Overview of company registration in Singapore
The process of registering a business in Singapore is defined in the Singapore Commercial Registration Guide as a ‘must-have’ in the business registration process for private limited companies in Singapore. The company profile includes information such as the business’s name, office address, business activities, details of the shareholders of the company, the directors’ profiles, and the company’s requirements. The steps involved in the company registration Singapore process are as follows: determining the company name, preparing the necessary documents, submitting the application, and paying the registration fees.
Singapore is often dubbed as a window to Asia due to its strategic location at the heart of Southeast Asia and its reputation as the business and finance hub in Asia-Pacific. Its well-developed infrastructure, political stability, and ease of doing business have made it a great place for local and foreign investors to set up their businesses and tap into the opportunities of the Asian market. Still, despite its attractiveness for setting up a business, the cost of setting up and the administrative requirements might pose expenses for the parties involved. For those who are unfamiliar with the process of setting up a business, things could be confusing in Singapore. That’s why this article aims to offer a clear guideline for both local and foreign investors who want to register a private limited company in Singapore.
Benefits of registering a company in Singapore
Another important benefit of registering your company in Singapore relates to taxes. Most of the big financial centers offer tax benefits for resident companies, and Singapore, in this sense, is not an exception. In particular, the authorities offer both local and foreign companies attractive tax benefits. Startups that grow quickly, for example, are rewarded with incentive schemes aimed to help their development. At the same time, newly created companies with limited resources enjoy a series of tax exemptions when they meet specific conditions. The benefits of company relocation in Singapore also include wise management of financial resources. By coupling the city-state’s lack of trade restrictions with transparent regulatory practices, Singapore companies are able to grow quickly and without too much oversight. And the effective methods available to reduce administrative costs, as well as the stable business environment, allow creating solid premises for a success story.
There are many great reasons to register your company in Singapore. International investors are especially interested in the city-state’s business-friendly economy. Indeed, the Singapore economy is known for its favorable tax incentives, investment promotion schemes, and intellectual property laws. The government also encourages investments in innovative companies. Funding is made easily available through grants, equity, and loans to foster disruptive innovations. Singapore’s well-prepared, highly-skilled workforce is also one of the nation’s notable attractions. In particular, individuals are sought with artificial intelligence, cybersecurity, data analytics, and internet of things expertise. Meanwhile, finishing first in both the global innovation and intellectual property categories, Singapore is an ideal place to turn an innovative idea into a commercially viable business.
Preparing for Company Registration
Registering a company in Singapore is simplified because the government does not ask to submit any upfront capital. Capital is required to run your business but it is recommended to be evidenced in the company’s bank account after it is incorporated. Note that Singapore companies borrow money from investors or lenders, particularly if someone wants to apply for an Entrepreneur Pass or an Employment Pass for individual tax cases. Once the shareholders have reviewed, passed, and adopted the financial statements by the majority of votes, the company is then obligated to file the tax documents at the IRAS (Inland Revenue Authority of Singapore).
Once you have the fundamental details for setting up your business, introduce a compliance cycle for your company registration in Singapore to avoid any penalties. The Singapore Companies Act requires that every company appoint at least one local resident director. He or she can be a permanent resident, a Singapore citizen, or an Employment Pass holder, who must be at least 18 years of age. If you want to register a company in Singapore and need an Employment Pass, you can obtain a Dependent Pass before you do so. Be sure to also take care of an eligible Permanent Resident or a Singapore resident who is willing to act as your nominee director. At ACC, all the director services are fully compliant, backed by experience, and come at a reasonable fee.
Choosing a company name
This is the first step when registering your company. You should make sure that the proposed name does not infringe any registered trademarks or cause any negative associations. The proposed name should not also include any sensitive words or imply that it has government approval. To register a company, there are a number of considerations defined by the Companies Act in terms of the name that must not be considered when registering. The proposed company name cannot be an identical match to an existing company name or one that is reserved and held by ACRA as unavailable. There cannot be a fully registered company that already exists, nor within the list of all businesses registered in Singapore established through the Business Registry. Company registration Singapore The company name must also be unique and meet legal requirements.
Determining the company structure
The choice of the form of the company will depend on many points such as the number of participants in the company, the percentage shares to be distributed among them, the responsibilities to be undertaken in the company’s activities and the properties to be owned by the company. It is useful to have knowledge about each type of company structure in order to get the most accurate options for each opportunity, to get suitable requirements in accordance with what is required to form the company or to take precautions and to take maximum benefit and minimum risks for the participant of the company.
Singapore allows different types of business structures determined by participants in the company and their involvement in the company’s activities and potential liabilities. Each type of entity has its own law establishing related regulations and requirements and opportunities for taxation (company formation, benefits, and requirements for taxation). For example, it is possible to form a company separately or together with other individuals. In addition, it is possible to be a partner in a limited partnership company or we can form a limited liability partnership (LLP) as well.
Gathering required documents
Before conducting the registration process, you must prepare some important documents which are also required by the Companies Act. First, Memorandum and Articles of Association which is prepared in compliance with the Model Constitution, which is crafted by the Company Registrar of Singapore, are the primary documents of the required documents. That means adopting a constitution text is not a must, but if you prefer, you can prepare a custom constitution text. Also, a declaration of compliance is among the required documents. This document includes the understanding of a company’s final status and ensures that all company members have no conflict on the establishing of the company. Such documents must be provided by a promoter of the company, nominated director, or company secretary.
Before investigating what these required documents are, let’s first examine if there are some special requirements for the branch of a foreign company since Singapore also includes them as a type of company. As adding a branch of a foreign company, the approval for the name of the company will not be necessary. Also, the Memorandum of Association of the company and Notarized Proof of Registered Address of the parent company and Appointment of 2 Local Managers for the Singapore Branch are required besides the above-mentioned general requirements.
After determining which business structure suits you the most, you can start the registration of the company. But, preparing the required licenses is one of the crucial steps you need to finish before stepping into this process. These licenses will take a good amount of time to be provided, so you better start the process early. If your company has loopholes, your registration can be rejected, so make sure to not forget any needed document.
Company Registration Process
Once the brand new company is successfully registered and abiding the all-agreed period for the Company Secretary scratches goes smoothly – taking mostly a week only – the new company will be issued the Certificate of Incorporation as a legal company in Singapore.
Proof of Foreign Corporate Documents including Notice of Address of Registered Office, Corporation Certificate (or Certificate of Good Standing), and Charter Documents or a Memorandum and Articles of Association – in English. All foreign corporate documents (excluding proof of foreign corporate documents) must be translated into English.
- Company Secretary’s Identification Card/ Passport
- Shareholder’s Identification Card/ Passport
- Director’s Identification Card/ Passport
- Documents required for stage 1 are as follows: (All documents to be notarized & certified by Telkom – Companies or other Notary offices.)
- Company Secretary ID Card Number
- Company Secretary Information/Name
- Shareholder’s Identification Card
- Shareholder’s Occupation
- Shareholder’s Nationality
- Shareholder’s Residential Address
- Shareholder’s Name
- Director’s Identity Card
- Director’s Occupation
- Director’s Nationality
- Director’s Residential Address
- Director’s Name
New company registration. (Minimum of S$300 paid-up capital.)
Submitting the application
Incorporation is carried out through ACRA’s electronic service called BizFile, and the entity type used for this guide was a “Company”. You can apply through the BizFile public site, or here for BizFile+ (available only for registered users). This guide uses the second option. Once logged into BizFile+, the first step to take is to select “Local Company” from the menu of Main Transaction types. On the landing page of Local Company Transactions, there are four types of filings for a local (non-foreign) company. They are labeled Alpha, Beta, Ultra, and Gamma, with the former two available only to registered users. Beta filing name suggests the electronic filing method. Ultralimited filing feature requires only company name and company type to be entered. If these are the only details that you are equipped with, this guide will bring the instructions back into play when the time comes to fill in the rest of the required information.
Forming a company through the online filing system is secure, quick and convenient, and can be done within 15 to 20 minutes for a fee of only $300 payable by credit card or online debit. All you need to do is to have your user ID and password at ACRA’s CorpPass or SingPass (applicable to individual transactions only) in order to file with ACRA. Do ensure that your application is complete and accurate so that it is processed on the first submission. This means it is important to have all relevant information on your new company and the dealings that will shape up from the onset, such as the appointment of the first directors. Feeling an urgency to get your own company up and going? Just get ready with the standard requirements in this step-by-step guide and you will have your immediate step resolved within a day!
Paying the registration fees
By cheque, where payment is made by post. The cheque shall be made payable to the “Accountant-General of Singapore”, and marked “Not Transferable” and crossed “A/C Payee Only”. The cheque should be drawn from such bank as may be approved by the Authority. Documents that are lodged will be returned after the cheque has been honoured. By credit card, where payment is made at the office of the Registry, EGI Services Pte. Ltd. at 10 Anson Road, #05-18 International Plaza, Singapore 079903. In accordance with Section 280(1) of the Companies Act (Revised Ed. 2006), a company must pay an annual registration fee for every year or part of a year. The registration fee must be paid by 31 January of each calendar year. For example, if the financial year is from 1 September to 31 August, you would pay the annual fee for the financial year ending 31 August 2016 by 31 January 2016.
Section 19 of the Companies Act (Revised Ed. 2006). The manner in which payment is made to the Registrar is set out in the Companies (Filing of Documents) Regulations 2006. All fees that are payable to the Registrar under these regulations may be paid in any of the following manners: In cash, only when payment is made in person at the office of the Registry, EGI Services Pte. Ltd. at 10 Anson Road, #05-18 International Plaza, Singapore 079903 or any other place designated by the Registrar for the payment of fees.
You are also required to pay the registration fees to the ACRA. The current applicable fees must be paid at the time of filing with ACRA.
Appointment of company officers
- The business name must be approved by ACRA and should match the name on NRIC or passport for the business appointment. The office address and email addresses for both communication and residential addresses of the director(s) should also be included in the application for the company’s incorporation. If a particular director is not ordinarily resident in Singapore, another individual is appointed as an authorized representative of the company. The personal information should also be provided by this individual.
- Director’s information required when filing for company registration: – Name as in NRIC, passport, and other known names – NRIC or passport number – Residential address – Date of Birth – Nationality – Occupation – Employment and office address, if applicable
- In cases where a specific number of directors is specified under the constitution, at least half of the total number of directors (rounded up to the nearest whole number) must be persons who have their principal residence within Singapore. If the total number of directors is an odd number, half of that number rounded up to the next whole number comprises the minimum number of directors who fulfill the local residence requirement.
- The company directors and the company secretary are the officers of the company. Every company must have at least one director who is a natural person and is ordinarily resident in Singapore. Likewise, every company must appoint a company secretary within six months from its incorporation date.
Obtaining necessary licenses and permits
In general, Singapore allows foreign companies to conduct operations in the country through their branch offices, local businesses or company incorporations. Wholly foreign companies also have liberal rights to conduct most business activities without needing to acquire a business registration; however, this does not relieve them of other legal obligations and requirements. More than just incorporating or registering a company, a business must also obtain business licenses and work permits before being operational in Singapore. Other than permits and licenses, businesses in Singapore are also required to obtain memberships from professional organisations or certain enterprises. For example, developers in the construction field must be a member of the Singapore Contractors Association or the Master Builders Association of Singapore depending on the business arrangement of the company. In this section, you will learn the necessary requirements and processes to apply for your licenses and permits to operate your business in Singapore.
Post-Registration Obligations
- Register with the Central Provident Fund Board. Employers who hire employees with at least an “E” pass and earning less than S$2,500 per month are to submit CPF contributions to the local employees once. Employers who hire employees earning more than S$2,500 are required to submit CPF contributions for all employees. Employers have to contribute to some of the employees’ salary. For permanent employees, the monthly contribution is 17%, and for temporary employees, it is 13% of the employee’s salary until the day of the birth month starts.
- Register for Goods and Services Tax (GST). If your business turnover exceeds 12 months, has been registered for the past 12 months, or expects that the business turnover in the next 12 months will exceed S$1 million, you are required to register for GST. The application should be submitted at least two weeks before it is due to be registered.
- Register with the Inland Revenue Authority of Singapore (IRAS). Within six months from the date of incorporation, a company is obliged to open a GIRO account with IRAS for Corporate Income Tax concessions and deductions.
- Register with Singapore Customs. Companies that wish to import, export, and transact with Singapore Customs for trade declarations are required to apply for a Customs Account. Applicants are required to have an e-Service Authorisation System (e-Safe) to transact with Singapore Customs.
- Register with e2i. After incorporating a company, employers are required to visit the Employment and Employability Institute (e2i) to verify the NRIC numbers and the identities of employees working in Singapore within 14 days after the commencement of business.
Registering for taxes
Importantly, if companies expect their taxable supplies to exceed S$1 million over the next 12 months but their taxable supplies for the past 12 months were lower, they are required to monitor their future supplies and register for GST if they exceed the threshold. The Singaporean authorities consider supplies made for non-business or private reasons as non-taxable supplies, as are the exports of goods. They also consider the provision of digital services to local customers as taxable supplies. If your company’s taxable supplies in the past 12 months were lower than the threshold of S$1 million necessary to register for GST in Singapore but you anticipate that they will exceed the threshold within the next 12 months, Singaporean authorities may require you to register with them.
GST registration is imposed on companies with an annual turnover in Singapore of more than S$1 million over the past 12 months or have a forecasted turnover that exceeds S$1 million in the next 12 months. Additionally, any company that imports or supplies digital services to consumers in the country is also liable for GST registration, regardless of their turnover. The current GST rate in Singapore is 7%, which is lower than the global average. This has made the country not only a hub for international trade, but also a key destination for large corporations that need office space in Singapore or wish to benefit from this Southeast Asian nation’s low tax rates. The fall in the Singapore office rental rate after the Covid-19 pandemic offers companies further opportunities to benefit from the nation’s low tax rates and strategic location.
Opening a corporate bank account
Be aware that the regulations in Singapore are rather rigorous when it comes to the opening of a corporate account. This stringency is in response to worldwide concern about money laundering, terrorism funding, and other illicit financial practices. Because clear and explicit rules are necessary, industry standards that meet and exceed the requirements using extremely high standards are subscribed to, which indeed ensures comfort. Each financial institution is equipped to provide thorough interaction between customers and bank officers, who will conduct a rigorous ‘know your client’ (KYC) assessment process. This includes gaining extensive understanding of the business and the nature of its business processes. To assure comfort and success, this represents the first step.
Your consortium of service providers will work with you to set up an account at a financial institution in Singapore. This account is necessary in order to complete the company registration process and provides an essential platform for conducting business in the country. It may take some time for the account to be opened; in the meantime, it is useful to have a temporary account for specific purposes, such as paying salaries to employees and expenses for company setup. For such a temporary account, a letter from the bank confirming that it can open an account for company incorporation enables the company to proceed with the company setup procedure.
Complying with ongoing reporting requirements
If the company is a Singapore-incorporated company, the same name can be used for the company. Make sure it has been reserved. If the new company is to have a different name from that of the foreign counterpart, ensure that the proposed name complies with the Singapore Companies Act. If you are setting up a private limited company, plan in advance which financial year you would like the company to operate and end. For subsequent years, this financial year can change and stretch to a maximum of 18 months. Remember to comply with the deadline for the first financial year end, especially if the company ended a financial year of more than 18 months.
According to the Companies Act, at least one director of the company must be a natural person and must satisfy residency requirements. A director is considered to have satisfied the local resident director requirement for a company in a particular financial year if the individual has a local residential address and is a Singapore citizen, a Singapore permanent resident, an Entrepreneur Pass (EntrePass) holder, an Employment Pass (EP) holder, or a Dependant Pass (DP) holder. As such, you will need to appoint a director if you have not met the residency requirements. Note that another way to satisfy the residency requirements is to purchase the nominee director service. At least one company secretary (who is ordinarily resident in Singapore) to whom the affairs of the company are entrusted. This is another requirement that can be waived should you purchase the nominee company secretary service. The company secretary must not be a sole director.
The filing and reporting requirements above outline the minimum. This does not mean that a company is free to not file or report, even if it has avoided any of the requirements listed above. If you are running a business (with good cash flow and a healthy bank balance), the last thing you want is to be engaged in correspondence with the authorities detailing why such filing or reporting requirements were not met.