After the reservation of the company’s name, a professional firm must be engaged either to discuss and gather insights on the correct registration structure for the company or if the decision on the registration structure has been made, the professional firm should be engaged to begin the actual process of registration. Singapore allows for registration of the following business structures: a private limited company limited by shares, a partnership, a representative office, a public limited company limited by shares, and a sole proprietorship. The most common type of business structure in Singapore is a private limited company.
The very first process in starting a company is approaching a professional firm to prepare and reserve a company’s name. A company’s name must be reserved to start the registration of the company with ACRA. Upon approval of the company’s name with ACRA, the company’s name would be reserved for 60 days. Should the name reservation lapse, a new application must be made to have the name reserved again.
At present, Singapore is considered one of the most business-friendly economies. It is a key magnet for investors who come to establish their presence in Southeast Asia because the procedures and requirements for incorporating a new company in the country are simple. In this article, AsiaBiz Services offers our step-by-step guide in incorporating a new company in Singapore. Discover the following useful topics in the order listed:
Choosing the Right Business Structure
There are a few main structures to choose from when incorporating a new company, such as a sole proprietorship or a partnership relying on a team of partners. Approximately 95% of all businesses in the Singaporean economy are sole proprietorships, offering a cost-effective structure for business incorporation. Generally, new business owners can enjoy the numerous benefits of starting a business through registration by contributing a small sum to the owner. Besides fulfilling the legal requirements for company registration, an authorized firm can be structured to provide various legal and retail advantages. However, expanding the business may lead to increased operational costs, and offshore strategies may require financial and investment resources to operate effectively. These enterprises have several structures, including sole ownership, organization, private limited, and public limited.
Choosing the right business structure is important as it not only reflects the type of company you plan to set up, but also aligns with your future goals. Entrepreneurs seek a structure that not only facilitates growth, but also provides a mechanism for sustained progress. It is crucial to share the selected business structure with your corporate secretary and explain it thoroughly to avoid any complications during the incorporation process in Singapore. This structure should encompass the business activities and whether they represent a full-premise or a prospering approach. By opting for a corporate structure that allows for progressive growth, you establish a foundation for potential investors or lenders and enable a more adaptable company to interact with customers, employees, and other organizations.
Steps for Incorporating a New Company in Singapore
Once you have obtained the letter from ACRA approving the company’s name, you may proceed with the process of incorporating the company. The following documents are required, and must be lodged with the Registrar within 60 days from the date of approval of the company name: The company constitution; If the directors and shareholders are not the same, a Consent to Act as a Director and a Statement of the Non-Disqualification under the Companies Act attached to the written consent; Memorandum of the company; Declaration of Compliance; Those companies may adopt a model constitution, please select which type of company you belong to and prepare the company constitution appropriate to your choice. Some profession-specific companies are required to adopt a specific constitution and therefore, these companies are not allowed to adopt the model constitution.
Before exploring this section, please be informed that you must first apply for a company name with ACRA if you are not utilising a ‘ready-made’ company name offered by service bureaus for registration. As mentioned in the above section of the Handbook, you may apply for a company name with ACRA via ACRA’s electronic lodgement system at its official website. If your company name includes any regulated words (e.g. bank, finance, insurance, education, co-operative) or requires approval from the Professional Body (e.g. law, architect, accountant), you should apply for the approval of the company name and the approval letter accompanies the company incorporation application.
You may engage the services of a professional firm to help you with the company incorporation in Singapore. Engaging a professional firm means relying on the firm to assess your needs and file your application in an efficient and effective manner. Nevertheless, it is useful to know the requirements and processes when establishing a company in Singapore. This section will explain to you the procedures and the requirements step-by-step when incorporating a local company. For the procedures and requirements to incorporate a company with foreign shareholders, please refer to the following section of the Handbook.
Name Reservation and Approval
Once the company’s name reservation is successful, the next step is to incorporate the company. This includes appointing local/resident agents, at least a shareholder, at least a director (more than half of the directors should be Singapore residents), and at least a qualified secretary. Information required, such as identification card(s) of the shareholders and the appointed directors, must be prepared. Upon completion, the submitted requirements to ACRA will be reviewed and typically in less than a day, the company is successfully incorporated. Once the company is successfully incorporated and subsequently registered, 3 documents are required to be bound, which include the ACRA business profile, a share certificate, and a share register.
The first step to incorporate a company is to check the availability of the company’s name with the Accounting and Corporate Regulatory Authority (ACRA). The company’s name must be in line with the Singapore Companies Act and Free Trade Agreement (FTA). It should not be similar or identical to any existing companies incorporated in Singapore. The company’s name should also be decent and not undesirable. For example, the company name should not be offensive, vulgar, or sensitive. , or other related names will also generally be rejected. The name cannot be any kind of company or trademark that is not appropriate or required. Once the proposed company’s name is approved, this name will be reserved for up to 120 days for a small fee of S$15.
Appointment of Directors and Company Secretary
It is important to note that a foreign individual shall obtain an EntrePass or an Employment Pass before the registration process. In the case of a corporate director, an Employment Pass, a Dependent Pass, or a Pass for Permanent Residence should be issued to the nominee director for carrying out the tasks during the registration process. This scenario could potentially extend the registration process by a few days or months, as the documentation process will be affected.
– The company secretary must be a natural person resident in Singapore. The individual may be a shareholder or employee of the company. However, the company secretary should not be the sole director of the company. An additional (second) director should be in place.
– A private limited company in Singapore should have at least one local individual director. A local individual is defined as a person who is a Singapore resident or a person who has been issued with an employment pass, a dependent pass, or a pass for permanent residence in Singapore. There is no restriction on the nationality of the directors, and there is no requirement for them to have a residency status in Singapore. It is important to note that if foreign individuals or entities are intended to be the directors or shareholders of the company, the necessary work passes and other pass types should be obtained before applying for the company registration.
Before incorporating a company in Singapore, the directors and company secretary should be appointed.
Share Capital and Shareholders
The shareholders of the Singapore private limited company can be a person or a corporation. Any individual or corporation can become a shareholder of the Singapore private limited company, except a disqualified person according to the Companies Act. The Companies Act defines a disqualified person as, for the purpose of section 922 of this Act, the Controller of Insurance or the Head of Operations of the corporation referred to in section 932(2) of the Insurance Act (Cap. 142), is relevant to an insurer organized as a cooperative society within the meaning of section 76 of the Insurance Act (Cap. 142). The Singapore private limited company can have different classes of shares issued, namely ordinary share, preference share, redeemable preference share, and other share classes that attach to different rights and obligations under the Company’s Constitution after incorporation.
The share capital of a Singapore private limited company can be any amount. One share must be issued for the share capital. The share can be of any value but not more than the value of the share capital, and it can be further divided to 0.01 cents. If the company has only one shareholder, it is called a single-member company. Then the single member can own the share. The single-member company can be the first and only director of the company until a second director is appointed. A private company can have a maximum of 50 shareholders, subject to an exemption for private trust companies.
Registered Office Address
This address will be listed on the official records of the company. Should the company default in providing or maintaining the new officer’s address, it can be used when needed. The company can be guilty of an offense and faces fines upon conviction in court. The new officer may also face fines or disqualification of a new name. If you are unsure how you should handle this requirement, it is best to engage a professional firm to provide new company registration services to understand how to manage this requirement. If you are a foreign entrepreneur who does not live in Singapore, the registered office address will also become the address where all official communications will be sent.
If you do not have an address in Singapore to use as your company’s registered address, ensure that you arrange for registered office services from a professional firm and provide the address of the professional firm. Remember that a residential address cannot be used to register as a company office address unless permitted by a professional firm to provide such services. The company secretary must declare that the professional firm has given its consent to use its office address as the registered address of the company. Companies can also approach business centers that provide this service. Should you choose one that is not a professional firm, ensure that you note all legal letters sent to the company at the Law of Businesses Act in compliance with ACRA requirements.
Companies are required to have a registered office address, and the registered address must be an address in Singapore. The registered address is where lawsuits, legal documents, and official letters can be served upon the company. This must be a physical address and cannot be a P.O. Box. Since having a registered address is a statutory requirement, ACRA requires that the address is capable of receiving mail at all times. It is recommended to engage a professional firm to provide the registered office address to avoid any inconvenience.
Memorandum and Articles of Association
The Memorandum of Association will largely contain standard or adjustable clauses for the purpose of establishing the company and its relationship with the shareholders or guarantors. It will detail the roles, rights, and responsibilities of the shareholders as owners of the company. The Articles of Association will largely consist of standard or adjustable clauses for the day-to-day management of the company as well as its relationship with the director(s), shareholder(s), and company secretary. It will detail the roles, rights, and responsibilities of the company’s board of directors and the conduct of the company’s business. The statutory information required to create the documents is extracted from the company’s Proposed Constitution Information. Your customized documents can be uploaded by selecting the option “You will upload your own customized constitution documents” and “Browse” to locate and upload them. If you are happy with the default clauses created by the wizard, you are ready to proceed with the incorporation of your company by clicking “Next” to continue to the next step.
Memorandum and Articles of Association. The Company Incorporation Wizard will create a default Memorandum and Articles of Association based on your company’s information, assuming that you have not uploaded your own customized set of documents. Both documents will be generated for you in one continuous operation. The company information that will be automatically used includes the name of the company, the registered address, the shareholder(s) details, the director(s) details, the company secretary details, the shareholder(s) and the director(s) respective nationality, occupation, NRIC or passport number, residential address, and the share capital and the shareholding of the company.
Filing of Incorporation Documents
Once you receive the successful notification, you can proceed to purchase hardcopy registration information of the newly incorporated company. The hardcopies can be purchased upon successful registration and incorporation of companies by paying S$15.00. These company hardcopies are also known as ‘business profile’ and are certified by the Authority. Certificates of the incorporation of the companies are also available upon successful registration and incorporation. A certificate certifies that the company is legally incorporated and registered with ACRA. It comes under the BizFile+ profile of a particular company. Certificates can be bought at S$50.00 each, which is also payable to ACRA.
The filing of the incorporation documents at the ACRA in Singapore is also commonly known as the registration of a company in Singapore. You must ensure that the company incorporation documents are filed with the Registrar within 60 days from the date of the company’s incorporation. When filing the documents, you must make sure they are complete – all the forms are filled and signed according to the statutory requirements. Once the company is set up and incorporated with ACRA, an email notification is sent to the given email address. This is your official notification of the successful company registration in Singapore.
Requirements and Compliance
The first step of registering your name is to check accessibility and acceptability of your chosen company name. You can do this by visiting Register A Local Company on the ACRA website, checking a Summary of Company Name Availability Accessibility, and Keying in the name in the “Check Name Availability” field. After keying in the name, select the “By Company Name” option, enter the capture code, and then click “Search”. If the name is available and not similar to another already registered company, score contradicting wordings when compared with the intended existing company name, and is not found in the list of restricted names (with the use of registered initials), your company should be able to use your chosen company name as soon as possible. If the name is unique, but includes words that are regulated (or examples of restricted words/expressions that require ACRA’s specific approval) words or expressions that require the approval of the relevant authorities and/or articles of associations, you may need to submit your final preferred name, along with the required written approvals, to the registrar.
Registering a Company Name – Name Registration Requirements. Before incorporating a company, you may first need to decide on the company’s name. Do note that while deciding on the name of the business, you should pick a name that is unique and professional sounding, while not being similar to names of other companies already existing, as the Accounting and Corporate Regulatory Authority (ACRA) will not approve company names that are identical to those of other existing companies or that are undesirable. We provide detailed conditions for company names, including the meanings of undesirable company names.
As a new company, you’ll want to make sure that you’re able to put your best foot forward while you focus on building your business. To do so, this section explains in detail what you have to do to stay on the right side of the law. Among other key points of regulations for companies in Singapore, this section details the rules for registering and supporting your company name and those for setting up the company’s constitution documents.
Employment Pass and Work Visa
After incorporating a Singapore company, some foreign entrepreneurs need to apply for an Employment Pass or a Work Visa to be able to stay and work here legally. Here are the specific steps for you to apply for these permits. Depending on the nature of a foreign investor’s business and the personal background, he or she may apply for different permits subject to different procedures and requirements. A company can only hire foreigners who meet the standards set by the Ministry of Manpower. Thus, if you want to work in a Singapore company, you should meet the criteria to have a job in Singapore. You must have special professional skills that the company needs. Judicial authorities often consider these factors: work experience, relevant educational background, your salary, job information and personal data to assess the working capabilities that the company needs. The Ministry of Manpower (MOM) has a standard for the E Pass application: to have a chance to receive new employment, the company that you want to work for should provide necessary work experience with proper payment estimates of the applicant.
After owning a company in a foreign country, you may want to expand to Singapore to grow your business or evade the political risks in your home country. If so, it’s best to incorporate a new company. In this guide, we will provide a step-by-step procedure on Singapore new company Incorporation.
Goods and Services Tax (GST) Registration
The VAT registration process is completed at the same time. If you have a VAT registration in your home country, you may apply for repatriation by providing your Singapore VAT number to your home country’s VAT authority. Once you have registered your company with GST, sign the repatriation form, and it will entitle you to have your deposit with customs refunded to you, regardless of the value of the items you carry.
– GST-registered Company: The company is liable for charging GST on sales. – Non GST-registered companies: The company is not charging GST on customers, as they are not registered for GST. However, the company can claim back any GST that it pays to suppliers.
Furthermore, there may be two different types of companies registering for GST:
– The company has begun making taxable supplies. – The company is confident that they can recover the GST incurred by customers.
As a startup, even if you do not expect to meet the S$1 million threshold, you could gain from an immediate GST registration if you fulfill the following conditions:
– The company should be intended to make taxable supplies. – The company’s projected taxable supplies are likely to exceed S$1 million over 12 months. (At the point of this writing, the threshold has been increased from S$1 million to S$1.5 million, and will be effective on 1 Jan 2019, subject to issuance of notice). There is a retrospective view where any company making taxable supplies and the earning exceeds S$1 million within 12 months should file for GST registration within 30 days from TOD (time of determination) despite that income has not hit the S$1 million.
In some cases, GST registration may be mandatory when incorporating a new company, or you may opt for it voluntarily. The following requirements must be met before a company is eligible to register for GST:
Annual General Meeting and Annual Return
Annual General Meeting. You must hold an AGM within 18 months from the date of incorporation for a private company and not more than 15 months after the date of its last AGM for a public company. If exempted from audit, before the AGM, you are encouraged to present the financial accounts to your company’s members to be passed by its shareholders as a written resolution, or at least at the AGM. Note that the members need to pass it by a resolution for approval. However, if a written resolution lasts longer than what is allowed for filing the Annual Return, you will need to hold an AGM. Here’s what you need to prepare before the AGM: In the Notice for AGM, to file with ACRA (if your company is a private company), you should provide details of the proposed date for lodgement of financial statements (i.e., within 30 days after you pass the resolution). In the Director’s Report, you should provide an overview of the company’s results and position during the previous year and contrast between the current year and the previous year. In the Annual Report, discuss the company’s strategies, directions, and opportunities in the short and long term.
By the fourth month after its fiscal year ends, your company needs to schedule the AGM if required and file the Annual Return. If it is exempted from audit, it must file unaudited financial accounts in XBRL format for ACRA’s approval before they are filed. Also, within 30 days of the AGM, the company must lodge changes to its officers’ details, financial statements, and electronic registers (updated with the resolution of members) to ACRA.
Financial Reporting and Taxation
Taxation. Newly incorporated companies are eligible for the following types of tax: Partial tax exemption for startups: 75% of the first S$100,000 of income and 50% of the next $100,000 for the first three years of business operation, starting from Year of Assessment 2005. Full tax exemption for startups: 100% exemption on the first S$100,000 of income for the first three years of operation. Tax Rebate for Year of Assessment 2013: Rebate of 30% corporate tax payable for Year of Assessment 2013, capped at S$30,000. Research and Development tax benefits: Enhanced deduction equal to 250% of R&D expenditure subject to conditions under the Productivity and Innovation Credit (PIC) Scheme. These conditions correspond to the type of expenditures, the person undertaking it, and also the prior approval from the Agency for Science, Technology and Research. Early stage Venture Capital funding: 10%-20% tax deduction on investments in startups by VC funds.
Foreign Auditors. For a foreign auditor’s report to be recognized in Singapore, the audit firm must satisfy requirements from the Companies Act or the International Federation of Accountants (IFAC). Audit reports complying with the International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB) satisfy the IAASB Quality Control Standards. The qualification required for practitioners responsible for the audit work varies across different types of companies. Special purpose company: Compliance with ISAs. Private company: Compliance with either SFRSs or ISAs. Public company: Compliance with ISAs.
Compliance with the Companies Act
Incorporation is not the company’s only obligation in terms of acting in a responsible manner under the Companies Act. Among many other obligations, the company has, for example, the duty to prepare its annual accounts, to present the accounts of the company at a general company meeting, to keep minutes of the meetings and decisions of the members of the company, to indicate the assets and liabilities of the company in its balance sheet and to protect the capital and the creditors of the company by presenting it at the end of the financial year a global image of its financial situation. The same considerations arise with reference to the company’s responsibilities towards its creditors, who need to know the true financial position of their debtor. The Companies Act insists on the formation of a complete and fair view of the state of the company’s affairs at least once every financial year and presupposes the fulfillment of this obligation, without compromise.
Despite what many may believe, the requirements set out by the Companies Act in Singapore with regard to incorporation are determined by the real intentions behind the establishment of the company. The general assumption, unless proven otherwise, is that the purpose of the founding of a company in Singapore is the generation of profits for the individuals who direct it. The Companies Act thus seeks primarily to protect those who deal with the company or have commercial expectations in connection with it, even though they have no direct control over the company’s management.