Located in the heart of South-East Asia, Singapore has managed to become one of the thriving economies in the world only in a few decades. Strategic location, business-friendly policies and blooming technologies have made the country an ideal launch platform for international investors with forward-looking business ideas. According to the annual report published by The World Bank, Singapore is ranked as the second best country for doing a business, and the sixth country with the most start-up friendly environment. Singapore offers an attractive tax system both to individuals and corporations.Personal income tax starts from 0% and can be up to 20% and corporate tax rate is from 9% to 17 % depending on the level of income. Bureaucratic obstacles for foreign investors are reduced to minimum and the protection of investments is guaranteed by pro-business government policies.
However, foreigners in Singapore can still find it difficult to identify the Singapore company registration procedures as well as the company structure which suits best their business needs.
Here is a complete guide that will help you learn the basic requirements for registering a new business entity in Singapore before embarking on your entrepreneurship journey in the Lion City.
Although there are many types of business structures in Singapore foreign entrepreneurs can consider only three options: registering a private limited company, a branch office or a representative office.
Registration of a Private Limited Company
A private limited company(Pte) is the most preferred type of legal entity in Singapore due to its high flexibility and scalability. It is a type of limited liability company in which the maximum number of shareholders is 50 persons. Pte is a legal entity separate and distinct from its directors/shareholders. It has a legal personality and has perpetual succession. The shareholders of a Pte can either be corporations or individuals or both.
Foreigners in Singapore Should Take Into Consideration:
- Singapore law does not allow foreign individuals to self-register an entity and therefore, they must engage a professional firm
- Workpass is required only if you plan to move to Singapore to oversee operations. Otherwise, you can manage the company from overseas and engage local resident director services
- Incorporation/workpass formalities, can be handled without your presence in Singapore
- Documents signed outside Singapore and original documents not sighted by us, must be signed/verified before Notary Public
- Non-English documents must be translated to English by official translator
Minimum Requirements For Registration
- 1 shareholder (individual or corporation
- 1 director (natural person residing in Singapore, not bankrupt, minimum 18 years old)
- 1 resident company secretary
- Minimum paid-up share capital is $1.00
- Certified copy of identification document of all shareholders/directors/ultimate beneficial owners
- For corporate shareholder, certified copy of Incorporation Certificate, Company Profile (or equivalent)
- Power of Attorney
- Address proof of all directors/shareholders (e.g. utility/credit-card bill not older than 3 months)
- Maintain local registered address
- Completed incorporation questionnaire/due diligence form/director particulars form
Registration Procedure and Timeline
There are two distinct steps involved in Singapore company registration; Company Name Reservation and Company Registration.
When choosing a name of the business entity the entrepreneur should take into consideration that using certain words can affect the duration of the name approval process. Words such as school, restaurant, law, media, bank, finance may delay the name approval as ACRA will have to involve the relevant Government Authorities in the process.
If documents are sent overseas for execution, the timeframe depends on the return of the duly executed documents to us.
The approved name will be reserved for 60 days.
- Limited Liability
- Ownership transfer is easyIncreased attractiveness (e.g. funding institutes prefer to lend money to companies)Competitive taxation- corporate tax is below 8.5% for profits up to S$300,000, capped at 17% for profits exceeding S$300,000
- Dividends are tax-exempt
- No capital gain tax
- No exchange controls/restrictions on profit repatriation
- Singapore’s double taxation treaties helps minimizing taxes
- Higher registration and administrative costs
- Stringent compliance requirements (ACRA/IRAS)
- Complicated winding-up process
- E-Notice from ACRA- confirming date of incorporation and Company Registration Number (hardcopy of Incorporation Certificate can be purchased from ACRA at S$50)
- Company Profile from ACRA containing key information of the newly incorporated company
- Company’s Constitution
Share certificates to initial subscribers
With above documents, you can proceed with other legal/contractual tasks to be performed here (opening bank account, leasing office, apply utilities/phone lines/internet accounts etc.).
Opening a Bank Account
Most banks require the directors/signatories to be present. Always bear in mind that you will have a wider choice of banks if you make an appearance in Singapore.
Applying Business Licenses
You may require license if you engage in certain businesses as:
- educational institutes
- travel agencies
- financial services
- import/export of goods employment agency
Goods and Service Tax (GST)
Register for GST if your annual company revenue is expected to exceed S$1 million.
- Hold first Board of Directors’ meeting within 6 months from incorporation
- Hold first Annual General Meeting (AGM) within 18 months from date of incorporation
- Subsequent AGMs, once every calendar year and within 15 months from last AGM
- Submit Annual Return to ACRA within 1 month from AGM
- Submit Estimated Chargeable Income within 3 months of financial year-end
- File Corporate Tax by November
- To explore viability of doing business/test the business environment before committing to any investment decisions.
- RO is an interim entity which is used to conduct market research, feasibility studies and liaison work on behalf of parent company.
- Conducting marketing/promotional activities for parent company (RO is permitted to activate a customs account for import/export of sample products and materials from parent company)
- Conduct market research /feasibility studies before deciding on permanent entity
- Conduct research on the demand for product/service; potential customers’ needs and price expectation (i.e. collect information about markets, competitors, customers)
- Supervise activities of its HQ
- Act as liaison office during negotiation deal
- Cultivate trade contacts, handle product enquiries, provide customer support
- Participate in exhibitions and trade shows
- Render direct/indirect revenue generating activities
- Enter/negotiate business contracts
- Provide any services/consultancy
- Ship or store goods without a designated local distributor or agent
- Lease warehousing facilities/lease out its office for a fee
- Issue invoices/receipts
- Open/receive credit letters
- Coordinate orders/activities/businesses between HQ and customers
- Provide support services to manage distributors / agents / representatives / customers
- Provide technical supervision, consultations, quality control checks, administrative support
It is mandatory to use professional firm to submit RO application with International Enterprise (IE) Singapore. New applications must meet the following criteria:
- Foreign parent company must have a sales turnover ≥ US$250,000
- Foreign parent company must be established for three years or more
- Proposed number of employees for the RO is five or below Required Registration Documents
- Completed application form
- Certified copy of parent company’s Incorporation Certificate
- Copy of parent company’s latest annual report/audited accounts
- Duly endorsed undertaking to abide by Terms/Conditions governing RO
- Non-refundable processing fee of S$200
Documents which are not originally in English must be translated to English by an official translator.
IE will issue a letter confirming registration of RO valid for 1 year and can be renewed annually for up to 3 years.
The support staff of a RO may be composed of local employees but the chief representative staff must be appointed and relocated to Singapore from the Company’s main HQs.
Filing Requirement Exemptions
Since RO is temporary entity, it is not required to keep legal documents or file tax return in Singapore.
RO must clearly demonstrate that it is a representative office registered in Singapore on its name plaque, namecards, communication materials, directory listings, signboards, notices etc.
Despite the advantages of a subsidiary company, large foreign corporations often prefer to operate Branch Office (BO). A BO is an extension of the foreign business company and is not considered a separate legal entity in Singapore. Although it can operate on its own in Singapore, its liabilities and legal obligations are always directed to the parent firm.
Documents for registration:
1. Certified copy of Incorporation Certificate (or equivalent);
2. Certified copy of Bye-laws (or equivalent);
3. Certified copy of list containing particulars of Directors in the parent company;
4. Copy of certificate of incumbency/company profile of parent company;
5. Certified copy of the parent company’s latest annual report/audited financial statements;
6. Memorandum executed by the parent company, stating the powers of Directors with respect to the administration of the BO;
7. Memorandum of appointment stating/authorizing the power of the local representative;
8. Memorandum of Appointment/Power of Attorney from the local authorized representative;
9. Registered Office Address;
10. Copy of identification card; and
11. Completed KYC form.
All non-English documents must be translated to English by official translator.
a. Name application/approval of name
b. Preparation of signing documents and execution
c. Lodgement with ACRA
Upon submission of the duly executed documents, ACRA will issue E-Notice of Registration.
Register of members of foreign companies
Foreign company must keep a register of its members at its registered office in Singapore.
Starting from 2010, income derived from Singapore or received in Singapore shall be taxed at 17%.
A BO is not considered as resident here and therefore, is not entitled to the benefit of Singapore’s double taxation treaties with other countries. Nevertheless, the losses incurred may be used to offset the profits of its head-office for tax purposes.
No exchange control approvals are required for inward investment into Singapore and the remittance of profits by the BO to its parent company.
Appointment of Agent
The foreign company must appoint at least one natural person resident in Singapore to act as its Agent in Singapore.
Have a registered office in Singapore, accessible to the public during ordinary business hours.
Annual Filing Requirements of BO
Foreign companies operating BO in Singapore are required by the Companies Act to submit the BO’s annual report/audited accounts within 7 months after the end of its financial year or 2 months after the parent company’s Annual General Meeting, whichever is earlier.
A yearly tax return must also be filed by the BO by November each year.