It is always exciting to establish a business, especially in a business-friendly country like Singapore. The prospects are high, with a corporate tax rate of up to 17%, zero capital gains tax, and partial tax exemptions for any newly incorporated companies.
Singapore is an extremely business-friendly nation with a simple and efficient registration procedure. Whether you are a local entrepreneur or a foreign investor, setting up your business here is less bureaucratic, making it one of the world’s leading destinations for entrepreneurs.
However, the incorporation process might be daunting if you do not know where to start. From name search to choosing the right business structure, you need to properly register your company to grant it credibility, safeguard assets, and easily attract investors.
The following is a step-by-step guide on what it takes to incorporate a company successfully.
1. Engage Professional Company Incorporation Services
One of the ideal ways of registering a company in Singapore is to hire the services of a professional firm that offers company incorporation services. This takes the hassle off you, as they will handle all your administrative and legal requirements.
Their services range from conducting a company name search to advising on a suitable business structure, preparing incorporation documents, and assisting with compliance with the local authorities.
Foreign entrepreneurs will find it beneficial to hire a professional services provider who will help navigate the legal bureaucracy faster. They will assist you with appointing a local director, opening a corporate bank account, and providing a registered office address.
2. Choose the Right Business Structure
The most common type of business in Singapore is a Private Limited Company (Pte Ltd), which offers liability protection and tax benefits. However, sole proprietorships or partnerships might suit smaller-scale businesses with lower compliance needs.
A Private Limited Company is a separate legal entity. Shareholders are not accountable for the business or the company’s debts beyond the share capital contributed. Moreover, Singapore has moderated its corporate tax rates as a pro-business nation.
For example, you can enjoy various tax incentives and exemptions with a Pte Ltd company. As the Inland Revenue Authority of Singapore (IRAS) outlines, any Singapore Exempt Private Limited companies enjoy legal tax exemptions for the first $100,000 of corporate profits within the first three years of incorporation.
3. Register Your Company Name
Your company name is its identity and an important step in incorporation. Before you register, the name must be unique and approved by ACRA. Singapore has very stringent naming guidelines, and names similar or identical to existing businesses will not be allowed.
To increase your chances of approval, ensure that the name you decide on is not obscene, purposefully misleading, or infringing upon trademarks. Performing a name availability search through ACRA’s BizFile+ system will help avoid hiccups.
Once approved, the name will be reserved for 120 days, so you can take your time settling all other administrative matters. Like any jurisdiction, a good and professional company name can contribute to your overall company profile and image as a serious business player.
4. Appoint Directors and Company Secretary
Every company in Singapore must have at least one director who is a Singapore citizen, permanent resident, or EntrePass/Employment Pass holder. Foreign entrepreneurs who don’t meet the criteria may be required to appoint a nominee director or obtain a proper work visa.
- Director: A director manages the company and ensures it meets its legal obligations. Ideally, you should have a director on board who understands Singapore’s corporate laws and can make strategic decisions.
- Company Secretary: Every company must appoint a secretary within 6 months of its incorporation date. A company secretary ensures the proper statutory administration of your business by maintaining records and handling certain statutory filings, such as annual returns and shareholder resolutions with ACRA.
5. Meeting Capital and Shareholding Requirements
There is no minimum capital required for company registration in Singapore. You can set up a company with a paid-up capital of as little as SGD 1. However, it is recommended that you have a decent amount of capital as a measure of credibility and for incurring business expenses.
You’ll also need to decide on the shareholding structure. A private limited company in Singapore can have up to 50 shareholders, individuals, or corporate entities. This structure allows you to distribute ownership more flexibly and makes it easier to attract investors.
For foreign investors who want to set up a company in Singapore, 100% foreign shareholding is allowed. However, some industries have specific regulatory requirements based on the nature of the business. You may want to check with a corporate service provider to see whether there are any such restrictions for your industry and how best to allocate shareholdings.
6. File for Incorporation and Open a Corporate Bank Account
With all the details, you can now file your incorporation application via ACRA’s BizFile+ portal. The process is relatively fast and can be completed on the same day, assuming you’ve got all your documents ready for submission. They typically include the company constitution, particulars of directors & shareholders, registered office address, and compliance statements.
After the company is registered, the next step is to open a corporate bank account. Several local and international banks in Singapore provide business-friendly banking facilities.
However, most require directors to physically open the account, except a few digital banks, which allow you to open accounts remotely. Having a corporate bank to manage your finances, ease of doing business, and compliance with local regulations is essential.
Final Thoughts
Incorporating a company is easy if you know what needs to be done. You should select the right kind of business entity, decide on the proposed name for your business, appoint key people, meet capital requirements, and file for incorporation with ACRA.
Following that, keeping good records, adhering to compliance requirements, and filing deadlines are important to keep your business in good legal standing.
Singapore is a highly attractive destination for business due to its pro-business environment. Whether you are a local entrepreneur or a foreign investor, engaging corporate service experts helps you start on the right footing and navigate the regulatory requirements easily.
