Incorporation Guide for setting up Singapore companies
VentureHaven has compiled the following Incorporation Guide to help you understand the business registration process in Singapore.
A well-chosen business name differentiates your products or services from others in the same industry. Its memorability also improves customer retention and recall rate, giving your businessan edge over your competitors who are deciding between similar product or service providers.
Before you can register for a new company, you are required to submit a name application to ACRA for approval. Avoid selecting names which are:
- Identical to an existing business (especially within the same industry)
- Undesirable names that are deemed vulgar, obscene or offensive
- Prohibited by order of the Minister for Finance
For it will most likely be disapproved by ACRA, and consequently delays your business incorporation process. You are also required to specify the primary and secondary activities of your business when you submit your proposed business name to ACRA for approval.
Once your name application has been approved, your selected business name will be reserved for 120 days. The name will be made aavailable again to other members of the public if you fail to complete the incorporation within 120 days.
- An ACRA-approved Company Name
- The appointment of a minimum of one Resident Director. Requirements for a resident or non-resident company director include:
- At least 18 years old;
- Of full legal capacity;
- A Singapore Citizen, Singapore Permanent Resident or EntrePass holder.
- A director may also be an Employment Pass (EP) holder. However, a EP holder wishing to become the director of a must first get a Letter of Consent (LOC) from the Ministry of Manpower.
- Cannot be disqualified from acting as a director of a company e.g. an undischarged bankrupt.
- 1-50 Shareholders are permitted, which may or may not be directors. Shareholders can consist of both local and non-local individuals or companies, and 100% non-local shareholding is allowed in Singapore.
- A qualified Resident Company Secretary must be appointed within 6 months post-incorporation of your Singapore Business. Sole directors and/or shareholders cannot act as the company secretary.
- A minimum of S$1 worth of Paid-up Capital (aka share capital) is required to register a Singapore company. Adjustment to this amount can be made any time post-incorporation.
- The Registered Address of your company must be a local, physical Singapore address, which can be a residential or commercial address, but not a P.O. Box.
Your Business Structure (legal entity) can affect:
- your personal liability
- your loan application
- your future business expansion
- the taxes you need to pay
- the image of your company
- the type of compliance paperwork
Singapore Private Limited Company
A Singapore Private Limited Company is a business entity whose memorandum of association and articles of association limit the right of members to transfer share ownership in the company and whose membership is restricted to a maximum of 50. Unlike Partnerships and Sole Proprietorships, a private limited company is a legal entity separate from that of its shareholders/members. This means in Singapore company registration, each shareholder’s liability is restricted to their share capital. Singapore incorporation takes place under the provisions of Singapore’s Companies Act Cap 50.
Limited Liability Partnership
Like the name suggests, a Singapore Limited Liability Partnership (LLP) blends the characteristics of a partnership and a limited liability company. An LLP is a type of business entity that gives its owners the flexibility of a partnership as well as a separate legal identity (distinct from its partners) similar to that of a limited liability company.
A Singapore LLP can therefore own assets and be sued or sue. However, an LLP does not have shareholders, directors or a company secretary – the partners own and operate the business. It must have at least 2 partners.
Whereas in theory there is no restriction on the types of businesses that can be registered as a Singapore LLP, an LLP is most attractive for certain types of professionals e.g. accountants and lawyers.
Singapore Sole Proprietorship
A Singapore Sole Proprietorship is the simplest business entity that one can set up. It is a business with a single owner. Note however that a Singapore Sole Proprietorship is not considered a legal entity distinct from its owner. As such it cannot be sued in its name nor can it own or hold property. Instead, the owner and his/her personal assets bear personal responsibility for business’ risks and liabilities. Any profits generated by the business are taxed under Singapore’s personal income tax regime.
The following information / documents are required (in English) during the new business incorporation process:
- Company Name
- Description of Primary & Secondary Business Activities
- Particulars of Shareholder/s
- Particulars of Director/s
- Locally Registered Address (not a P.O Box)
- Particulars of Company Secretary (within 6 months post-incorporation)
- Company Constitution
- For Non-residents: Copy of passport, proof of overseas residential address; in addition, information such as bank reference letters, personal and business profiles, etc.
- For Singapore Residents: Copy of Singapore identity card
- For Corporate Entity Shareholder/: Copy of registration documents, for example Certificate of Incorporation and Constitution
5 main reasons why it would be desirable to start your business in Singapore
1. Business-friendly Taxes
With a single–tier corporate income tax system,Singapore offers the lowest effective tax rates in the world for business operators. Taxes paid by companies on their chargeable incomes are the last tax paid since all dividends distributed to shareholders are tax exempted.
2. Ease of Capital Access
Commercial banks in Singapore are very mature and provide small business owners with numerous financing options in product offerings and international reach. Therefore, affordable and quality trade financing, risk management and insurance services have become readily available in the country. Singapore is guided by various government bodies such as International Enterprise and the Monetary Authority of Singapore, fostering international finance along with financial services supervision and stability.
3. Excellent Infrastructure & Strategic Location
Strategically located along Asian trading routes, Singapore taps on demand from 600 million within the economic region of ASEAN. Its port and airport provide unparalleled connectivity that benefit both passengers and cargoes.
4. Supportive Business Policies by the Government
The government takes an active stance in supporting budding small businesses with various subsidies and grants. The labor regulations in Singapore are among the world’s most conducive in business.
5. Quality Talent & Cosmopolitan City
47% of the local workforce have received a tertiary education, which would certainly be a boost to any business operation. Due to the high number of well-trained professionals available, Singapore stands out as a global business hub for companies looking to expand overseas. As the most livable city in Asia for 16 years and running, Singapore, voted most livable city in Asia for 16 years, continues to be a top destination for expatriates. The city is safe and orderly, with excellent transport systems and leading healthcare facilities.