Company Formation in Singapore

Singapore has a lot of benefits that make it an ideal location for any entrepreneur.

Wondering if you can start a company in Singapore being a foreigner? Well, the answer is yes! Moving your business overseas is a very important step in any entrepreneur’s career. Due to this, there are many important decisions that you, as an entrepreneur would have to make.

And by registering your business in Singapore, you will be saving a lot on taxes and enjoy the multiple benefits that the country has to offer you with. Singapore offers Property rights, freedom from Government controls, and business freedom. And this is why Singapore is a great choice for you. But that is not all. There are a lot of things that make Singapore the ideal place to begin your next business venture. Here are the reasons!

Why Choose Singapore?

Singapore has a lot of benefits that make it an ideal location for any entrepreneur. And due to such advantages, the company formation in Singapore and running a business here is very easy not just for the locals, but for foreigners as well.

To begin with, the company formation in Singapore is highly simple and straightforward, thanks to the government who have made things very simple for entrepreneurs. Registering a business in Singapore is also free of red-tape and corruption. And they have many reasons for doing it of which you will learn about here.

Each year the nation witnesses a rush of entrepreneurs that come with their global talent and set up their business in Singapore due to the professional business approach and business-friendly environment that it has. In addition to this, Singapore is one of the world’s major financial centers and the world’s least corrupt countries. Moreover, Singapore is a prime area and viable destination for global businesses and investment due to currency exchanges and financial transactions.

Singapore also offers strong intellectual property laws that would protect your innovations and ideas. Opening a business in Singapore means that you will also benefit from the multiple Investment Guarantee Agreements and free trade agreements.

In short, it is a country filled with diverse culture and business opportunities for both locals and foreigners alike. So, if you are planning to start a business in Singapore, you will need to understand all about Singapore business laws and methods. Let us begin with the types of business entities you can choose from.

Types of Business Entities in Singapore

As soon as you have decided on getting your company incorporated in Singapore, the next thing that you need to do is choose the right business entity that you want to incorporate your company as. It is, in fact, a very important decision that you need to take to start your business. This decision can easily affect the perception of your business, the image, taxes, the ability to borrow money, the personal liability you face, the possibility to expand your business, and the amount of paperwork your business is required to do.

To give you an idea of all the available business entities that you can choose from in Singapore, here is a brief of all the main business entities:

#1 Private Limited Company

This is an LLC where the company can only have less than 50 shareholders in it and is the most popular option amongst the privately incorporated companies. The name of the company ends with (Private Limited) Pte Ltd. The shareholders in this entity can be both individuals or corporate entities. This is one of the most advanced, scalable and flexible kinds of business forms in Singapore. Some of its additional advantages include:

It has many tax benefits and incentives. In fact, it is a single-tier tax policy where the company is taxed at the corporate level at a low tax rate.
This business entity enjoys the ease of transfer of ownership.
It offers a credible image.
You can easily raise capital with such a business entity.
It offers perpetual succession, where the company would continue to exist even after the resignation or death of the shareholders and directors.
It offers limited liability protection and is a separate legal entity from the founders, directors, and shareholders.

#2 Public Limited Company

The next kind of business entity you can choose for the company formation in Singapore is the Public Limited Company. In this company, since it is public, the company has the right to offer its shares to the public. Additionally, it should have at least 50 shareholders who are obligated to follow some strict restrictions and rules as they will have the power to raise capital from the public. These companies are usually put in the stock exchange market.

#3 Public Company Limited by Guarantee

This kind of company is basically for non-profit purposes. Basically, a non-profit company is the one that carries out the non-profit making activities which have some basis of public or national interest such as charity, promoting art and so on. In fact, this company also has many advantages including the separate legal status, limited liability for the members, and no share capital.

#4 Sole Proprietorship

The simplest, but the riskiest kind of business type is the sole proprietorship in Singapore. In this business kind, the owner and the business are the same unlike in the private limited company. Additionally, there is no protection of your personal liabilities and assets. This means that in case your business is sued, your personal assets would be at risk.

#5 Partnership

The partnership form of business is like a sole proprietorship, just that more than one person can get together to own the business. The rest of the things are the same as the sole proprietorship where the owners and the partnership are the same. So, the company would cease to exist when the owners retire, die or leave the company.

There are three kinds of partnerships in Singapore:

General Partnership: In this, there is a minimum of 2 people and a maximum of 20 where the owners have to pay the taxes through their personal income tax based on their share in the profits from the company. But just like a sole proprietorship, the owners are personally liable for the debts and liabilities of the business. Additionally, each partner is responsible for the other partner’s actions.
Limited Partnership: Unlike the general partnership, this kind of business form offers limited protection to the owners. The liabilities of limited partners are limited to their investment in the partnership (capital or property). Along with this, the partners are usually not able to participate in the management of the business.
Limited Liability Partnership: Out of all those mentioned above, this is the best kind of partnership. LLP is the most advanced kind of business incorporation structure. It is a combination of the features of the partnership and the Private Limited company. This means that the owners can easily enjoy unlimited liability protection. Just that this business needs to have at least two professional partners. Additionally, the owners need to get into a detailed agreement base don how the management responsibilities would be and how the profits would be shared.

#6 Foreign Company Registration Options

If you already have a company outside, you can easily set up a presence in Singapore as well. You will have the choice of setting up a subsidiary, a branch office, or a representative office in Singapore.

Representative Office: This kind of company is a temporary arrangement for conducting marketing research activities.
Branch Office: This is an extension of its parent company and is not as a separately incorporated entity.
Subsidiary Company: This is a private limited company incorporated in Singapore with the parent company as its shareholder.

From the above explanation, you now know all the entity kinds available. Choose the one that would suit your business goal and ideas in the most appropriate way. Once you select the type of entity you want, you then need to register your business with the government.

Business Registration in Singapore

As mentioned above, creating a private limited company is the most common way of registering a business in Singapore. But regardless of the kind of company you want to incorporate, you will need to be above the age of 18 for it. But before you can register your business, you need to be ready with the following:

Company Name: You will need to get the approval of the company name (this means that the name should be available and not used by any other business there) before you can register a company with it.
Directors: At least one director needs to be a resident of Singapore. It can be a person who is a citizen, who has a valid employment pass or dependent pass or even a permanent resident. The director does not necessarily have to be a shareholder of the company.
Shareholders: You will need to mention the number of shareholders in the company. And you need to have at least one shareholder in the company.
Company Secretary: As per the Singapore Companies Act, Section 171, you need to appoint a qualified company secretary within six months of incorporation. The person has to be a natural person living in Singapore and cannot be a shareholder or director of the company.
Paid-up Capital: You need to have at least S$1 in paid-up capital for registering a business in Singapore. Obviously, you can increase the amount at any time. Just to mention, Singapore companies do not use the authorized capital. It can be either be ordinary shares, preference shares or other shares.
Registered Address: You will need a physical address in Singapore for registering your company here. And you cannot use a PO Box as your address.

In short, you will have to give the following information for registering a business in Singapore:

Memorandum and Articles of Association (MAA) – You can get this from the Singapore Company Registrar.
Company Secretary Particulars
Registered Address
Directors’ Particulars
Shareholders’ Particulars
Brief Description of Business Activities
Company Name

Requirements of Singapore Private Limited Company

All mentioned above was for any kind of business entity that you choose. But since the private limited business form is the most common one, here are the details you will need for registering your business in Singapore as a Private Limited Company:

Company name: You will need to choose a proper company name along with a web domain address with the same name.
Description of Business Activities: You will need to use the Singapore Standard Industrial Classification Code (SSIC) 2010 to select the business activities your company will be engaging in for your company formation in Singapore.
Shareholding Pattern: As soon as a Singapore private limited company is formed, you will need to issue shares to its initial members. This would increase the capitalization by the issuance of further shares. The issued share capital of the company is the total number of shares existing in the company multiplied by the nominal value of each share. A Singapore company can be registered with a minimum paid-up capital of S$1 (or its equivalent in any currency). Furthermore, the paid-up capital is the portion of share that the company has issued and received payment in full.
Shareholders agreement: You will have to prepare the shareholder agreement to avoid any disputes in the future. This agreement specifies the relationship between the shareholders along with their rights and obligations.
Details of shareholders: Ensure that you have all the ID proofs and details saved for all the shareholders in the company, regardless of if the shareholder is a local or foreign person. Also, remember that there can only be a maximum of 50 shareholders in a private limited company.
Details of directors: Just like the shareholders, you will also need to keep all the details of the directors with you. And at least one director has to be a Singaporean citizen.
Registered address: As mentioned for every other business form, you will need a properly registered address for the company formation in Singapore.
Particulars of the Company Secretary: You need to have a company secretary who lives in Singapore. This person/company needs to take care of all the regulatory compliances of the company.
Memorandum and Articles of Association (MAA): The memorandum specifies the activities that the company might have to engage in. And the Articles of Association gives the rules that would govern the internal management of the company. You can get the standard MAA from the Singapore Company Registrar.
Appoint an auditor: You will also need an auditor within 3 months of the company incorporation unless your company doesn’t have any audit requirements. For your company to be exempted, the total number of shareholders in the company should be less than 20 and its annual turnover has to be less than S$5 million.

Registration Procedure and Timeline – Registering a business in Singapore

Thanks to the computerized registration in Singapore, Startupr can help you with getting your company name reserved and registering your business in Singapore. Here are the steps you will have to go through for the company formation in Singapore:

Step #1 – Reserve the Company Name

Before you register a company, you need to ensure that the company name is available for use with the Singapore Government. For this, you need to check the availability with the Company Registrar. Remember that you cannot pick up a name with words like finance, bank, media, and law.

If you choose a name that has a legal word in it or a name that is already in use, the process company formation in Singapore would take more time than normal. To make the process move faster, choose a name that:

Is not rude, obscene or dirty;
Is not already reserved;
Does not infringe with any trademarks;
Is different from any existing local companies; and
Does not use any legal words like bank, finance and so on.

Once you have decided on the name and checked for its availability, you can then move to the next step.

Step #2 – Registering a business in Singapore

As soon as the Company Registrar approves your company name, they will process your incorporation application and the provided documents within a few hours. In case your application is taking time, it is because the government is performing some additional interrogations. Hence, you will have to make sure that all the forms have been filled and signed properly. And all the documents needed (as mentioned in the previous section) have been provided.

To help you go smoothly with this process, Startupr is here to help you.

Post Registration Formalities

As soon as you have your company incorporated, you will get two documents from the Company Registrar. These documents would include:

Certificate of Incorporation: You will get an email confirming that your company has been incorporated. In this, you will also get your Company Registration Number. Since Singapore does not use the paper certificates anymore, this is your official certificate of incorporation. So, do not lose it. Just to mention, you can get the paper certificate from the Company Registrar and it takes about 3 to 5 days to get the paper certificate.

Company Business Profile: The moment your company formation in Singapore is completed, the Company Registrar would create a company business profile for it. You can download this information in a PDF file as well. It would include the following details:

Company Secretary details
Directors’ details
Shareholders’ details
Registered address
Paid-up capital
Principal activities
Incorporation date
Previous names for the company, if any
Company name and registration number

And with this, you can then move ahead and start your business. Along with that, you can also proceed with all the additional legal and contractual tasks for your company to run smoothly in Singapore. This includes opening a bank account, getting the business license and following the annual filing requirements.

Opening a Corporate Bank Account

The first thing that you would need to take care of is opening your corporate bank account as it is very important for the process of company formation in Singapore. In fact, there are a lot of options that you can choose from in Singapore – 127 commercial banks in total out of which 5 are local banks and 122 are Foriegn Banks.

You will have to learn about the banks and what it offers to select the one that is most suitable for you and your business. And regardless of the bank you decide to move ahead with, here are some of the main documents that you might need for opening a corporate bank account in the bank:

Certificate of Good Standing (For Offshore Accounts Only)
Certificate of Incumbency (For Offshore Accounts Only)
Certified copies of Passport or of SingPass
Certified copy of the company’s Memorandum & Articles of Association
Resolution from the Board of Directors authorizing the Account Opening and Signatories of the account
A Certified copy of the company’s business profile from ACRA
Certified copy of Certificate of Incorporation
Residential address proof, of signatories, directors, and of the ultimate beneficiary owners
Completed and duly signed corporate bank account forms by a reputable bank

Note: A lot of banks would need you to be physically present there in the bank when opening a bank account there. So, you need to be prepared to visit the place here.

Applying for Business Licenses

The next step is to apply for the needed business licenses so that you can run your company smoothly after the company formation in Singapore. Basically, if you engage in certain businesses, you will have to get a special license for it. In short, you need licenses for the following activities.

employment agency
import/export of goods
financial services
travel agencies
educational institutes
restaurants

Take the help of a professional like Startupr to find out if you need any additional licenses.

Annual Filing Requirements

As per the Singapore Companies Act, after registering a business in Singapore, you will need to file certain reports to the relevant government bodies every year. These annual requirements are important and include:

Annual Financial Statements: You will need to prepare and share the financial statements of your company that comply with the Singapore Financial Reporting Standards (SFRS), which is based and similar to the International Financial Reporting Standards (IFRS) and issued by the International Accounting Standards Board (IASB).
Annual General Meeting (AGM): You will need to hold Annual General Meetings of the shareholders of the company where they need to take part and make certain decisions of the business. This is important only unless your company has selected to not hold the AGM by passing the shareholder’s resolution. In such a case, all the matters would be settled through the passing of written resolutions instead of AGMs.
Annual Return (AR) Filing with ACRA: The (Accounting and Corporate Regulatory Authority of Singapore) ACRA is a government body that enforces and oversees the company regulations in Singapore. Hence, it is important to file your company’s Annual Return with ACRA within 30 days of holding the AGM. The filing can be done via BizFile, which is ACRA’s online filing system.
Annual Tax Return Filing with IRAS: IRAS is the Inland Revenue Authority of Singapore and is responsible for collecting the taxes in Singapore. So, you will need to file your annual tax return with the IRAS. There are two filings under this:
- Corporate income tax return: This has to be filed by November 30 for paper filing or by December 15 for electronic filing by using the form C or C-S albeit at a later date. The companies that file the form C has to attach the detailed profit & loss statements, financial statements, tax computations, and other supporting documents.
- Estimated Chargeable Income (ECI): It has to be filed within 3 months of the company’s financial year-end. ECI is the estimate of the taxable income of the company for the latest financial year that ended. The companies that do not have to file for this include the companies with less than S$5 million and companies whose ECI is NIL.

How can Startupr help you?

Startupr is highly experienced and dedicated in setting up businesses for entrepreneurs like you. We have clients that come to use from all over the world and from various different industries, backgrounds and cultures. And at Startupr, we work towards offering effective, affordable, and efficient services that suit our client’s needs for company formation in Singapore needs.

In fact, Startupr has always strived to make things easier for our clients as they come to us for registering their business in Singapore. And we do not just help you with starting your business. We strive to help you with growing your business. Our qualities include:

Unwavering Focus on Client Satisfaction
Creative & Flexible Approach
100% Online
Transparent Pricing
Proven Honesty & Reliability

So, all you need to do now is to gather the information needed for your company formation in Singapore, choose your company name, select the directors and shareholders to begin the process. And so that your process is smoother, Startupr can help you with the incorporation process in Singapore. Contact us to learn more about what we offer today!

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