Singapore is the first choice for many foreign companies, including a company registration service branch. The lion city opens doors to global markets and is a haven for investors and businesses to grow. However, the hefty cost of setting up a company often discourages startups with precious capital. Therefore, thinking about this segment of fast-growing startup companies, requiring a technical company formation service to lower the cost of starting a business in Singapore, is essential for them to survive in today’s competitive world. To cater to this segment, a team of experienced market leaders who give a handful of startups low-cost business registration in Singapore. Through a detailed study of the various regulatory bodies, changes in taxes, and registration procedures, the business services provider has drafted a transparent package that allows quick registration of a private company in Singapore.
Singapore continues to be an attractive place for Indians to register their companies. It is especially attractive to start-ups run by young entrepreneurs and small enterprises with limited financial resources. The city-state is strategically located, has a pro-business environment, and offers technical talent that makes it the first choice for many Indian startups. In a report by CEIC Data, the number of Indian companies set up in Singapore has grown steadily. One of the main reasons for this is that registering a local company or a foreign branch in Singapore is easy and quick. No economy can grow without new startups bringing in fresh ideas, offering innovative services and products that create wealth and jobs. Therefore, there is no denying that any industry, big or small, needs a tailor-made environment for startups to thrive.
Benefits of Company Registration in Singapore
Further benefits of Singapore company incorporation that continue to attract investors include the following: The corporate tax rate for Singapore companies stands at a flat rate of 17%, and there are also no taxes on capital gains and dividends. Singapore has a network of about 76 comprehensive double-tax agreements and 8 limited treaties, also providing tax relief unless tax rules for local businesses are relaxed. Singapore incorporations also allow you to profit from tax allowances, grants, and exemptions, such as Productivity and Innovation Credit (PIC) incentives which provide a 60% cash payout or 400% tax deductions or allowances on up to S$400,000 per year in expenditure. Startup companies enjoy tax exemptions of 75 percent on the first S$100,000 of taxable income for the first three consecutive years of assessment. Newly-formed businesses operating in certain industries, particularly, are ineligible for 100% tax subsidies for the first three years of evaluation, depending on specific eligibility conditions.
Singapore is one of Asia’s top destinations for business establishment. The city-state’s entrepreneurship quality, innovation environment, technological readiness, supply chain linkage, macroeconomic stability, market sophistication, financial market development, and conducive infrastructure make Singapore a central hub for startups and established industry-leading companies. The World Economic Forum’s latest report on global competitiveness ranked Singapore as the top country in Asia. Oberlo places it as the second easiest place in the world to start a business. Particularly, Singapore is known to be the most tax-friendly country in Asia – in 2019. It provides an entrepreneurial-friendly environment that is best for everyone looking to break into the international market.
Importance of Budget-Friendly Options
Unaffordable services largely transform the original ‘ease of doing business’ mindset into a haphazard, helter-skelter process which is unsuitable for a soft landing for new businesses. It can come tied with a sense of intimidation, a feeling of unwelcome and moored to a fear that the business world is sealed off to a select few, with the majority being disallowed entry simply because they are deemed failures, in that they couldn’t afford the expensive professional advisors and international associated companies. However, to solely argue in favor of the cheapest choices available and to junk the usage of professional services in entirety would be a flawed analysis as well.
The value of going budget-friendly while you register a business in Singapore is a no-brainer. You save more money to be invested in your company as capital, thus ensuring maximum efficiency in resource allocation, especially during the early growth stages. More reliable budget-friendly choices for business registration also ensure the business market is open to a wider pool of potential entrepreneurs, rather than merely the ones who have abundant resources to partake in the expensive procedures. Furthermore, budget-friendly services are especially crucial when it comes to professional consultants like lawyers or corporate secretaries. Most early-stage entrepreneurs may not have ready-made advice that’s as effective as a professional’s, and those services, while important, are also accompanied with a high price because they usually come with many years’ worth of experience. Many new entrepreneurs may also need aid in administrative services, operational services and funding after company incorporation to ensure the smooth implementation of their business ideas.
Types of Affordable Company Registration
For a quick overview, here are the possible variations of an affordable single-company setup available today in Singapore. Before that, let me inform you that I assume that your digital business in Singapore will inevitably undergo an expansion in the near future. For this reason, registration of a business name (business name-only) may turn out to be unsatisfactory for a number of reasons both in the short and long term. The necessity to repeatedly comply with licensing conditions is a valid reason for the time being to exclude the option of registering a Singapore-based representative office or a Singapore subsidiary of your parent company incorporated in another country. Due to the fact that the representative office can be used neither for trading nor for billing the customers, it is a real waste of time to require this specific type of setup.
We have previously examined the possible costs of cheap company registration in Singapore. One commentary received from our readers asked a question relevant to this topic, and we will try to answer it to the best of our ability. They are a solo digital entrepreneur and would like to know if a limited liability company is the right choice for them, and if it would be possible to reduce the cost of setting up a company through some budget-friendly alternative to the services of a professional corporate service provider in Singapore.
Sole Proprietorship
The biggest advantage of running a sole proprietorship business is that the sole proprietor has absolute control over the business. He or she is the decision maker and has complete authority to decide the best way to operate the business. The sole proprietor is also able to initiate any action, be fast in decision making, and not have to wait for any approval from other members or a board. Additionally, sole proprietorship is the simplest and cheapest business form to set up. The costs of incorporating a company are vastly reduced, and the entire process can be completed without external or professional help. Trust and flexibility in the business operate well since only one person is involved in making decisions, and the owner can determine the company’s direction. With these benefits, one may be facing certain challenges. Thus, understanding the disadvantages of this option is also essential. The cash available is provided by the owner, as little or no capital can be advanced by investors/traders, and with just one person in charge of the entire business, the decision-making risk is also consistent.
Sole proprietorship refers to a business undertaken by an individual who has absolute control over the business and is personally responsible for all business debts. It is the simplest type of business structure and the owner can start business operations immediately. There are no specific registration procedures for sole proprietorships in Singapore. In general, one is required to register with the Accounting and Corporate Regulatory Authority (ACRA), which should include obtaining the required permits or licenses, and registration with the Central Provident Fund if one intends to hire staff for the business. The only substantial cost of operating a sole proprietorship business is the registration fee for the business with ACRA, which is S$115 per year. The cost of staff would depend on the minimum salary provided and would not be an added cost for the business owner provided he decides to do business alone. The only downside of using sole proprietorship, however, is that the business ends when the owner leaves or dies.
Partnership
The longevity of a partnership is limited by the relationship of the partners; the partnership ends when a partner dies, or when a partner is adjudicated insane, or when the company is dissolved, etc. Court can also dissolve a partnership even if the partner does not want this. Debts and liabilities by any partner in the course of normal business are obligations that are shared by all partners. Worse, each partner is responsible for debts incurred by the partnership—even if the debt was accrued by another partner for non-business reasons. Partners have the power to bind the partnership, but if that power is exceeded it could result in liabilities against the partners who exceeded their authority. In spite of these potentially negative facets of partnerships, it is clear why many do not mind creating a partnership for their business.
While it may sound counter-intuitive to involve others with your business when you are just starting, a partnership also offers many advantages. In terms of company registration, a partnership is tied with the sole proprietorship in being affordable and easy to set up. Separately and together, you and your partner have assets larger than you would each have alone; you can each contribute money and/or assets, thereby having a larger pool of resources to draw upon. You may also have different skills and expertise from each other which could be valuable for the business. Furthermore, each partner is liable for the actions of the other partners in relation to the business—understandably a risky proposition—but this is mitigated by choice of partner. Financially speaking, capital for a partnership is also generated by the contributions of the partners.
Private Limited Company
The company can also be after the shareholders, depending on the company constitution or partnership arrangement. However, a private company limited by shares will normally have the liability of its members limited to the amount of the shares. A non-profit organization might incorporate as a company limited by guarantee, which provides its members liability limited by the guarantee amount. If you want to start a company solely, take up the one and only director/shareholder position (or have a company nominee to act as the minority shareholders appointed by you), the simplest way may cost you only S$1. If you are a corporate entity, you cannot have a company nominee service. To resolve this, your company appoints a director who will take on responsibility for the entire administration of your company. Once the company is set up, the corporate director can resign, leaving you to be appointed as a director.
The most favored business structure in Singapore is the private limited company. This is the same business entity particularly popular in the UK and several other countries. To set up a company in its most basic form, you will need a minimum of one director, one shareholder, and an initial paid-up capital of S$1. The main characteristic of a “private limited” company is that the shareholders and officers of the company do not have personal liability for the company-operated debts and losses. The exception, however, is when you have personally guaranteed a loan. If you are starting a business with any level of risk, it is a good idea to have a limited liability structure in place.
Steps to Register a Company Affordably
Start by registering the new company name with Accounting and Corporate Regulatory Authority (ACRA). Drop by the Singapore Business Registry website, and use it to help you check if the new company’s name has been taken. In less than an hour of your afternoon, you can check the availability of your proposed company name. The website also offers the option of checking for the availability of internet domain names against your chosen company name. When your requirements for name checking are ready, head out to the 10 Anson Road office of Accounting and Corporate Regulatory Authority (ACRA) anytime from 8:30am to 5:30pm, or check their website for their mobile roving events. Show them your chosen company name, and if it’s available, you can proceed to reserve it. With a government fee of only SGD15, you can reserve the proposed company name for up to two months. Now you can begin to scare away potential competitors or have your letterhead professionally printed.
We get it. Starting a new business is not without its fair share of stress. How else would we overcome the challenges that stand between us and the satisfaction of a loftier set of goals? So it’s no surprise that despite the incredible ease of setting up a new business in Singapore, it’s easy to get taken in by the convenience of more expensive options or simply get bamboozled by misleading advice. Fear not, for there is no trade-off between affordability and speed in properly setting up your own new business, and I will show you how in three simple steps. Yes, three. No hidden costs either, I promise. For cheap company registration in Singapore, follow these three affordable steps.
Research and Planning
The next step in registering your business is to choose the structure that best fits your company’s needs. There are three main types of business entities in Singapore where you can conduct your business: Sole Proprietorship, Partnership, and Company. A sole proprietorship is the simplest and most flexible business entity. Its advantages are that it is simple to register, has low start-up costs, taxes only the individual and is easy to implement. However, it is also the most risky as the owner is personally liable for the obligations and debts of the business. With a partnership, two or more individuals can also provide their business knowledge and their financial and professional resources. Each partner is responsible for the debts of the partnership. In a private limited liability company (Pte. Ltd.), the shareholder’s liability is limited to what is invested in the company and the risk of personal loss is limited.
You have your business name, now it is time to choose the best possible business structure or legal form to register it under. In small-scale businesses, an individual can operate a business under his/her name or alternatively, under the name of a business entity registered in Singapore. Large-scale businesses are usually operated through corporate entities. You should take into consideration the requirements and costs involved in the registration of the given business structure. The following table provides an overview of the requirements and costs of the different business structures available in Singapore.
Choosing the Right Business Structure
When setting up a company, there are specific legislations that you will have to comply with, as well as with the regulation of Accounting and Corporate Regulatory Authority (ACRA). The Act applies to all companies unless specifically excluded. Information on incorporation and compliance requirements is available in the Corporate Act as well as the Accounting and Regulatory Authority Companies Act. United Nations (UNEP), Transparency International, the Consultative Group to Assist the Poor, and others have recently introduced Corporate Governance Disclosure Principles which provide a summary of good practice in company operation and performance by listed companies. The principles primarily focus on corporate governance of publicly listed companies as well as general principles for the operations of a business.
Limited Liability Company (LLC) Setup Most newly set up companies prefer Limited Company (LLC) since it provides limited liability for its members, flexibility, and very few restrictions in conducting business and making changes to its memorandum and articles. In 2003, Accountants and Corporate Regulatory Authority (ACRA) introduced Fast Track Companies to encourage both entrepreneurs and institutional investors to set up private companies limited by shares in Singapore. Also, to keep up with global trends, the Accountants Act has been amended to allow Limited Liability Partnerships (LLP) excluding professionals under the Director’s Fiduciary Duties Act from proceeding with an LLP. A Dummy’s Guide to Company Incorporation, ACRA
Sole Proprietorship or Partnership Compared to Private Limited companies, sole proprietors need low start-up costs. The disadvantages of such business structures are that there are operating difficulties, as well as not being generally accepted by banks, landlords, and others.
One of the first and most important decisions in setting up your business is to determine the appropriate business structure. The business structure you choose will determine your start-up costs, the administrative responsibilities, your personal liabilities, and potential taxes you would have to pay. The business structures and requirements for their incorporation are as follows:
Registering with ACRA
Proceed with registering your business. Get your SingPass or CorpPass ready for a sole proprietorship or partnership. With the approved business name and the required documents, head over to ACRA or access BizFile+ and log in with your CorpPass if you are registering a business or company. If you have engaged a filing agent to file for you, make sure to log in using the details of your chosen agent. With business cards printed, a bank account set up, or a website made, the process of setting up and registering your business is complete. Good luck with your business and remember, go to the best fitting businesses to provide the best company incorporation Singapore.
Now, we move on to the actual registration with the Accounting and Corporate Regulatory Authority (ACRA). To register a sole proprietorship or partnership, you must be at least 18 years old, not an undischarged bankrupt, and not disqualified by law to trade. If you are a part of a partnership, all partners must be capable of entering a contract. To register a company, you must appoint at least one local director who is a Singapore Citizen, Permanent Resident, or someone with an Employment Pass. The company secretary you appoint will also need to be local. Your company name must be approved before your registration can proceed. Ensure the name does not resemble others too closely and must not be obscene. Reserved names are kept for 60-120 days. Your name will be up for approval within an hour if you apply online, and you will be the first to know of its approval.
Complying with Legal Requirements
After having the said documents and appointing the important officers in the company, the filer proceeds with the application for incorporation and pays the incorporation registration fee. The Accounting and Corporate Regulatory Authority (ACRA) website provides a table containing the fees relating to the registration of companies and charges by the ACRA. The table includes the following among other things: general and other (only for bridging first sets of financial statements); companies limited by shares; companies limited by guarantee; unlimited liability companies; and public accounting firm/company. The filer should take note of the requirements of all the parties involved with the application such as the specific filing requirements for each type of company, the ACRA incentives, and the other applicable schemes. For instance, the filer shall prepare the relevant documents and information particularly on the director, shareholder, and company secretary by referring to the incorporation documents to ensure that all the relevant parties are in compliance with the specific incorporation documents.
Once the entity has already reserved the name, the filer should prepare the incorporation documents which generally include the following:
(1) company constitution;
(2) form for incorporating the company;
(3) signed consent to act as director of the company;
(4) signed consent to act as company secretary (for companies that do not intend to qualify for the “small company” criterion);
(5) signed consent to act as an auditor and approved public accountant (if the company is holding a general meeting of approval); and
(6) signed consent to act as directors and shareholders for nominee shareholder(s) where non-visible individual(s) or entity is/are holding the shares. After preparing the incorporation documents, the filer is now to appoint the director(s), shareholder(s) and secretarial filing agent(s), and appoint the auditors within three months from the date of incorporation, unless exempted from audit requirements. It should be noted that company secretary needs to be appointed within the first six months from the incorporation date of the company.
Additional Considerations for Budget-Friendly Company Registration
Using the Over-the-Counter Service. The paid-up capital for a company might not be “0” instead of the requisite $1, but in reality, you still saved $99 through a specific process called the Over-the-Counter Service. You must first apply for the Off-the-Shelf Company option, where a generic company is pre-incorporated by a firm, to access this unique method. Over-the-Counter Service is just another name for the transfer of ownership for the Off-the-Shelf company, with a non-paid-up capital, from the firm to your new company at any instant. This process is dramatically faster, sometimes taking less than 10 minutes, because a private shareholder himself with manual intervention in this process.
Converting into a Paid-Up Capital Company. On the date of incorporation, ACRA, the Accounting and Corporate Regulatory Authority in Singapore, automatically configures a new company with a company registration number, a memorandum and articles, and a paid-up capital worth $100. In order to offer greater flexibility to entrepreneurs and investors in Singapore, companies should not be registered with paid-up capital. Since the requisite $1 paid-up capital is largely symbolic, the continue company incorporation process creates a self-imposed obstacle. As another simplified alternative solution, you can always top up an existing nature with the minimum worth of paid-up capital at any time, but you cannot ‘refund’ the paid-up capital amount at your discretion. So, how can you avoid the $1 paid-up capital at all?
Before you jump into registration, there are a handful of additional considerations that could help you establish your company cost-effectively there. To ensure the long-term success for your business, registration is just one of the preliminary steps. Here we suggest three additional options to assist entrepreneurs, investors, and multinational corporations in the post-registration stage.
Tax Planning and Optimization
Renting and corporate taxation is another difficult problem. We must emphasize that it is important to conduct tax planning before any cross-border financial transactions are performed by the company. It is particularly important for TransCo’s shareholders not to conduct transactions with SubCo, which can be interpreted as accounting offenses or international tax fraud. All of our corporate secretarial services include personalized professional advice and solutions to make your operations successful. From My. Assist.Tools corporate secretarial panel, you can get advice on effective tax planning, such as dividends, subsidies, loans, and leases, so as to avoid accounting offenses.
To give an exclusive benefit to these start-up companies for three consecutive years, the authorities have issued a Multiple-Year Tax Exemption (NT) for new companies. The NT Tax Exemption includes up to $100,000 of taxable profit for the first year, $200,000 for the second year, and $300,000 for the third year. The implementing company cannot be a corporate shareholder of any other company, except the company of the operating company until the end of the year of the assessment. In general, the following schemes are: up to $75,000 and $100,000 of taxable profit for first-year NewCo’s and SubCo’s current shareholders. All companies or organizations that wish to elect any tax benefits must hire company secretarial services in Singapore, as the professional company secretary is responsible for notifying the IRAS of this notification. All details about this conditional reduce shall be shared on the company’s confidential My. Assist.Tools panel.
A Singapore private limited company is considered when small business owners decide to register a company in the island nation because of its potential tax benefits. Many of them have set up WOS or Singaporean companies to take advantage of the generous tax rules that even encourage the companies to create and expand jobs. This business guide will provide information on how to optimize tax planning strategies for private limited companies through exemption, protection, and reduction of various taxes.
Cost-Effective Business Operations
A great way to keep costs down is through shared workspaces. Anyone who has started a business in Singapore is grateful for friends or mentors that let you kick-start your operations from their workspace or lend you a desk or two. It allows you to register your business from the address, keep costs down, have credible business registration, and allows you to work together through the long nights and weekends. Shared workspaces come filled with infrastructure, photocopier, printer, high-speed Wi-Fi, all essential tea and coffee, and a community that is always there to help and be part of the support system when times are hard or you need the occasional fun. It allows for cheap workspace, easy networking and partnerships, and offers an outlet to release mental stress. There are many affordable shared workspaces in Singapore that offer a great community and environment suitable for startups.
Singapore has always been known to be Asia’s business capital that offers great opportunities for big and small businesses, a robust regulatory establishment, and an environment that is conducive to the establishment and operation of a business. Nonetheless, managing a company has always been about cash flow management. Consequently, while the costs of setting up and running a company in Singapore are extremely affordable, cash flow management is something that you will need to be diligent about. To help you get started, here are some tips on budget-friendly business set-up and operations in Singapore.
Accessing Government Grants and Incentives
The Grant: Early-Stage Venture Funding aims to accelerate the growth of promising local technology startups. Enterprise Singapore, partnering with venture capitalists, participates alongside a share of private investors in crystallising the growth of technology startups. When a 10-12% equity comes with up to $3 million investment in a successful startup proving its business model innovation, scalability, and providing high value-added proprietary technology, what more could any SME founder ask for? As other government grants contributing to the cost of company incorporation gradually reorient from startups toward scale-ups where sales validation and traction are provided, can you bundle some funds for this startup?
As a small and medium-sized enterprise (SME) yet to make revenues, the path of accessing government grants to save and improve your bottom line is open to you. While the majority of the government grants we recommend in this section cater to hiring talent and product development activities, and many require local employees, small and medium enterprises (SMEs) can pull resources to finance the other costs of company incorporation. With creativity, SMEs could discover other relevant government grants applicable to them. Even if no government grant applies to you as a one-man office, you can still tap into Singapore’s wide network of international agreements, which not only shaves the recurring payments for company incorporation but also opens the doors to overseas opportunities, such as collaborating with research partners and clients in those international markets, with considerable cost savings in supervising and supporting these activities within the region.