The boost in the national economy comes with foreign investment. Hence, it becomes imperative for a nation to become global hub to attract such investments. Singapore has embraced innovation and investment to rank high in the list of countries promoting ease of doing business. This guide is for all foreigners who want to embark entrepreneurial journey in Singapore.
- Available legal structures options: One can opt legal structures such as sole proprietorship, partnership, limited liability partnership (LLP) & company. While first three are quick and convenient structures, the latter one is time consuming as compared. However, the scope of expansion and growth are high in companies because company is an independent entity. If the scale of business is low to medium, then the entrant should start with proprietorship or partnership and then expand to registering a company basis the performance graph. One may evaluate pros and cons including the tax exemptions and cost to open a company in Singapore to make an entry decision.
- Conditions around being physically present: It is the best-case scenario if the entrepreneur is physically present, however, as mentioned Singapore entrepreneurial ministry is supportive of investment. Hence, even if the proprietor/ partners are not physically present, then one can authorize a representative who is a resident of Singapore who can entail responsibility for operations. S/he can be Singapore citizen, Permanent resident, or holder of EntrePass. In the case of registered company, at least one board of director should be resident of Singapore. The company can be opened in form of a branch or representative office or a subsidiary also.
- Shareholders & Company Secretary: As directed by Singapore Companies Act (Section 171), company needs to have at least one shareholder and 100% foreign ownership is allowed. Further, one company secretary also needs to be appointed within six months of incorporation. CS of the company needs to be a permanent resident of the country. Usually, company appoints CS at the time of incorporation as s/he can assist in legal requirements of incorporation. CS should be an independent individual who is free from influences of director and shareholder.
- Paid up Capital: The requirement of minimum paid-up capital is SGD 1 to setup a new private limited company. However, since the net worth of the company is determined by its investment and capital, it is recommended to have a higher capital i.e., SGD 100,000. It is also necessary for companies which are interested to apply for specific government projects.
- Registered office in Singapore: Company needs to have a correspondence address of registered office in Singapore. Finding a space can be major component of initial investment, hence you should research and select economical package of how much to set up a company in Singapore.
- Tax exemption: Singapore being an investment-friendly country offers tax havens to newly incorporated companies. This includes tax exemption which can go up to 75% for companies. These tax exemptions reduce cost to open a company in Singapore and make it a competitive option for investor for global expansion.