Company Registration in Singapore- An Overview
Singapore is an island nation located in Southeast Asia. It is rich in culture and heritage and has been a hub for corporate investments for a long time. Recognised as an "Asian tiger," this country is on the list of top-growing economies in Asia. Corporate-friendly schemes and digital enhancements make Singapore an attractive place for foreign investors. Singapore's strategic location in Southeast Asia makes a trade, foreign exchange, and export-import easier for this island nation. It has one of the most welcoming investments and trade policies. It also offers tax exemptions to start-ups and assists them with various schemes in their initial days. It can be a complex task for foreigners to set up a new Singapore company alone. Therefore, we at Enterslice can guide you through the entire process and help secure company registration.
Regulatory Authority/ Body for Company Registration in Singapore
The primary regulatory authority for company registration in Singapore is the Accountability and Corporate Regulatory Authority (ACRA). It is responsible for regulating the business entities, public accounts and corporate service providers in Singapore.
Why should you register your company in Singapore?
There are a variety of reasons why you should register your company in Singapore. Some of the key reasons have been discussed below:
- Robust economy
Singapore boasts a well-developed free market economy based on trade, finance and manufacturing. The country has grown and developed at a reasonable rate. It has judiciously used its resources, resulting in a robust economy. Considering this, many business owners have established their businesses in Singapore.
- Attractive taxation system
Singapore also has a straightforward and rational tax system. No tax is imposed on capital gains or dividends obtained from a business which makes the country lucrative for entrepreneurs who wish to register a new business. Regarding corporate tax rates, Singapore has created an appealing tax structure with corporate tax rates ranging from 0% to 17%, which is relatively low compared to other developed countries.
- Double Taxation Avoidance
Singapore has a double taxation avoidance agreement with more than 50 countries. Double taxation avoidance agreements ensure that the transaction between Singapore and the treaty country doesn't include double taxation. Singapore also provides Unilateral tax credits in case of countries with those countries with which it doesn't have any such agreement.
- 100% Foreign Ownership
Singapore permits a foreigner to own 100% of the company's stock incorporated in Singapore. Here, any local partners or shareholders will not be required. There are also no restrictions on the amount of capital one can bring in from their home country to invest in the Singapore Company.
- Seamless Incorporation and Operation
The manner of Singapore Company registration is simple and straightforward. It is devoid of any complex paperwork.
- Pro-start-up environment
The Singapore authorities have adopted growth and innovation-friendly policies for start-ups, extending various tax incentives, in-kind assistance schemes to start-ups, etc. The benefits have been granted to both local as well as foreign-owned entities.
- World-class infrastructure
Singapore has world-class infrastructure facilities, which is a boon for businesses there. The world-class infrastructure has also helped in improving the productivity of companies.
Types of Business Structures in Singapore- Company Registration in Singapore
There are three major types of business structures in Singapore. These include:
- Sole proprietorship
- Branch office, Representative Office, Subsidiary of a foreign company.
- Sole Proprietorship
The businesses involving minimal risk and small-scale businesses adopt the business vehicle of Sole Proprietorship in Singapore. As the name suggests, these businesses are run by an individual. There is single-person ownership where the company is not a separate legal entity. The property purchased for business purposes is purchased in the owner's name under his capacity. This makes the business owner liable for all the debts and liabilities related to the business.
Businesses where more than two persons are involved in generating profits through their commercial activities usually fall under the ambit of a partnership. There are different kinds of partnerships in Singapore.
- General Partnership: a general partnership comprises a minimum of two partners and a maximum of 20 partners to carry out the profit-generating activities. This vehicle of the general partnership is not a separate legal entity distinct from its partners. Hence, all the properties purchased in furtherance of the partnership affairs are not owned in the name of the partnership. All the partners of the general partnership have unlimited liability against the debts and obligations of the general partnership. The one-time registration fee for general partnership is $115, and $175 for three-year registration.
- Limited Partnership: A limited partnership comprises a minimum of one general partner with unlimited liability and a minimum of 1 limited partner whose liability is fixed to the amount of capital infused in the partnership. No upper limit on the number of members in a limited partnership. A limited partnership structure is usually adopted for the business of professional services such as accounting firms, lawyers, etc.
- Limited Liability Partnership: A limited liability partnership (LLP) offers the flexibility of a partnership and limited liability of a company. Unlike other kinds of partnerships, an LLP has a separate legal personality distinct from its partners. Every LLP must have at least two partners, and these partners can be natural persons, corporations, partnerships or other LLPs. Every LLP is also required to appoint a manager who must be a resident of Singapore.
A company is the most sought-after business vehicle adopted by foreign investors for expanding their business in Singapore. It has a separate legal entity and its members' liability extends to the amount of their contribution made to the company. Companies in Singapore are further sub-divided into the following:
- Exempt Private Company: An exempt private company is a private limited company that has been exempted from fulfilling certain compliances, such as the attachment of annual financial statements in their annual returns. They enjoy a certain level of autonomy in extending loans to their directors compared to other private companies. These companies need to add ‘Pte Ltd.’ with their names. These companies can have a maximum of 20 shareholders, and these shareholders do not include a corporation.
- Private company limited by shares: A private company limited by shares has a share capital. The maximum number of shareholders in a private company can extend to 50, and such shareholders can also include corporations. Here, the liability of the members is limited to the amount of capital invested in the company.
- Public Company Limited by shares: A PLC can raise capital from the public by offering its shares and debentures. For making such an offer, the company has to register the prospectus with Monetary Authority of Singapore and has been permitted to have more than 50 shareholders. These companies are required to attach 'Ltd.' with their names. Here, the liability of the members of the company is limited to the amount of capital invested by them in the company.
- Public Company Limited by guarantee: These kinds of companies are usually incorporated for non-profit and charitable objectives such as national and public interests, trade associations, charitable organisations etc. These companies, too, need to attach 'Ltd.' with their names. These companies do not have any share capital, and their liability extends to the guaranteed amount promised to be contributed in the company's assets. This guaranteed amount shall be specified in the company's constitution as well.
- Unlimited Private Company: An unlimited private company is a hybrid company with or without share capital. The liability of its members or shareholders is not limited; it also extends to personal assets. The members have joint and several non-limited liabilities. These companies are required to attach 'Unlimited' with their names.
- Unlimited Exempt Private Company: An unlimited exempt private company has a similar structure. The only difference is that the members have unlimited liability.
- Unlimited Public Company:An unlimited public company is one where the liability of the members is unlimited against the company's debts and obligations. These companies, too, need to attach 'unlimited' with their names.
A subsidiary is an extension of its parent company having a separate legal identity from it. However, it is managed by its board of directors. It has been allowed to use a different name. The activities of a subsidiary can be the same or different from that of its parent company. It is taxed as a local entity and can avail of all the benefits available. It needs to have at least one local manager resident in Singapore. The minimum share capital required to open a subsidiary in Singapore is $1.
- Branch Office-
A branch office is an extension of its parent company. It is not a separate legal entity as it is an extension of the activities carried out by the parent company. This entity survives in perpetuity. Its activities are taxed as a non-resident entity. The account of the branch office and that of its parent company have to be filed. The minimum capital required for a branch office is $1. A branch office should have at least one manager/local representative resident in Singapore.
- Representative Office-
A representative office is an interim entity that has been used for representing the parent company in the Singapore market for market research purposes and liaison work for the parent company. To establish a representative office in Singapore, the parent company must be in business for at least a period of three years and have a turnover above $250,000. It is not a separate legal entity and is a temporary office for administrative purposes. Its name cannot be changed. It will bear the name of its parent company with the addition of a 'representative office'. It can only undertake market research and coordination activities. A chief representative must be appointed who will relocate from the parent company. The minimum capital required for opening a representative office is $1.
Documents for Company Registration in Singapore
The following documents are required for company registration in Singapore:
- Name Reservation with the ACRA
- Description of the services to be offered by the company
- The registered address of the company in Singapore
- Details of the shareholders, directors and secretary
- Copy of the passport of the foreigners
- Residential address proof of the foreigners
- Singapore residents are required to submit their Singapore ID.
- Articles of Association and Memorandum of Associations of the company.
Checklist for Company Registration in Singapore
The following Checklist must be taken into consideration before beginning the process of company registration in Singapore:
- Choosing the name for the company
The first step in the registration of a company is choosing an appropriate name for the company. The desired name is submitted to the ACRA's online portal, BizFile. The availability of the chosen name is checked at this portal, and only then can the name be reserved for the company. The applicant is also required to select and specify the SSIC Code (Singapore Standard Industrial Classification code) depending on the type of commercial activities sought to be undertaken by the applicant.
After obtaining the approval for the desired name, the applicant can proceed further to register the company. The company should be registered within 120 days from the date of reserving the name for the company, else the name shall not remain reserved thereafter.
- Deciding the type and structure of the company
The applicant has to decide which of the following entities would be most suitable according to the needs and requirements of the activities he wishes to undertake through a company:
- Exempt Private Company
- Unlimited Exempt Private Company
- Private Company Limited by shares
- Public Company Limited by shares
- Public Company Limited by guarantee
- Unlimited Private Company.
- Unlimited Public Company
- Deciding the Financial year end (FYE) for the company
Deciding the financial year end in Singapore is very important because it determines the corporate filings and taxes that are due to the company every year. Additionally, the private companies are required to hold their AGM within a period of 6 months after FYE and file their annual returns within 7 months of FYE. In Singapore, the financial year end for a company can be an accounting period of either 12 months or 52 weeks.
The most preferred choices for FYE adopted by the private companies include 31st March, 30th June, 30th September and 31st December.
- Appointment of Important personnel for the company
Every company in Singapore has to appoint certain important personnel/officers. At least one director and company secretary must be appointed. These officers should be natural persons and should be residents in Singapore. Further, an auditor is also supposed to be appointed within 3 months, except for those companies that have been exempted under the law. The company has the option to appoint a person as a CEO to manage and oversee the company's business. If the company exercises the opportunity to appoint a CEO, it must file the personal particulars of the CEO with the ACRA. Similarly, the position to fill the position of a Managing Director is also optional. Before submitting the application for incorporation of the company, the following details of the appointed officers of the company are required:
- NRIC and full names
- Contact information (both email address and telephone numbers)
- Residential Address
After the application for incorporation of the company has been submitted, these officers have to endorse their appointments via BizFile.
- Deciding the share capital for the company in Singapore
Share capital refers to the amount of money the shareholders have committed to the company. Share capital can be issued with or without full payment of the share capital. The minimum issued share capital is $1 at the time of incorporation of the company.
- Deciding the Registered official address of the company
The applicant is also required to decide and submit the company's registered office address. This is the address where all the official communications and notices with the government department shall take place. This is the place where all the records and official registers of the company shall be kept. The companies must keep the office open for at least three hours during the business hours on each business day except for Saturdays, Sundays and Public holidays. The registered office address of the company must be located in Singapore. However, business operations can be conducted from different locations also.
- Copy of Constitution of the company
The company is also obligated to submit a copy of the company’s constitution spelling out the rules and regulations governing the company. It also lists down the rights and responsibilities of the directors, shareholders, secretaries etc., of the company, registered official address, activities undertaken by the company, liabilities of the members, share capital etc.
A copy of the company's constitution must be submitted to the ACRA at the time of incorporation, and a copy of the constitution signed by the company's shareholders should always be kept at the company's registered office address.
- Submission of the application for incorporation
The application must be submitted online via the BizFile+ portal. Once the application gets approved, an email is sent to the appointed officer holders of the company to receive their endorsement. These appointed officers are required to endorse their application within a period of 50 days from the date of receiving the email.
The fee for name reservation for the company is $15, and for incorporation of the company, the fee is $300.
Post incorporation requirements
Following are the post-incorporation requirements for every company registered in Singapore:
- Setting up a Corppass Account
On incorporation of the company, the directors must visit the website of Corppass and set up and start managing the Corppass account. This account gives the company its digital identity to transact with government agencies. The account provides necessary access for the selected employees of the company to transact with ACRA on the company's account.
- Creation of Business Profile
After incorporation of the company, every company receives a free Business profile from ACRA. This profile is an electronic report containing information about the company. The person who applies to the company has to download the free Business profile used by potential customers, business partners and suppliers for background checks, generating credibility for the business.
- Option of registration of alternate business address
In order to maintain transparency about the persons running the company and to generate the confidence of the stakeholders in the company's officers, some of their information, such as their identification number, residential address, and date of appointment, is available in the ACRAs public records. Suppose the company officers do not wish to reveal their real residential address. In that case, they can avail themselves of the option of registering an alternate residential address on payment of an additional $40. This address should be one where the company officer can be contacted and located within the same jurisdiction as the residential address.
- Maintaining the company registers.
The companies have to maintain the following company registers up-to-date for the people in the following roles:
- Controllers/ beneficial owners
ACRA maintains these registers in electronic format. When changes are made in the form, the registers have to be updated within 14 days in the BizFile from the date of such change.
In the following cases, the directors of the company have the responsibility to keep the ACRA updated if any changes take place:
- Change in the company’s address and operating hours
- The new appointment of directors, CEO, company secretary and auditor
- Change in the company’s activities
- When the directors, company secretary, auditor and CEO discontinue their services
- Changes in the information related to the directors, CEO, company secretary and auditor
- Changes in the information of the shareholders
- Allotment of new shares
- Transfer of shares among shareholders