Company Registration in Singapore

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Company Formation in Singapore

Singapore is ranked No. 2 in the world by the World Bank and is considered as one of the best places for setting up a company and doing business, due to its ease in policies and comparatively less taxes and work legislations. Singapore consistently ranks as one of the best places in the world for maintaining and operating a business.

In Singapore no foreign individuals are allowed to register companies in their own names. To promote business in the residents only locals are allowed to register companies on meeting certain requirements as required by the Company Registrar of Singapore. These matters are looked after by Accounting & Corporate Regulatory Authority (ACRA).

We will provide you the knowledge here on how to register a company and maintain or operate business along with secretarial compliances required in Singapore by following the below mentioned guidelines.

Business Structure

In order to register a business in Singapore, the basic need is choosing the right business structure. In order to decide, a person should keep in mind the following points, which can have major impacts on business.

  • Whether you are a citizen of Singapore or not
  • Tax Structure
  • Initial business setup and administrative costs
  • Vision and mission of business including plans
  • Product or service offering
  • Capital investment in case of Sole Proprietorship Corporation
  • No of partners in case of Limited Liability partnership
  • Investors in case of Private Limited Company (PTE LTD)

Types of business structures operating in Singapore are further explained as follows:

Sole Proprietorship Corporation

  • It has benefits like Affordability
  • It is not considered as a separate legal identity, so no protection against personal assets
  • It can be owned by Singapore citizens. Foreigners needs to appoint a local manager
  • It does not require audited financial statements.

Limited Liability Partnerships (LLP)

  • It has benefits like Affordability + limited liabilities (protection)
  • It is Considered a separate legal identity, but the tax rates are higher than private limited corporation
  • It can be owned by Singapore citizens. Foreigners needs to appoint a local manager
  • It does not require audited financial statements.

Private Limited Corporation (PTE LTD)

  • It has benefits like Tax exemptions – ($0 – $100,000 taxed at 4.25%, next $100,000 taxed at 8.5% for the first three years of business)
  • It is considered a separate legal identity, but attracts compliance obligations like annual general meetings, extra-ordinary general meetings, etc.
  • It can be owned entirely by a local. In case of foreigner holding, there should be at least one resident director.
  • Exemption to audited accounts is granted if they fall under the category of small company.

After briefly analyzing the business types, its structure and suitability and making the right decision, the next step is the most important, which is registering of a company.

Requirements for Registering a Company in Singapore

Following are the basic requirements for registering a company is Singapore.

  • Name of the company
  • At Least $1 of Issued Capital
  • A Detailed Company Constitution
  • A Local Address in Singapore (Physical or Virtual Office Address)
  • Should Have At Least One Director
  • At Least One local or Foreign Shareholder
  • A local resident Company Secretary
  • Auditor should be appointed

A detailed description of all requirements is briefly explained below:

  • Name of the company: Business name or company name are generally kept unique. It is advised to keep the name unique, so it could differ from other existing businesses. It is also advised that it should not contain any vulgar or offensive words or words prohibited by the Ministry of Finance, Singapore.
  • Share Capital – The issued capital should be at least $1. There is no minimum paid-up capital required, but disclosure of the amount paid by shareholders for purchase of their share is required.
  • Company Constitution – Company constitution is a legal document, which includes the general rules, the operation the company will carry out, rights and responsibilities of management, directors and other key persons including shareholders. The company needs to produce this document when applying for registration.
  • Registered Office Address –the place of business, where the company will carry out business needs to be disclosed. It can be a local address in Singapore, where all communications can be made and the records of the company are kept. There are no restrictions with regards to address; it could be either residential or commercial and easily accessible.
  • Director: It is required that there should be at least one local resident director on board. Here local resident can be defined as a person who holds Singaporean citizenship, or is a permanent resident, or hold EntrePass. Foreigners not prohibited by any other statute are also eligible to conduct business after obtaining official consent from Ministry of manpower, Singapore.
  • Shareholders – It is required that there should be at least one shareholder to a maximum of fifty shareholders. These shareholders can be categorized as individuals or other companies; they could be resident or foreigner.
  • Company Secretary – A company secretary is a person who looks after the secretarial matters of the company and should be appointed within the six months of its incorporation. There is a condition that a director and the company secretary cannot be the same person in case of a sole director company and should be a natural and local resident of Singapore.
  • Auditor – All companies are required to appoint an auditor other than a few small companies exempted from audit. An auditor must be appointed within three months from the date of company incorporation.

Foreigners Registering a Business in Singapore

Following are the requirements for foreigners who are willing to operate business and set up a company in Singapore:

  • The basic requirement for a foreigner is to employ a local resident of Singapore as a director.
  • Foreigners cannot submit an application to register a company on their own; they may obtain professional services from accounting firms, who then files application online on their behalf.

Reserving a Business Name and Registration

The name registering application is filed through online portal of ACRA knows as BizFile. The application fee is scheduled at $15.

The business application name, if approved, will be reserved for next 120 days. The name reserved is required to be registered within the time provided or the reservation will be cancelled.

General, business name applied is approved within an hour. Different business sectors have different regulatory authorities, who conduct the process of reviewing the application. These regulatory authorities take 14 and 60 days to process the application. For instance, educational institutes, law firms, financial institutions, etc.

Documents Required for Company Registration

Following documents are required before registering a company:

  • Name of the company duly approved by Accounting & Corporate Regulatory Authority
  • Company Constitution which indicates the principle activities and the mode the business will be carrying out, rights and responsibilities of management, shareholders and other key personnel, rules and regulations of governance.
  • Details and particulars of company secretary, directors and existing shareholders
  • A copy of identity card of directors, company secretary and existing shareholders in case of local residents.
  • For foreigners, copy of passports, proof of address and KYC forms are required.
  • Evidence and copy of the company’s registered address.
  • Memorandum and Articles of Association (MAA) from the Company Registrar.

Registering The Company in Singapore

When the required documents are complete, the application for registering a company is submitted through business filing portal of ACRA knows as BizFile. The fee for registering a company is set at $300. There are multiple payment options available for payment of fee. A duly signed consent is required from the company secretary, shareholders and all the company’s directors within a period of 120 days after the approval of application.

Taking professional services of a corporate secretarial firm or an accounting firm in Singapore is advised for smooth and successful completion of application.

Documents On Successful Registration

Following are the documents which are received by the company from ACRA upon successful registration.

  • Certificate of Incorporation: This certificate is issued in the name of Company. It contains a unique company registration number and is a proof of registration and is used against a lot of corporate needs in Singapore. This certificate is generally received as an email, but can also be obtained in person by requesting and paying a fee of $50.
  • Company Business Profile: This profile contains many of the key details of the company which includes names, registration number, date of incorporation, details of shareholders, directors and company secretary, registered company address, paid-up capital and principle business activities.

Secretarial Formalities Post Registration in Singapore

Singapore’s Corporate Regulation Compliances: All registered companies need to comply with the requirements from time to time as required by the governing authorities. Some of the common compliances required are briefly explained below. It is advised to obtain professional services of a corporate secretarial firm or an accounting firm, so the requirement could be made within the deadlines as failing to do so could attract serious repercussions.

Company’s Financial Year: All registered companies are required to determine financial year. A financial year can begin from any month within the year.

Annual/ Extra Ordinary General Meetings: All registered companies are required to conduct Annual General Meeting, so that the shareholders can examine the performance of the company and may approve the financial statements and other necessary acts.

Filing of Annual Returns: All registered companies are required to file Annual Returns, one month after conducting of Annual General Meeting

Filing of Annual Financial Statements – All registered companies are required to file Annual Financial Statements after conducting of Annual General Meeting and also maintain books of accounts

Filing of Corporate Tax – All registered companies are required to file Annual Corporate Tax Returns as and when due, this could in any of the required medium, paper or e-filing.

Share Certificates – All registered companies are required to issue share certificates to the shareholders of the company, which acts as a proof of their ownership.

Business License – All registered companies are required to obtain business licenses, which are then required by various authorities as permits of doing business. Some special permits depend on the nature of business. For instance, travel agencies, financial institutions, import and export of goods and services, restaurants, educational institutes, etc.

Open a Corporate Bank Account – All registered companies are required to open a corporate bank account.