A properly structured private limited company is a very tax efficient corporate body; hence, this form is the most common type of business entity registered in Singapore.
Pre-Registration – What You Need to Know: Key facts about company formation
The name must be approved before incorporation of the Singapore company can occur.
A minimum of one resident director (a resident is defined as a Singapore Citizen, a Singaporean Permanent Resident, or a person who has been issued an Entrepass, Employment Pass, or Dependent Pass) is mandatory. There is no limit on the number of additional local or foreign directors a Singapore Company can appoint. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. There is no requirement for the directors to also be shareholders, i.e. non-shareholders can be appointed directors.
A Singapore private limited company can have a minimum of 1 and maximum of 50 shareholders. A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity such as another company or trust. 100% local or foreign shareholding is allowed. New shares can be issued or existing shares can be transferred to another person any time after the Singapore company has gone through the incorporation process.
As per Section 171 of the Singapore Companies Act, every company must appoint a qualified company secretary within 6 months of its incorporation. It has to be noted that in case of a sole director/shareholder, the same person cannot act as the company secretary. The company secretary must be a natural person who is ordinarily resident in Singapore.
Minimum paid-up capital for registration of a Singapore company is S$1. Paid-up capital (also known as share capital) can be increased anytime after the incorporation of the company. There is no concept of Authorized Capital for Singapore companies.
In order to register a Singapore company, you must provide a local Singapore address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address) and cannot be a P.O. Box.
Singapore registered companies enjoy very attractive tax exemptions and incentives. Your company pays less than 9% for the first S$300,000 annual profits and 17% flat after that. There are no capital gains or dividend taxes on Singapore companies. Excellent tax benefits and business reputation of Singapore are the key reasons why entrepreneurs from around the world prefer to form a company in Singapore. For further information on taxes, refer to the Singapore corporate tax guide.
Considerations for foreigners
Foreigners wishing to incorporate a Singapore company, must take into consideration the following points: You must engage a professional firm to register a Singapore company. Singapore law does not allow foreign individuals or entities to self-register a company. There is no requirement for you to obtain any special Singapore visa if you merely want to incorporate a private limited company but have no plans to relocate to Singapore. You are free to operate your company from overseas as well as free to visit Singapore on a visitor visa whenever required to attend to company matters on a short-term basis. But keep in mind that in such cases, you will need to find a local director since each company must have at least one local director.
Professional service firms offering Singapore incorporation services often offer the services of a nominee local resident director for this purpose. If you plan to relocate to Singapore to operate your company, you are required to obtain an Employment Pass or Entrepreneur Pass type of work pass. Once you have obtained your work permit, you can act as the local resident director of your company. All Singapore company incorporation formalities (as well as work permit formalities, if applicable) can be handled without you having to visit Singapore. The only exception may be opening a bank account, depending on the bank you choose.
For the purpose of company incorporation in Singapore, the following information is required by the ACRA:
Brief Description of Business Activities
Company Secretary Particulars
The incorporation service firm you engage will typically collect the following documents from you in order to prepare the necessary company incorporation paperwork:
For non-residents: Copy of passport, overseas residential address proof, and other Know-Your-Client (KYC) information such as a bank reference letter, personal and business profile, etc.
For Singapore residents: Copy of Singapore identity card
If the shareholder is a corporate entity: Copy of registration documents such as Certificate of Incorporation and Constitution.
Note that officially endorsed translated versions must be provided for any non-English documents.
Registration Procedure and Timeline
Company registration procedure in Singapore is fully computerized by the ACRA. As a result, the Singapore incorporation process is quick and efficient without any bureaucratic red-tape involved. Under normal circumstances, the company can be incorporated in 1-2 days. There are two distinct steps involved in the Singapore company setup procedure: a) Company Name Approval and; b) Company Registration. Both steps can be accomplished on the same day assuming there are no delays caused by the ACRA.
To set up a Singapore company, the proposed name for the company must be approved first. Company name approval is obtained by filing the application with the Accounting and Corporate Regulatory Authority (ACRA). The service firm you have chosen to register your company will do it for you as the first step in the incorporation process.
Generally the name approval/rejection notification comes through in less than an hour unless the proposed name has certain words (such as bank, finance, law, media, etc.) that might require the review and approval of a corresponding external government authority. If the name is referred to an external authority, the name approval may get delayed by a few days or weeks.
To improve your chances of quick name approval, make sure the name:
is not identical or too similar to any existing local company names
does not infringe with any trademarks
is not obscene or vulgar
is not already reserved
An approved name will be reserved for 60 days from the date of application. You can extend the name for another 60 days by filing an extension request just before the expiry date.
Once the name has been approved, the filing of the incorporation request as well as the approval from the ACRA can be completed in a few hours assuming incorporation documents are ready and have been signed by the directors and shareholders of the new company. There are cases when the incorporation procedure can get delayed if the shareholders or directors are of certain nationalities, although this happens in rare cases only. In such cases, the authorities might ask for additional information. A registration fee of S$300 is payable to the ACRA at the time of incorporating a private limited liability company.
Post-Registration Formalities: Documents Issued
Certificate of Incorporation
The ACRA will send an official email notification confirming the incorporation of the company. The email notification includes the company registration number and is treated as the official certificate of incorporation in Singapore. A hard copy of the certification of incorporation is no longer issued by default as it is not needed in Singapore. However, if you do prefer a hard copy, an online request can be made to the ACRA after the incorporation of the Singapore company. A fee of approximately S$50 is applicable and the hard copy can be collected the next day from the office of the ACRA.
Company Business Profile
A business profile containing the particulars of the company can be obtained from the ACRA by making a request online and paying a nominal application fee. Generally, the document (a PDF file) is available for download within an hour of the request and contains the following key details:
Company name and registration number
Previous names for the company, if any
Registered office address
Company Secretary details
The above two soft documents (i.e. email notification of incorporation and company business profile) are sufficient in Singapore for all legal and contractual purposes including opening of corporate bank accounts, signing office lease, subscribing to telephone/internet services, etc. Some of the other items you will almost certainly need upon registration of your Singapore company include:
Share certificates for each of the shareholders
Share register indicating shares allotted to each of the shareholders
Company seal for the company
A rubber stamp for the company
Opening a Corporate Bank Account
After successful registration of your Singapore company, you can open a corporate bank account in any of the major banks in Singapore such as HSBC, Standard Chartered, Citibank, DBS, OCBC, UOB, etc. Many of the banks in Singapore these days require physical presence of the company principals as part of the account opening procedure. You should consider the following:
If you are unable to visit Singapore, you should choose a bank that allows opening of the corporate bank account without your visit to Singapore.
If you are able to visit Singapore, you have a wider choice of banks to choose from. In this case, you can explore the features and facilities provided by different banks and decide on the bank that best suits your needs.
Applying for Business Licenses
Depending on your company’s business activities, you may need to obtain one or more business licenses after you have incorporated your company but before you can commence your business operations. Fortunately, very few business activities require such a license. Examples of business activities that require a business license(s) include restaurants, educational institutes, travel agencies, financial services, import/export of goods, etc.
Goods and Service Tax (GST) registration
If the projected annual revenue of your company exceeds SGD 1 million, your company must register for GST. GST is also known as Value Added Tax (VAT) or Sales Tax in many other countries. If your company is GST registered, you will need to charge this tax (currently 7%) to your clients on the goods and services provided and in turn remit this amount to the tax authorities. GST registration is not mandatory if your company’s annual turnover does not exceed S$1 million.
Annual Filing Requirements
Once your Singapore company has been incorporated, the Singapore Companies Act mandates certain annual filing requirements and formalities.