Company Registration in Singapore – FAQs
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Singapore is a very attractive destination for people globally who wish to set up their business or a company. Do you know that it has been ranked as one of the best country in the world for doing business by World Bank as for 10 consecutive years? Some of the factors for this are:
- The process of starting your own business is easy here
- Highly safe environment
- Robust legal system
- Its economy and policies promote and encourage new businesses
- Strategic position and network of trade agreements
- Very good air connectivity
- Thorough IP or Intellectual Property protection
- Strong financial sector and easy availability of funding
- Government gives incentives for setting up headquarters here
- Foreign income is exempt
- Personal Tax framework is very attractive
- Corporate Tax rates are very alluring
Pros:
- Easy to set up and is viable for low-risk service providers
- Don’t need to get their accounts audited or file annual returns with the Accounting and Corporate Regulatory Authority (ACRA)
- The profits that the company makes are taxed at personal income tax rates
- Easy to shut or wind up the business
Cons:
- The company’s owner is responsible completely for all business activities and has to bear all debts and losses and risks involved in the operations
- Have very limited options in getting funding from banks; at times might have to use their personal assets as collateral
- Are not allowed to sell some business stake to the investors for raising funds
No. To get an Entrepreneur Pass (EntrePass), you need to apply for it separately.
Your application is then reviewed on the existing criteria by three government agencies, namely, SPRING Singapore, the Infocomm Media Development Authority (IMDA) and the National Research Foundation (NRF).
A resident company of Singapore will be the one whose business’ control and management is exercised in Singapore. Whereas a non-resident company will be the ones which are not resident in Singapore and hence are not subject to its tax system; for example, branch offices of any Foreign Company.
But there are many benefits that only to a resident company gets and therefore a lot of companies opt to become resident companies.
Some of the benefits of becoming a resident company are:
- Benefits under Singapore’s huge network of Double Tax treaties
- Benefits under Singapore’s vast network of Investment Guarantee Agreements (if the company wants to invest abroad)
- Tax exemptions that a company gets on certain foreign-sourced incomes like dividends, service income and branch profits
- Tax exemption schemes for Singapore-based companies
Some mandatory requirements for forming or setting up a company in Singapore are as follows:
- Any Singapore national or foreigner can incorporate a company in Singapore
- There should be a minimum of 1 director and 1 shareholder in the company
- At least 1 director should be a Singapore resident, that is, a Singapore citizen, a permanent resident or an EP/DP holder
- Now, 100% foreign ownership is allowed
- Minimum paid-up capital of only $1
- A local registered official address is needed
- A local and professional company secretary should be appointed
When a business is a separate legal entity, which is distinct from the company’s shareholders and directors, it is known as a Limited or (LTD) company. One of the main features of a limited company is that it has the power to sue or be sued in its own name and can own properties in its own name. The members of the company are not liable for the company’s debts or losses.
The types of Limited Companies in Singapore are as follows:
- Private Limited Company
A company incorporated in Singapore, in which the maximum number of shareholders cannot be more than 50. According to the memorandum or articles of association (MAA) of a private limited company, its members cannot transfer their shares in the company.
- Public Company Limited by Shares
Any company incorporated in Singapore in which the number of shareholders could be over 50. This kind of companies may or may not be listed on a stock exchange. If they are listed, they are known as “listed companies”. The company is permitted to raise capital by offering shares and debentures to the public. It is mandatory for a public company to register a prospectus with Monetary Authority of Singapore (MAS) before planning a public offering of shares and debentures.
- Public Company Limited by Guarantee
A company incorporated in Singapore, which basically is involved into non-profit activities with either national or public interest like charity. When this company is being registered, a Minister can allow adding the word “Limited” or “Berhad” to the company name.
After you select a company name, it must be approved by the Accounting and Corporate Regulatory Authority (ACRA) first and then you can get it registered. Any name that is similar or phonetically identical to any registered company will be rejected by ACRA. There is a free Singapore Company Name Check tool, which you can use to check if your selected company name is not already registered by someone else.
Also note that using some words like “bank”, “education” or “insurance” can invite control and regulation by some Government authorities and in that case, you would need permission before you incorporate your company. Once the company name is approved, you have to wait for 60 days and then file an extension of an additional 60 days, if needed.
Some examples of businesses, which do not qualify for Entrepreneur Pass (EntrePass) include:
- Street hawkers, Coffee shops or cafes and food courts
- Bars, karaoke lounges and night clubs
- Foot reflexology and various massage parlours
- Acupuncture, traditional Chinese and other herbal medicines
- Employment and geomancy agencies
If a foreign national wants to relocate to Singapore and register a company in Singapore, he or she could opt for one of the two main work visas options – Entrepreneur Pass (EntrePass) or Employment Pass (EP).
But, if the foreign national does not wish to relocate to Singapore, then it’s better to engage a professional service provider like IMC and take our Nominee Director Service.
A Singapore company must:
- Have a local address that is registered;
- Have a qualified company secretary who is a Singapore resident;
- Have at least one resident director who is a Singapore national;
- Employ an auditor if annual turnover is over S$ 5 million or there is a corporate shareholder;
- Notify ACRA if there are any changes at all in the company’s registered address or other details;
- Annual General Meeting (AGM) should be held within 18 months of its incorporation. One AGM should be organized in every calendar year and there should be an interval between each AGM not exceeding 15 months; and
- Conform to annual Statutory filing requirements listed by Singapore company registrar (ACRA) and Singapore tax authorities (IRAS)
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