Sooner or later every successful entrepreneur thinks about opening a representative office abroad. Singapore is one of those few countries where it is relatively easy for foreigners to register a business and get the opportunity to save significantly on taxes.
Often this city-state is compared to Hong Kong, the international financial centre and Singapore’s eternal rival. Such analogies will be inevitable, because both jurisdictions are compact, located in Southeast Asia and provide foreign entrepreneurs with favourable working conditions.
However, Singapore has one key advantage — it is a completely independent state, not an autonomy within a large country. Having registered your company on Singaporean soil, you will quietly develop your business step by step. You will not have to wait anxiously for the end of the “transition period” and the complete change of laws governing corporate taxation and business activities.
Since the priority task of any commercial company is to make profit, a country with a lenient tax regime is chosen for its registration. For international business, Singapore is convenient because it offers almost the same opportunities for tax optimisation as classic offshore zones, but at the same time it has a good business reputation and is not included in blacklists of international organisations against laundering of illegal proceeds.
With the support of knowledgeable professionals, you can incorporate a company in Singapore in record time. The actual business incorporation process takes no more than 7 working days. Moreover, some types of Singapore businesses are opened online, i.e. without the need to come to the country.
Singapore allows the use of nominee service when the real beneficiaries of a start-up business do not want to place their personal data in the public domain.
Singapore is among the most business-friendly countries. The local government is interested in business development, so it does not hinder the development of small private companies with frequent visits from inspection bodies and huge reporting. Some start-up businessmen even receive active state support. And the most promising projects can always find investors for their development in Singapore.
Foreign entrepreneurs who plan to work not only overseas but also directly in Singapore itself have the option of moving to the country with their family. This requires your firm to have a physical presence in the country, ie:
In this case, a foreign businessman first applies for a long-term business visa, and after a few more years of residence, receives a permanent residence permit and Singapore citizenship.
Generally, overseas businessmen in Singapore use legal forms of organisation such as:
The great popularity of Singapore EPCs among foreign businessmen is due to the fact that:
Singapore exempted companies are subject to 3 restrictions:
The founders of such a company are liable for its debts only to the extent of their contribution to the authorised capital. The shareholders of a private LTD can be both individuals and legal entities. The total number of such founders should not be more than 50. Private limited liability companies issue only registered shares.
The shareholders of a public company are only liable for the results of its activities up to the amount that constitutes the market value of their shares. The shares of such business structures can be freely traded on the stock market, and the number of shareholders is not limited to 50, as in the case of private companies.
As a rule, public companies with liability limited by guarantee are used to register non-profit organisations. The founders are liable for the debts of such a company only to the extent of the amount of the guarantee provided.
Both public and private companies must have at least 1 director and 1 corporate secretary appointed. Another prerequisite is that such organisations must have a registered office in Singapore — an actual office space used as:
In addition, the management of the company needs to notify the authorities of the opening hours of its registered office on weekdays (this is at least 3 hours on weekdays, between 9am and 5pm). Therefore, you will not be able to register a company simply at a ‘letterbox’. Your secretary must be at the registered office during the hours pre-specified on the application form. For those companies whose business activities are carried on overseas, the registered office will usually be the office of a solicitor who will take on the role of your registration agent and secretary for a small fee.
Our company provides clients with a company registration office and a reliable corporate secretary in Singapore.
Less common types of Singapore business organisations are partnerships — associations of two or more natural or legal persons formed for joint business or professional activities.
A maximum of 20 partners may participate in commercial partnerships. The number of participants in professional partnerships is not limited.
Singapore distinguishes between general partnerships, in which the liability of the founders for the debts of the business extends to all their assets, and limited partnerships and limited liability partnerships.
What is the fundamental difference between the last two types of commercial structures, we will consider in the block of questions at the end of this material.
The exact sequence of actions may vary depending on the type of company to be incorporated. Therefore, as an example, we propose to consider the most common option — opening a Singapore exempt company.
Registration of a company can be divided into 2 major stages: preliminary and interaction with the authorities of the country. Most of the time is usually spent on preparation, but the participation of competent corporate law specialists in the process will save you a lot of time.
You need to state exactly what your company will do. According to the laws in Singapore, an entrepreneur can specify no more than 2 areas of activity for one organisation. And some commercial activities cannot be carried out in this country without a state licence. Experienced corporate professionals know which related field to specify in the registration documents to avoid additional costs.
The next step is to choose a suitable name for the company to be registered. It must not repeat the names of already existing companies and officially registered trade marks in the country, and may not contain words and expressions of an offensive or discriminatory nature. Immediately after the name it is necessary to indicate the legal form of organisation, either in full or by abbreviation. For example, the abbreviation “Pte Ltd” is used in Singapore for EPC, a type of private limited company.
Determine the structure of the company: composition of the founders, distribution of shares in the authorised capital. Appoint the management, and a reliable nominee director who is a permanent resident or citizen of Singapore will also be required. The work done should be recorded in the articles of association and memorandum of association of the organisation, as well as the register of shareholders and the first minutes of the founders’ meeting.
You need to rent an office in Singapore and hire a corporate secretary. If your firm is expected to have a physical and economic presence in the country, you can rent or buy your own office space and hire local staff.
Organisations operating out of Singapore usually use local lawyers or law firms who, for a modest fee, provide registered foreign firms with an office, store their corporate records and do the secretarial work.
Business registration in Singapore is handled by the Accounting and Corporate Regulatory Authority, which we will hereinafter, for the sake of brevity, refer to as the Regulator or ACRA.
You or your lawyer fill in the registration form in English and send it to ACRA together with the statutory documents and information about the directors and founders.
The registrar, in turn, runs the check:
If the preliminary inspection reveals no irregularities, the applicant is sent a contract and an invoice for payment of the business registration service.
Once the prospective Singaporean entrepreneur or his registration agent has paid the registration fee, the registration documents are sent to the registered office of his firm, which he must sign, to the registered address specified in the application form.
Once the packet of signed company documents arrives back to ACRA, your Singapore business will be officially registered.
We have given an example of submitting an application through an intermediary and with a paper-based document flow. In this variant, the standard procedure can take up to 7 working days.
If you start a company online, it will take you exactly 1 working day to set up, excluding the preparation stage. The regulator in Singapore processes applications very quickly. For example, it takes only 2 hours to do a preliminary name check.
The exact amount you spend depends on what kind of business you plan to launch, where your company will do business, and a host of other important variables.
At the end of 2021, the total payments to the state directly during the company registration process totalled USD 680. This amount includes the state fee, the cost of the eligibility check of the company name and the registration fee.
The services of a nominee Singapore director cost from $2,500 per year. Renting an office for the company’s registered office costs from $500 for 1 year.
Corporate secretarial services at the firm’s place of incorporation, typically cost from $700 per year.
All business organisations in Singapore are required to register with the tax office and submit an annual tax return as well as a statement of estimated income.
The annual financial report, together with the minutes of the founders’ meeting at which it was approved, are sent to the Singapore Accounting and Corporate Regulatory Authority.
If your firm’s turnover exceeded S$5 million in the reporting period, your financial statements should be examined by a full audit.
Pay 17% corporate tax on their income. If an entrepreneur is setting up a company in Singapore for the first time, he or she is entitled to benefit from a deduction from taxable profits.
A budding Singaporean entrepreneur whose income in the reporting period was more than SGD290,000 can save SGD17,425 in taxes, equivalent to US$12,900 at the current exchange rate.
If a company incorporated in Singapore qualifies as a start-up by the authorities, the above favourable tax treatment will apply for the first 3 years after the business is incorporated.
The Singapore analogue of value added tax is called GST (Goods and services tax). It is charged at a rate of 9% on all goods and services supplied by Singapore resident companies whose taxable sales for 12 months have exceeded S$1 million.
The zero rate of goods and services tax applies, subject to a number of conditions, to exports of goods and services, as well as financial services, the sale of cryptocurrency and investment precious metals, and the sale and rental of residential property.
Immovable property located in the country is taxable. When buying property in Singapore, you must pay stamp duty.
The Singapore tax system is considered to be “one-tier”. Tax on profits is paid only once at the level of a private or public company, i.e. dividends are distributed among shareholders without any contributions to the state treasury.
Capital gains and profits of a company derived from business activities abroad are not subject to tax in Singapore. Foreign income is not taxable only as long as it remains in overseas bank accounts.
Singaporeans have more than 80 double tax treaties signed around the world.
This jurisdiction provides founders of international companies with almost the same set of tax planning tools as a classic offshore zone. At the same time, Singapore has an excellent business reputation.
Although Singapore is considered to be a very convenient country for launching a new business, you will still need qualified legal support. The specialists of our company will save your time and help you significantly reduce your expenses on company registration in Singapore.
With us, you will solve a huge list of challenges facing the aspiring Singaporean businessman. We do not limit ourselves to just one issue of company registration or visa support for the entrepreneur. With our specialists, you will successfully open a local bank account or register an account with an electronic payment system, prepare a tax return and prepare your first financial report!
We have only looked at those Singaporean legal forms for doing business that are popular with foreign entrepreneurs. If you are a permanent resident of Singapore and a private or public limited company does not suit your needs, you can do business as a sole trader.
Yes, but the entrepreneur living abroad will need a local authorised representative — a permanent resident or a citizen over the age of 18 living in the country.
Partnerships are dealt with in a similar manner. If foreign businessmen do not have partners resident in Singapore, one Singapore authorised representative (minimum) will need to be appointed.
In a general partnership, all partners are responsible for the performance of the organisation with all their assets.
In a limited partnership, the founders are divided into 2 categories, one of which is limited partners. They are liable for the debts of the company only with their share in the partnership capital. Such partners do not take part in the management of the firm.
A Singapore limited liability partnership is a hybrid of a limited liability company and a limited partnership. A partner here is not personally liable for all debts of the entity, but is liable for adverse results of the partnership resulting from his or her own negligence or carelessness.
Up to 75 per cent of tax revenues to the country’s budget come from companies involved in the service market. Local authorities actively support entrepreneurs involved in such sectors of the economy as:
Minimum documentation package:
Company incorporation in Singapore with the help of Imperial & Legal. Over 20 years of experience. Specialists provide comprehensive business services. Free consultation available.
Start a business in UK
Accounting services
Financial & Wealth management
Worldwide business support
Translation and interpreting
International tax and estate planning