- An Overview of Shelf Company in Singapore
- How Can You Purchase a Shelf Company in Singapore?
- Are Shelf Companies in Singapore Illegal?
- The Difference Between a Shelf and Shell Company
- Reasons for Buying a Shelf Company in Singapore
- Benefits of Buying a Shelf Company in Singapore
- Disadvantages of Purchasing a Shelf Company in Singapore
- Conclusion
An Overview of Shelf Company in Singapore
A shelf company, also known as a ready-made company or shelf corporation, is a pre-registered company that has little nor no recent activities. It provides entrepreneurs with the opportunity to acquire an established company without going through the complexities of starting from scratch.
So, if you do not wish to create the company from scratch single-handedly, then it is completely legal to buy a shelf company for sale in Singapore. You may call it a ‘readymade’ company. The main benefit of using Shelf Company is that you can quickly and easily penetrate the market. It is possible because you can avoid the lengthy and rather complex process of company formation.
How Can You Purchase a Shelf Company in Singapore?
The acquisition of ready-made shelf companies in Singapore is a good idea among business persons who wish to start their business as soon as possible. It enables one to avoid undertaking the procedures to start a company as it can be carried out instantly.
Below, you will discover how you can find, acquire, and incorporate shelf companies easily in Singapore.
Step 1: Know the Pros and Cons of Buying a Shelf Company in Singapore
Step 2: Consult with a Professional
Step 3: Check Company Profile and Compliance
Step 4: Negotiate and Sign the Sale-Purchase Agreement
Ownership Structure: Foreigners can own 100% of shelf companies in Singapore, making them attractive for international entrepreneurs.
Step 5: Transferring Ownership
Step 6: Amend Constitution of the Company of Incorporation
Step 7: Register Current Updates of the Company
Step 8: Open Bank Account in Singapore
For the sake of convenient business running, all companies need to open a corporate bank account in Singapore. Therefore, open a corporate bank account when you already have the company and register it as yours.
If the company already has a bank account, you must update the authorized signatory and other related information, such as the company name, registered address, shareholder details, and directorship.
Are Shelf Companies in Singapore Illegal?
Absolutely, not. The shelf companies in Singapore are fully legal. This type of company is perfect for those who wish to skip the complicated and lengthy registration process. This is because shelf company registration is already done by its previous owner. You just have to check all the documentation and compliance in place.
Furthermore, if the current owner wishes to sell the company, it provides a favorable option for the existing owner.
The Difference Between a Shelf and Shell Company
Shelf Company: A dormant, legally registered entity that is intended for sale to someone who wants a company with a clean history and immediate business operability.
Shell Company: A non-operational entity often used to hold assets or facilitate transactions, but sometimes associated with fraud or tax evasion.
A shell company is a company that does not own or conduct any business at all. It only exists on paper, and that paper is intended only to be used for fraudulent or illicit activity. On the other hand, a Shelf company is a company that has gone through the registration process. It contains all legal means, and its directors are willing to commence the business processes.
Reasons for Buying a Shelf Company in Singapore
Double Taxation Avoidance Agreements
Intellectual Property (IP) Laws
Free Trade Agreements
Legal Compliance: Approximately 80% of shelf companies are compliant with ACRA regulations upon purchase, but thorough checks are still recommended.
Benefits of Buying a Shelf Company in Singapore
Shelf companies in Singapore offer multiple advantages to all business owners. Some of them are:
- Shelf companies are ready and formed already meaning that one will not have to go through the process of forming them.
- They have a pre-set structure and they are financed, reducing initial setup expenses.
- Some have established clientele bases and suppliers which can help in the preparations when entering the market.
- Shelf companies have more likelihood of getting business loans given that most lenders like to fund companies with at most 2-3 years of existence.
- Foreign shareholders are allowed to have 100% ownership.
- Another point is that every old shelf company for sale is considered to have higher credibility compared to newly developed businesses.
Disadvantages of Purchasing a Shelf Company in Singapore
Of course, there are some drawbacks to buying a shelf company in Singapore as well.
- The first one is that you are not in complete control of the company like the way you may have with a company starting from scratch.
- You may not know but if you buy aged shelf companies for sale in Singapore, it is more costly than the newly formed shelf companies.
