains to ensure a smooth operational ecosystem free of bureaucratic paperwork for all types of industries. In fact, the World Bank ranks Singapore as number 2 among 190 economies in the ease of doing business.
However, you still have to fulfil some legal requirements for setting up a company in Singapore. The Accounting & Corporate Regulatory Authority (ACRA), the regulatory body that oversees the workings of all Singaporean businesses, has detailed guidelines regarding the functioning of companies in the country and, as per ACRA’s rules, the first step to starting a business (as a private limited company) in Singapore is registering your company. Here are the details of how you should go about doing so –
Requirements of Company Formation
Before you start the registration procedure, it is best to understand the mandatory requirements of the process. These are –
- Getting the name of the company approved by ACRA
- Appointing at least one resident Singaporean director. You can, of course, have more directors, but ALL of them must be at least 18 years old, financially, and legally sound.
- You will also need shareholders (at least 1 or maximum of 50). They can be Singaporean residents or non-residents and there is no minimum requirement of local Singaporean shareholders.
- Your company must have a minimum initial paid-up capital of S$1
- You need to appoint a resident (i.e., a citizen, permanent resident, or work visa holder) Company secretary within six months of company incorporation in Singapore.
- You also need a local registered company office address.
How to Register a Business in Singapore in 3 Steps
Like we mentioned earlier, Singapore has made it extremely simple for businesses to operate in the country. The red-tape is reduced to the minimum, and the entire process is streamlined, transparent, and available online. Here are the 3 main steps of the registration process –
Step 1 – Company name approval
Before you start the company incorporation process in Singapore, you must get your organization’s name approved by ACRA (The Accounting & Corporate Regulatory Authority). The process is straightforward and is done to ensure that
- The name is not similar to the name of an existing business entity in Singapore
- Is not reserved by another company
- Doesn’t infringe any trademarks
- And is not obscene or vulgar
The approval process is swift – takes around an hour – if your proposed company name follows the above guidelines. If you use generic industry terms such as Legal, Finance, School, Media, etc. then your name will be reviewed by another government institution, which will delay your name approval by days or sometimes even weeks.
The fee for name approval is S$15.
Step 2 – Prepare and submit the required documents
Once the name approval comes through, you have to get together all the documents ACRA requires (mentioned in detail below) and submit a duly signed set to ACRA.
Step 3 – Apply to ACRA
With the correct documents and an ACRA approved company name, the application takes less than an hour. The whole process is online, and you will need to do it on BizFile+ – the business filling portal of ACRA.
The company registration fee is S$300.
Documents Required To Register A Company In Singapore
ACRA has a very clear list of the documents for company incorporation in Singapore. You will need to put together the following documents in English or with translations of non-English documents –
- Your company’s constitution (also known as Articles of Association).
- A brief description of your business activities
- Identification and address of each director along with his/her signed consent to act as a director for the company.
- Particulars of the company secretary along with a signed consent
- Identification and residential address details from each shareholder
- If you have hired a professional agency to do the filing on your behalf, then you will also need to submit your verified identification and address proof documents. For Singaporeans, a copy of their identity card would suffice. However, non-residents must provide a copy of their passports, proof of overseas residential address, and Know-Your-Client (KYC) information such as bank reference letters, personal and business profiles, etc.
Selecting a Business Structure for Maximizing Tax Benefits
Before you open and incorporate a business in Singapore, you must decide on the type of company structure that is most suitable for your work.
There are 3 types of companies which can be incorporated in Singapore –
- Private Limited Company (Pte.Ltd.)
- Sole Proprietorship
- Limited Liability Partnership (LLP)
Here’s a quick look at the pros and cons of each business structure –
|Pte. Ltd.||Sole Proprietorship||LLP|
|Taxation||Has many corporate tax benefits||Based on personal income tax rates hence cannot access corporate tax benefits.||No corporate tax benefits|
|Compliance||Strict compliance requirements and a fixed code of conduct||Minimal compliance requirements||Not too stringent compliance needs|
|Registration process||Easy process but incorporation and administrative costs of running a Pte. Ltd. Company are high||Registration is straightforward but must be renewed annually. It is also quite affordable.||Easy process, but requires at least 2 partners at all times.|
|Transfer of ownership||Simple||No separate legal entity from its owner hence can be transferred.||Ownership transfers and investment are not easy|
|Legal entity||Separate||No separate legal entity||Separate|
The table above makes it clear that the strict compliance requirements of a Pte. Ltd. company are offset by corporate tax benefits that could prove financially useful in the long term – especially as the business expands.
To recap, setting up Pte. Ltd. company in Singapore will put your business in a corporate tax bracket (0%-17%) as compared to the personal income tax slab (0%-22%) that sole proprietors and LLP owners fall under. When properly leveraged, the corporate tax benefits can make the company extremely tax efficient.
Some Faqs And More Details On How To Set Up A Company In Singapore
First, let us give you all the official information put out by ACRA. Much of this has been covered above, but in case you want to refer to the official website, then here are all the essential links.
|Setting Up A Local Company||Important Links|
|Company Name||Choosing a Name – https://www.acra.gov.sg/how-to-guides/setting-up-a-local-company/choosing-a-company-name
Reserving a Business Name – https://www.acra.gov.sg/how-to-guides/before-you-start/reserving-a-business-name
|Company Type||Private Vs. Public|
|Appointing Directors, Company Secretary, and key officers||Appointing Officers in Your Company –|
|Share and Shareholders||Shareholders –|
|Registered Office Address & Constitution||Registered address –|
|Fixing the financial year end||https://www.acra.gov.sg/how-to-guides/setting-up-a-local-company/deciding-on-a-financial-year-end|
|Applying for registration via BizFile+||How to register –|
|Your annual filing compliance||What you have to file every year –|
Q. How long does it take to register a company in Singapore?
Singapore has made it incredibly fast and easy for businesses to set up shop. In theory, the registration process can all be wrapped up in one day if you have all the documents ready and if your company name approval is not referred to another department.
Q. What does the entire company incorporation in Singapore cost?
The ACRA fees are S$15 for company name approval and S$300 as registration fee. However, these are just basic costs. If you hire a professional filing agency, then they will charge you a service fee for facilitating your work. Along with this, if you are foreign national, you might have to pay for hiring a nominee director, company secretary, for a registered office address, and more.
Q. How can foreign nationals register a company in Singapore?
Singapore has made it easy for foreign nationals to start a business in Singapore. You can easily operate your company from outside the country and don’t even need a work visa to incorporate a Singaporean company. However, you do need –
- at least one local, resident director. Resident for this purpose is defined as a person who is a Singaporean citizen, is a permanent resident in the country, or has a Singaporean Employment pass.
- To use a professional filing agent or registered incorporation services to register the company in Singapore. Foreigners cannot self-register a company in Singapore.
If you do plan to move to Singapore, you can travel on a visitor visa to get the process started and, in the meantime, apply for an Employment Pass or Entrepreneur Pass, which will give you the status of a resident Singaporean.
Q2. How can you find out when your Singapore company has been incorporated?
As soon as our company has been incorporated in Singapore, you will receive an email notification from ACRA informing you of your status.
This email is considered the official incorporation certificate and can be used for all company-related legal transactions. It contains the date of incorporation as well as the Unique Entity Number (UEN) issued to the company.
However, you can obtain a hardcopy from the ACRA office by submitting an online request and paying S$50. The hardcopy certificates are usually made available within 24hours and must be collected from the ACRA office. Additional payment can get it sent by post as well.
Q3. What must I do after registering my Singapore company?
Company incorporation in Singapore has several benefits –
Firstly, you need to be a locally registered company to open a corporate bank account. Without an incorporation certificate, it is impossible to access traditional business banking facilities in the country.
Secondly, many industries (such as restaurants, educational institutes, import/export-related industries, etc.) in Singapore require business licenses to operate legally. These can only be obtained if you are a registered company in Singapore.
Finally, as your business expands, you will have to apply for a GST registration. This is typically for companies that have annual revenues exceeding S$1 million. Again incorporating your company in Singapore is mandatory before registering for GST.
Along with benefits, registering a company in Singapore comes with some very specific compliance requirements as well. These are –
- Holding an AGM (Annual General Meeting) unless exempted
- Filing annual returns
- Submitting the Register of Registrable Controllers, Register of Members, Register of Directors, Secretaries, Auditors and CEOs
- Estimated Chargeable Income (ECI)
- Preparation of financial accounts as per Singapore’s Financial Reporting Standards (FRS)
- Annual audit of your financial accounts by an outside auditor
- Annual filing of accounts within 60 days of AGM (Annual General Meeting)
- Filing of income tax return
- Any changes in company information or information regarding company officers and shareholders must be updated with ACRA
- Determining the financial year