Singapore is one of the world’s leading startup landscapes thanks in part to its startup-friendly regulations and productive workforce. It also creates an attractive startup development platform, housing a vibrant new-business development ecosystem and a pilot and scout platform for multinational and large multinational corporations. In Singapore, getting permanent residence is easier than in many other countries, averaging 5.5 years on average. Entrepreneurs looking for a friendly startup environment should familiarize themselves with the startup ecosystem in Singapore, which startups should look at, and case studies of successful startups moving to Singapore. The Singapore government encourages foreign citizens to form companies in Singapore, which can be done through a separate employment pass known as an EntrePass. Foreign citizens are able to register a private limited company in Singapore and share 100% ownership of a small business, which can be done under a tax-division code.
Entrepreneurs who intend to operate their business by the end of the year acquire an EntrePass, then apply for an employment pass. Those who don’t meet the Employment Pass Eligibility Certificate requirements are encouraged to incorporate a company, as a foreign individual can own 100% of a private limited company. Technically, the term “company incorporation” is more appropriate than “company registration”. Singapore business owners only undergo a short legal process with basic information when setting up a company, including an investment structure and currency, and the promoters’ personal details, including identification, residential address, and contact information. Company registration can be just part of the whole set of steps that must be executed for setting up a business in Singapore, as another term can be “corporation commissioning”.
Benefits of Company Registration in Singapore
Attributes such as a skilled multiracial workforce, consistent economic policy, a sound system of governance, robust legal detachable, and cyber infrastructure are what make Singapore an excellent hub for investors. With many international corporations making Singapore their Asia Pacific headquarters, entrepreneurs can leverage the island’s innovative and prosperous environment to hone their grooming business skills. Boasting one of the most pro-business environments and home ground to over 60 accounting firms and 4000 professional service providers, Singapore provides an environment that extends strong support to enhance and grow startup businesses on foreign soil, enabling startup owners to team up with various experts in the accounting, legal, tax, and corporate secretarial fields to grow and build. Aligning oneself with experts gives you opportunities to network and engage with like-minded entrepreneurs.
Birthed in the heart of Southeast Asia, Singapore has one of the most sound startup ecosystems in the region. Home to 270 billion-dollar tech companies (as of July 2020), Singapore offers a harmonious blend of opportunity and resources to the country’s diverse and budding community of entrepreneurs. Boasting a strategic geographical advantage, law and order, top-class regulatory standards, and an attractive taxation system, Singapore is an open door for entrepreneurs looking to infiltrate Southeast Asia. So if you are considering company registration in Singapore, we say – go for it! In the next section, we’ll explain the benefits for more clarity on why you should consider Singapore as a business location.
Requirements for Foreigners
Visitors can build a variety of partnerships in Singapore, provided they are at least 18 years old. Shareholders must provide directorships, but it is worth noting that the shareholder can also act as the director. Your business will cost S$15 or more if you decide to print your company cloth. Based on your company’s preferences, the printing agency will determine your offerings. As a non-resident entrepreneur, you need to provide all the relevant identification and can sign when you are your parent company’s representative. Remember to provide an email or phone number that you can contact to receive important letters and requests. If none of the directors or shareholders of your joint stock company is a local director, you must hire an approved company secretary. You have six months from the start to hire a company secretary from any of the three companies programmed for the joint stock company.
Foreigners seeking to open a business in a foreign place face a multitude of obstacles when it comes to Singapore. The island city-state benefits from the World Bank’s top ten structures and the first rank when it comes to doing business in the world. It may be surprising to learn that optimal build and accessibility in these places make company formation in Singapore simple. Here is a clear guide to registering a Singapore business as a VAT or non-resident entrepreneur, and the schedule is the same for citizens, permanent residents, and entrepreneurs.
When company registration in Singapore for foreigner face more obstacles starting a business in Singapore. You may need someone who is a citizen, permanent resident, or Employment Pass (EP) holder to act as officers and directors, depending on your visa. Consider finding a local nominee director before starting the business. To attract foreign businesses, Singapore introduced the Entrepreneur or Start-Up Visa, which led to the Employment Pass mentioned earlier. Because entrepreneurs moving to Singapore must already have business operations, the EntrePass will only be of interest to some newcomers. Foreign entrepreneurs can get Singapore entrepreneurs to look at Company Secretary.
Choosing the Right Business Structure
Generally, a branch office is only suitable for companies that have a strong track record of success overseas. The Registrar of Companies scrutinizes the level of support from the parent company before deciding on whether or not to approve the registration. Branch offices in Singapore have less freedom compared to local companies or subsidiaries. There are limitations on populating the Board of Directors and no flexibility for local directors. Branch offices are treated as non-residents and are subject to higher tax rates. The approval process is also generally longer compared to the registration of locally registered businesses.
Sole Proprietorships: Commonly chosen by small import/export agencies, photographers, and technologically savvy people running web businesses, this type of business is easy to set up and commands no archaic regulations. A sole proprietorship is simple to register and has few entry barriers, but it offers no protection for your personal properties. At the end of the year, all profits earned by your business are declared as personal income on your income tax form. For tax reasons, some people combine the day job with a sole proprietorship business to some extent.
When registering a business in Singapore, one of the first decisions to be taken is the choice of a suitable business entity. The best choice depends on your individual business goals and personal circumstances. Here is an overview of all business structures available for registration in Singapore:
Step-by-Step Process
Processing starts with the guidance of a professional corporate service provider who then files the necessary paperwork with the Corporate Registrar and prepares a statutory book or Company Kit for the newly established company: embroidery of the Memorandum and Articles of Association and company stamp, issue of share certificates, and more. The new company can also benefit from secretarial services for at least six months, during which the provider files for share transfers, mortgages or debentures, attends general and board meetings, and distributes company documents and updated personal files. The package also includes one or two authorized representative officers for travel and annual leave to be elected. However, as the e-Filing system is much more secure and efficient, providing real-time updates on the company’s status for free, strongly suggests you register the company using the e-Filing online services.
Registering a company on paper is quite easy with the professional services of a secretarial company. Most companies in Singapore are currently registered by filing the Form 6, the “Notice of Situation of Registered Office and Office Hours and Particulars of the Registered Agent, or in the case of a company in the process of formation by a professional firm,” as well as the company’s Constitution on paper. You have the choice of buying a hard copy of Form 6 and the company’s Constitution from ACRA or just downloading these papers from the eCitizen portal on the home page of the ACRA website. The company’s Constitution can also be rewritten on other papers, which must be signed and stamped by the initial subscribers concerning the compliance of the constitution with the Companies Act of Singapore. This must be performed by a lawyer or a Singaporean registered company secretary within 60 days of the company’s incorporation.
Registration of company on paper
1. Go to the website of the Singapore Corporate Regulatory Authority, browse through the vital information, and then click on the “E-Services” option.
2. Register as an online user.
3. Log into the system.
4. Follow a number of on-screen instructions and submit the completed form to the Registrar.
5. Select a payment method to pay the registration fee using a credit card. Alternatively, use NETS at the counter of the Centre. A confirmation page will appear after the successful completion of the transaction.
6. You may then print the confirmation page for reference and a duplicate copy of the transaction records generated from the Singapore Land Authority.
Name Reservation and Approval
It will reserve the name of the company for 120 days while performing other pre-registration procedures for the company. The transfer of corporate property will be cancelled upon special notice on the transfer form or upon transmission of the relevant sections from the internal vessel. Please note that reserved companies are not available in the names of “PYT LTD” or “PVT LTD”. To do this, the company must specify the company name in the company name reservation request form. You can then check your name by running a business name search on the business name of the Business Taxation region. Once you determine that the name is not already registered and is included in the number, you can submit an application to register the name. Submit a business name application and register for a name in the name registration section below.
What’s in a name? An identity and a brand for your company in Singapore. Here are the steps that are easy to follow: You must first check with Singapore’s Accounting and Corporate Regulatory Authority “ACRA” to verify that your company name does not infringe existing or reserved trademarks, is not misaligned with the existing Copyright Act, and is not offensive. During this step, you may find that the name on this list is too generic. You may also check the existing domain names in Singapore or elsewhere before doing business in Singapore. Get the specific name information. Once the company name is removed from the ACRA list and you have had a good look at the registrar’s “GD” brand, you can begin using the company name.
Appointment of Directors and Shareholders
One shareholder must be appointed at all times. It is not mandatory to appoint one director who is a shareholder. To be a shareholder, one must be an individual or a corporate body. The majority of the directors must have their residency in Singapore. Directors must be representatives of foreign entities registered with ACRA. All the directors of a company must be at least 18 years old and without a disqualification order. They must not be an undischarged bankrupt. Also, if you have been entrusted as a director and the judgment has not been discharged by the High Court Official Receiver or the Official Assignee in the last five years, you are disqualified.
One shareholder must be appointed at all times. It is not mandatory to appoint one director who is a shareholder. A director must be a natural person of full age who is not an undischarged bankrupt and has no disqualifying factors, nor should they have been disallowed by the judicial official. To be a shareholder, one must be an individual or a corporate body. The majority of directors must have their residency in Singapore. Shareholders do not need to be residents. Shareholders can serve as directors. Briefly, corporate directors are not allowed. This means that if a corporate entity is a shareholder, an individual is to be designated as a director.
Preparation of Company Constitution
As of 3 January 2016, the Companies Act and the subsidiary legislation under the Companies Act underwent reforms. As a result, the new changes affected certain administrative aspects of the model constitution as some provisions within the Companies Act and the subsidiary legislation are procedural in nature. In light of this, our registry took the opportunity to update the constitution forms (the CIFs) to ensure that they are up-to-date, consistent with the statutory requirements, and user-friendly. The revised model constitution is referred to as the ‘modified model constitution’ (that can be found in Appendices F and G). Optional provisions that can be adopted have been included within the modified model constitution. The amended provisions within the modified model constitution should be checked intermittently for changes as a result of statutory amendments over time.
The model constitution consists of the Company Incorporation Information Form (CIF) Company Limited by Shares and the Company Incorporation Information Form (CIF) Exempt Private Company Limited by Shares. These constitutional forms contain standardized provisions that will apply to every company incorporated when adopting these forms as their constitution. As far as possible, the model constitution seeks to be comprehensive and to simulate a self-contained set of rules that one would normally find within the Companies Act, by incorporating procedural details that already exist within the Companies Act and its subsidiary legislation. The model constitution is extensive and may not be suitable for companies with specific areas of concern, company activities, or for specific circumstances. Our registry has therefore provided for additional clauses to be adopted if a company requires further rules that are different from those within the model constitution. The adoption of these additional clauses was catered for in the manual and online e-services.
Every non-exempted company must submit a Memorandum of Association under the Companies Act. A private company must also submit Articles of Association. A company that adopts the model constitution can meet this statutory requirement through the checkbox system. In light of this provision, the manual focuses on the preparation of the company’s constitution.
Submission of Documents to Authorities
Once the application has been approved, ACRA will issue the incorporation certificate and a business profile. Although ACRA is implementing an electronic registry where an electronic copy will suffice. Be sure to inform your incorporation specialist of the best mode of collection for all these documents and audits. They need hard copies for their records. Once they have the incorporation certificate and business profile in hand, your appointed incorporation specialist should contact the shareholders to do a final check that everything is in order. They will confirm the payment of outstanding payment, prepare a cheque, and lodge it to the local bank, while they affix the paid-up capital in the business profile. The company is then incorporated and fully operational.
Now that the shareholders are settled, the documents have to be submitted to the Accounting and Corporate Regulatory Authority (ACRA). You can do so yourself or have the incorporation specialist handle it as part of their service package. In the meantime, open the corporate bank account for your soon-to-be-incorporated company. You can do so with any of the local banks, if your schedule affords you the luxury, or opt for a one-stop service at local banks like DBS, which has a representative office located right in the Tannery Lane building that houses our office. Remember to take the necessary documents for verification when opening the corporate bank account.
Obtaining Business Licenses and Permits
Know what business activities require a business license. With the recent changes to the Companies Act, it is now easier and faster for small companies to incorporate and start business operations. Do you want to know which business activities require a license? Anyone starting a private limited company should know whether the proposed business activity or activities require a license. This section contains lists of business trades that require a business license and has information on the purpose, types, qualifying criteria and approving authority for 8 business licenses required for specific business activities. Review the requirements for obtaining each of these licenses and permits, including the criteria that your business must meet and standards that need to be attained. Complete the checklist of activities and their descriptions so as to clearly communicate what your business plans to do and the steps to be taken.
No, not all businesses require a license to operate in Singapore. Examine what is meant by a “license”, an “activity”, when a license is required and how to apply for a business license. Are you on track for filing applications – are there multiple business licenses required? Avoid penalties and delays – remember just because one business license or permit is applied for and the approval has been secured from another agency, it does not mean that nothing further is required for the other licenses and permits. A business may need several business licenses and permits so check if any additional licenses are needed.
Taxation and Compliance
To be successful in expanding into a foreign market, an expanding business owner cannot ignore the tax consequences of operating in a different jurisdiction. Whether a business has an obligation to comply with the local tax requirements will depend on if it triggers a corporate tax entity. There are important compliance obligations that a business should be aware of, such as the filing of annual tax returns, maintaining proper accounting records for a minimum period of 5 or 7 years, and obtaining statutory in-house approval for certain transactions. A business should also assess if there are available tax incentives that it can benefit from. Foreign-sourced income remitted in Singapore is taxed at 17% if the following two conditions are met: it derives from activities carried on outside Singapore and it is not deemed received in Singapore.
A foreign-owned Singapore private limited company is taxed at a corporate tax rate of 17%. Singapore follows a territorial basis of taxation, so corporate tax is imposed on income that arises in or is derived from Singapore, as well as on foreign-sourced income if this income is remitted to Singapore. The base year for a YA is determined by the year of assessment relating to the third income year immediately preceding that year.
Understanding Tax Obligations
Singapore has a number of tax incentives in place designed specifically for emerging businesses. Ensure, then, that you benefit. For example, if your company is newly incorporated, you may be entitled to a full tax exemption on new start-up companies, which may apply if your Singapore resident company meets certain criteria. If you meet these, your company is eligible for a full tax exemption on the first S$100,000 of chargeable income for the first three consecutive years of assessment. You may also be eligible for a partial exemption on the next S$200,000 of chargeable income for the first three consecutive years of assessment, after the full tax exemption for new start-up companies. These initiatives are designed to encourage entrepreneurship in Singapore.
It is important that you understand your company’s tax obligations in Singapore. This will help you to fulfill your legal obligations and avoid penalties. There may be several categories applicable to your company’s given circumstances. It is important that you determine these from the start. For example, you may need to pay corporate tax or withholding tax. If you are not certain which tax obligations apply to your company, you should consult a qualified accounting and tax consultant.
Compliance with Accounting Standards
The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of business entities, public accountants, and corporate service providers in Singapore. It also functions as the national trade registry. The agency oversees the implementation and filing of financial records, as well as companies’ audits and the appointment and registration of corporate company service providers, also known as filing agents. The agency registers and incorporates new companies, handles new debts and corporate finance works, and verifies financial data submitted by companies to ensure all are meeting statutory compliance and disclosure requirements. The ACRA also has regulatory functions to support public providers who offer financial reporting, statutory documents, and other corporate services.
Compliance with accounting standards is also mandatory for companies registered in Singapore. As a general rule, Singapore companies are required to maintain proper accounting, regardless of the company’s structure, size, and operations. They must also prepare financial statements that comply with the Accounting Standards issued by the Accounting Standards Council. The financial reporting needs to represent a true and fair view of a company’s financial position.
Employment and Immigration Regulations
EntrePass: The government introduced this category to facilitate entrepreneurs with a broad knowledge of technology, healthcare, and/or global business sectors to establish innovative businesses in Singapore. Such businesses can be part of an incubator program supported by a government-appointed incubator, those that are participants of global start-ups, or companies or firms that have raised at least S$1 million in venture capital financing from investor(s) recognized by an accredited entity. For specific requirements and details on required documentation and processing, visit the Employment Pass Service Center website.
Nonresidents starting businesses in Singapore can submit their applications for a work pass when they register their company with the ACRA. They will need to obtain one of the following: Employment Pass, EntrePass, or Work Permit. “A person starting a company in Singapore can generally apply for an Employment Pass once the company has been incorporated,” says Boden. The Employment Pass is required to appoint the person as a director of a Singapore company. After incorporating a company, nonresidents must submit their application for the Employment Pass, complete the necessary formalities, and upon approval, effect changes on the corporate records of the company. For professional, quota, and other specifications, visit the Employment Pass Service Center website.
Post-Registration Considerations
You can register a company in Singapore as a foreigner because Singaporean laws allow full foreign ownership. The company is considered a tax resident, and therefore tax is enforced on a territorial basis. The register of the system in Singapore is extremely professional, there is one disclosed shareholder and one disclosed director.
Even after your company is up and running, you can control all your operations abroad from the comfort of your home. Singapore offers a simple and informative way to register a business. They require five things from anyone that wants to register a private limited or “Pte Ltd” company. These are shareholders, directors or the sole director/secretary, the company’s name, at least one shared capital value, the registered address, and appoint a secretary.
There is no need for a nominee director in Singapore, especially when you are incorporating a Pte Ltd. In Singapore, there is no need to have a resident director either. A Private Limited in which the only director is the company secretary is now legal after ACRA altered its laws. A Secretary is, however, something all companies in Singapore must have, but you can hire one using one of the many online secretariat services like “LAUNCH” or “BoardRoom”.
Local business founders in Singapore can opt not to rent their own office or industry space, but foreign entrepreneurs must acquire a work pass first before they can incorporate a company. However, you can rent a serviced office or industry space from those that rent out co-working spaces, where you can work from as well. Traditionally, many entrepreneurs do that while waiting for their work pass to be approved.
Opening a Corporate Bank Account
The usual package contains tested documents (in original). Business Documents. Certificate of Incorporation. Business Profile. Passport copy. Share Holding Company Business Brochure. Certified (by Notary Public) passport copy of the director. A bank reference for non-resident shareholder or director at the desired point of appointment. Additional Documents (for some banks) – In Original. Processing time and costs. Once your application is fully submitted to the account opening, the bank should provide a reply and the account number that is usually opened in 3 to 5 business days. However, it is important to stress that this is just a standard processing time, and it may take longer in particular cases, banks, and under unusual circumstances.
Choose the right institution. You should have solid criteria when selecting a bank for your business. First of all, take into account the purpose of the account and required transactions. You may consider going to a small international bank. Its services for non-residents are sometimes in higher demand from overseas companies because of the more flexible rules compared to local banks. Check the bank’s transaction fees and banking products. Banks charge fees for each banking transaction by businesses as part of their services. Check the bank’s qualification process and time horizon. You should select a commercial institution that’s ready to take time to onboard a foreign company and that won’t be too complicated for your business. You also need to consider the costs and fees for these services. It makes no sense to look for a bank that will require insignificant maintenance costs if it charges a lot for each operation you need. Make an appointment with the bank. You have to deposit documents to the bank’s officer. The set of documents matching the Visa requirements for Singapore company registration should be presented to the banks.
Hiring Local Employees
In relation to the company’s management team, Malaysian citizens are allowed to operate in their Singapore counterparts without quotas, and they are generally seen as skillful people. Singapore Professional’s Prospective may be issued to qualified foreigners working in specialized industries, business leaders in partnership with a company, or option members, entrepreneurs, or high-caliber employees of a business corporation. To be approved for an EntrePass, interested applicants will require the approval of the business proposal and the latest three years of audited articles with a single or combined annual sales turnover of at least $100 million. Lastly, the Employment Pass would apply to professionals, managers, executives, and specialized staff employed by a Singapore company. In order for the employee residing and working in Singapore to help obtain their work permits, the Singapore company and the employee must be employed first. After the Employment Pass appeal is empowered to the Ministry, the labor force and their appropriateness will be submitted for approval.
If a non-resident of Singapore intends to incorporate a company in Singapore and be involved in the management of the company, there must be a minimum of one Singapore resident director. For a company to be considered a resident in Singapore, the director must be a Singapore citizen, a Singapore professional prospect, and the holder of an Employment Pass or a Dependent Pass. Alternatively, they must receive a Legal Certificate of Appeal for an Entrepreneur Pass. You can have a nominee director appointed upon your company’s incorporation. We see the director as a caretaker role, where their role is to comply with any requirements for the incorporation of the Singapore Company. The nominee director will then resign from the appointment and cease any involvement (if any) in the company from the date of registration of the new director.
Intellectual Property Protection
When it comes to technology and capital markets, Asia-based inventors turn to Singapore as an ideal place to set up a technology company that they can expand out to dominate the global market. Moreover, with the heavy international investments in the company, inventors can quickly obtain the capital needed to grow and expand globally. To quickly grow and compete with the world’s largest technology companies, technology entrepreneurs (including those residing outside of Singapore) should consider setting up their technology company in Singapore.
Singapore has a rich intellectual property landscape, underscored by the World Economic Forum’s Global Competitiveness Report which ranked Singapore first worldwide (for the seventh consecutive year). Therefore, to remain competitive and potentially scale a company globally, it is imperative to secure ownership rights early on in Singapore. Thus, documenting the underlying intellectual property ownership with IP assignment agreements can help start-ups control their IP.