How to Register Your Company in Singapore
Why registering a company in Singapore is a good place for your business?
Home of many varieties of businesses and a place which has strong trade and investment activities, Singapore is one of the most ideal place for company incorporation and formation in Asia. By creating your own company in Singapore, your company can benefits from Singapore’s network of Double Taxation Avoidance Agreements, many free trade agreements and Investment Guarantee Agreements, also protection of ideas and innovation by its strong intellectual property laws.
With the company setup in Singapore, creating a company registration is the first thing people need to learn in order to be able to execute all of business activities legally and with ease.
Types of companies in Singapore which you can incorporate
In Singapore, there are several types of business entities that you can choose to build depend on your situation and plans. Factors such as the nature and purpose of your business, size and scope of your business, plan for having outside investors, and business needs are few things that need to be considered when you decide which company type that suited your future business best.
The types of business entities in Singapore according to Accounting and Corporate Regulatory Authority (ACRA) are:
- Sole proprietorship, a business which is owned by one person only. This is suitable for small scale and low risk businesses but not recommended as it does not protect the owner’s personal assets from business liabilities.
- Partnership, an association of two or more persons (with maximum 20 partners) carrying on business in common with a view to profit. Partners personally liable for partnership’s debts and losses incurred by other partners.
- Limited Partnership, a partnership consisting of two or more persons, with at least one general partner and one limited partner. The difference with partnership, in this type of business only the general partner that has unlimited liability, liable for debts and losses of the limited partner, and able to close the business.
- Limited Liability Partnership, a partnership where the individual partner’s own liability is generally limited. Partners personally liable for debts and losses resulting from their own wrongful actions, but not that resulting from other partners.
- Company, a business form which is a legal entity separate and distinct from its shareholders and directors. Private company can be owned by 50 members or less and public company can be owned by more than 50 members.
Among those types of business entities, private limited company (Pte.Ltd.) is one of the most common to choose by entrepreneurs as it allows the owners to avoid personal liability and risk. The shareholders of a Singapore private limited company are not liable for its debts and losses beyond their amount of share capital. The advantages of choosing the private limited company are as following:
- Separate legal entity
- Limited liability
- Perpetual succession
- Ease of raising money
- Positive image
- Easier transfer of ownership
- Tax benefits and incentives
However, there are also some disadvantages if you choose to make private limited company, such as:
- More complex to set-up
- Must comply to several requirements along its run
- Several information of the company must be disclose to the public
- More complex winding up procedures
These disadvantages are actually to protect all the aspects of business including owner, employees, and customer also make sure that the company can run in the right direction. If you are entrepreneur who plans to bring outside investors to your company, secure bank loans, and want the company last long therefore private limited company might be the best choice to set-up.
How to register a company in Singapore?
Now that you knew what kind of company you want to make, you must find out how to do company registration in Singapore. All companies in Singapore first must go through registration process as per the Companies Act. Cap 50 with The Accounting & Corporate Regulatory Authority (ACRA) which acts as the Company Registrar of Singapore. The registration is executed online using the BizFile+ feature in the ACRA website. Some process of the company registration in Singapore such as company law and compliance requirements can be quite tedious and unfamiliar for foreigners or even local entrepreneurs, so it is recommended to use the service of a corporate service provider to help do the registration.
What are the requirements for company registration in Singapore?
Here are the list of requirements you’ll need to provide to do company registration in Singapore:
- Company name
In order to register a company, first you must receive approval for the new company name from ACRA. The name will be rejected if it identical to another existing company name, undesirable (dirty, obscene,or rude), similar to established names or trademarks.
The company must at least has one person ordinarily resident in Singapore who appointed as the director. Directors perform a supervisory and managerial role in the company, thus must ensure that the company is legally compliant at all times. A director can be share-holding or non-shareholding, with the minimum age of 18 years without any bankruptcy or convictions of fraud or dishonesty record. There is no limit on the number of local or foreign directors that a company can appoint.
A private limited company in Singapore must have at least one and a maximum of 50 shareholders. The shareholder can be either a person or legal entity such as another company or a trust. If the shareholder is a person, he/she must be above 18 years and can be local or foreigner. 100% foreign or local ownership is allowed. These shareholders own a part of the company in proportion to the shares they own by buying it from the company. They usually not directly involved in the management of the company, and entitled to the profits by way of dividends.
- Company Secretary
In compliance with the Singapore Companies Act, Section 171, a Singaporean company has 6 months to hire a qualified company secretary once the company incorporated. A company secretary can be an individual or a separate company, but natural person residing locally in Singapore. If a company has sole director/ shareholder, the same person cannot also act as the company secretary. The position also cannot be left vacant for more than 6 months at any one time. The secretary duty mainly responsible for administrative task in the company.
- Share capital/Paid-up Capital
The company must have an initial paid-up share capital of at least S$1. The minimum issued capital is one share par value. The share or paid-up capital can be increased anytime after incorporation of the company.
- Registered Address
When you registered a company, it must have a physical address and cannot be just a PO Box. Depends on the business category you run, you also can use residential address. In case you want to use residential address as business address, eligible flat owners/occupiers must check approval from HDB while owners of private residential property must check approval from URA. These offices must be operational and accessible to the public during normal office hours, and will be used as official place to send all notices and official documents.
- Tax exemptions and incentives
For the first S$300,000 of annual profits, your company can pay no more than 8,5% tax. After that, there is flat rate tax of 17%. Singapore companies do not need to pay either pay capital gains or dividend taxes.
In the company registration, ACRA will ask you several documents containing information about your company such as:
- Company name
- Brief description of business activities (except for financial services related or other politically sensitive business, generally there are no restriction)
- Shareholders details
- Directors details
- Registered address
- Company secretary details
- Paid up capital amount
- Company constitution or Memorandum and Articles of Association (MAA). A model of standard MAA document is provided by Singapore Company Registrar. This is a legal document which consist of regulations on how a company will be internally governed, its structure, shareholder rights and relations, and other regulations of the company’s internal affairs.
If you are foreigners who want to set up or branching your company in Singapore, then you must be aware of the following conditions:
- Records of both directors and shareholders must be accessible for public.
- Foreigners are forbidden to self-register a company, you can ask help from corporate service provider to accompany you to do the company registration in Singapore.
- Foreigners can operate the company outside Singapore and just use visitor visa when having a short-term visit, but you must have minimum one local director living in Singapore. If you plan to operate it locally, you’ll need an Employment Pass or Entrepreneur Pass.
- When opening a bank account, particular bank needs your physical presence in Singapore.
The Step by step company registration guide in Singapore
The process of company registration and formation in Singapore is fully computerized and quick, which only require 1-2 days for a company to be incorporated. The applicant must register into BizFile+ at ACRA website by using his/her identification number and SingPass. If the applicant does not have SingPass, you may use the services of a registered filing agent such as law firm, accounting firm, or corporate secretarial firm.
Here are the step by step guide of company registration in Singapore:
Step 1 – Choosing a proper company name and address
First, you should submit the company name which can be approved by ACRA. The Company Registrar will notify you in less than an hour whether your name approved or rejected, but if your company name has certain words such as bank, finance, law, media, the notification may be come much longer because external Government Authority will be involved. If the name has been approved, your company can reserve the name for 60 days from the application date and can be extended for another 60 days.
Step 2 – Register the company
Once the company name approved, you can proceed to submit all the necessary documents as required on BizFile+. The registration fee for setting up private limited company is S$315. The company will be set up within 15 minutes, but in case of the application require a review for approval (such as for school) the process can take from 14 – 60 days. Delay also may occur if directors, shareholders, or foreign company are of a particular nationalities or countries, as there might be request for additional documentation.
Step 3 – Formalities post incorporation
After the company has been set up, your company will have the following documents:
- Certificate of Incorporation. Following the finished company registration process, you will be receiving an email from the Company Registrar consist of your Company Registration Number and information that you are already incorporated. This number is treated as the official Certificate of Incorporation in Singapore. You can have a hard copy of the certificate for a S$50 fee, with processing time of 3 to 5 days.
- Company Business Profile. You can have a business profile from ACRA which include particulars of the company by making a request online and pay the fee of S$16.50 on BizFIle+. The document can be downloaded in PDF format within an hour of the request.
The above two documents are necessary for all legal and contractual purposes for executing business activities in Singapore, such as opening corporate bank accounts, signing office lease, subscribing to telephone/internet services, etc.
Furthermore, your company should also have:
- Share Certificates for each shareholder (only for subsidiary)
- A company seal (only for subsidiary)
- A company rubber stamp
- A share register indicating shares allotted (only for subsidiary)
- Other legal documents such as employment agreement, non-disclosure agreement, distributor agreement, business referral agreement.
What you can do after completing the company registration & formation in Singapore
Following the company registration in Singapore, you may take notes of these things:
- Open a corporate bank account. There are many major banks you can choose in Singapore once you have done setting up your company. Please note that several banks need you physical presences when opening a new account.
- Annual filing. You must perform annual filling process according to the Companies Act in order to comply with regulations of doing business in Singapore.
- Take licenses and permission to operate your business. Certain businesses require special license to operate, this apply for restaurants, educational institutes, travel agencies, financial services, import/export of goods, and employment agency.
- Register Singapore Goods and Service Tax (GST). We are certainly hoping that your annual taxable revenue will be more than S$1million. In this case, you will require to register GST and you get to charge your costumers an additional 7% for tax. This surely must go to the Singapore Authorities.
- Register Central Provident Fund (CPF). Singapore has CPF pension fund scheme in which both employer and employee contribute a percentage of monthly salary to the fund as compulsion if they earn more than S$50 a month. For foreign employees, this is not required.