Singapore Company Registration: How to Setup Company in Singapore?

Contents | Show more Show less +

7 Advantages of Registering a Company in Singapore Corporate Taxation in Singapore The Strongest Sectors of the Singaporean Economy What Legal Structures Are Available in Singapore? Company Formation in Singapore Incorporation Process in Singapore Further Steps Setting Up A Company in Singapore with Imperial & Legal FAQs about Registering Company in Singapore

Vasily Kluev

Client Service Director, Immigration Adviser (OISC)

Singapore is a small island city-state in Southeast Asia, right at the crossroads of sea trade routes between East and West. The Singaporean authorities have spent decades making their country a major financial and business hub where all the most important international corporations open their subsidiaries. International investors are attracted not only by Singapore’s good business reputation, but also by the islands’ convenient infrastructure, highly qualified and motivatedworkforce, and effective legal protection for businesses, including protection of intellectual property rights.

7 Advantages of Registering a Company in Singapore

Other key advantages of this jurisdiction include:

1. Simple procedure of company registration. The standard process, which includes the preparation and verification of documents, takes from one to two And in some cases, opening a company in Singapore can be done online, without the presence of the founders.
2. Simplicity of doing business. It is convenient to do business in this country because new companies are notsubject to constant inspections from the authorities and endless reports to regulatory agencies. For years,Singapore has remained in the top three easiest countries for setting up a business.
3. Possibility to have nominees. If confidentiality is your top priority, in Singapore, you can open acompany with nominee persons and hide information about the ultimate
4. Active governmental support of small and medium-sized businesses. If your company promises to grow, you should be able to find additional investment in this country.
5. Tax optimisation. Singapore’s tax system is relatively simple and allows international entrepreneurs to significantly reduce their fiscal burden, especially if the company operates abroad.
6. A highly reliable banking system does not only guarantee that your company’s funds will be safe but also offers affordable loans and convenient payment processes. Overseas financial institutions are eager to work with companies registered in Singapore.
7. Immigration opportunities for the whole family. If you register a company in Singapore and plan to work both on global and domestic markets, and your business is physically present in the country (you have a Singapore office and employ locals), you can obtain a residence permit and later apply for permanent residency and citizenship.

However, our article would be incomplete if we omitted a few disadvantages of this jurisdiction:

• Singapore has a relatively high cost of living due to the high level of wealth of Singaporeans.
• The domestic market is relatively small. In this respect, the region loses out to its economic rival, Hong Kong, via which international entrepreneurs can access the vast Chinese markets. On the other hand, business opportunities in Hong Kong are limited by the so-called “transitional period”, while in Singapore international businesspeople are promised a more stable future as they are doing business in a sovereign state.

Having weighed all the pros and cons, an investor might decide that opening a company in Singapore is very profitable as you conduct your business in a jurisdiction offering legal tax optimisation tools and at the same time having advantages typical of an offshore zone

Corporate Taxation in Singapore

Singapore has a simple or so-called single-tier tax system. What does it mean? In this system, corporation tax is paid only at the company level, while dividends distributed to the shareholders are tax-exempt.

Capital gains and a part of the company’s revenue are not taxed either, provided they are earned outside the country and not brought to Singapore afterwards. Thus, the country with an impeccable business reputation offers international businesses the same opportunities as traditional tax havens in the Caribbean: zero taxation on overseas revenue and confidentiality.

Singapore has signed double taxation treaties with 80 countries worldwide.

The standard corporation tax rate in the country is 17%. The Singaporean government supports businesses by providing tax reliefs to start-ups.

The standard VAT rate in Singapore is only 7%. Property tax and stamp duty are levied on property-related transactions.

The Strongest Sectors of the Singaporean Economy

Before registering a company in Singapore, a savvy entrepreneur needs to research carefully which economic areas are already developed in the country, and which are rapidly developing at the moment.

A great number of contributions to the country’s budget come from taxes from the service sector, including specialised and financial services, information and communication technologies, and tourism. Annually, this sector accounts for at least 75% of revenues.

The service sector is followed by industry and construction. Now, only the most profitable areas of the production sector have remained afloat in Singapore: electronics, high-precision engineering, chemical industry, biomedical technologies, and aerospace industry.

The fast-growing sectors of the Singaporean economy are of the greatest interest to foreign businesses:

• Agro-industrial manufacturing
• Fintech
• Green technologies
• Green modes of transport.

The government supports the above-mentioned sectors. For example, the authorities are interested in the growth of the agricultural sector to lower the amounts of imported food.

What Legal Structures Are Available in Singapore?

Just like in other economically developed countries, Singapore offers multiple legal structures:

The most common legal structure in Singapore is a company, the most popular types of companies in the country are the following:

1. Exempt private company / EPC
2. Private company limited by shares
3. Public company limited by shares
4. Public company limited by guarantee.

All four types limit the liability of the founders towards the company’s debts:

• In private companies, it is limited by the amount of the initial contribution to the share capital.
• In public companies, it is limited by the actual value of the shareholding or the guarantee amount.

Most often, international entrepreneurs choose an exempt private company to register their business in Singapore. It is suitable for most types of commercial activities in the region, and it allows you to successfully resolve issues related to immigration, recruitment, registration of intellectual property rights and attraction of investment capital.

An exempt private company imposes some limitations:

1. The number of shareholders of an EPC shall not exceed 20 people.
2. Only natural persons can be shareholders.
3. The annual turnover of an EPC should preferably not exceedSGD 10,000,000 (approximately USD 7,300,000).

Company Formation in Singapore

To give you a clearer overview, we are going to consider the process of starting a business in Singapore using the example of an EPC.

Before sending the documents to the ACRA (Accounting and Corporate Regulatory Authority), you will first need to take the following steps:

1. Come up with an original name for your company which does not copy the names of already existing Singaporean companies. The name should include an indication of the structure of the legal entity at the end: in this case, it will be “Pte Ltd”.
2. Decide on the area your company will operate — legally,you can choose only up to two areas. Keep in mind that some of them will require a licence. If you are registering a company in Singapore with the assistance of experienced advisors, they will be able to tell you whether your activity is regulated by the state and even suggest a similar area of activity, but without the mandatory licensing.
3. Choose who is going to be a directorfrom among residents.
4. Find a Singaporean resident to be appointed as a corporate secretary. You can hire them even after the registration of the company but, as a rule, such issues are tackled in advance.
5. Register a legal address where official letters from the regulatory authorities will be sent.

Incorporation Process in Singapore

If you contact qualified agents specialising in setting up companies in Singapore, they will prepare, approve and send the necessary documents for you to sign after which they will register the chosen legal structure. They cover the following services:

1. Fill in the Singapore company registration application in correct English and send it together with all supporting documents to the ACRA. The ACRA will review the application and start the verification of the documents. The authorities must ensure that the name you have chosen meets all the requirements and does not replicate companies registered in the country and that the founders of the future company are not on international blacklists or lists of politically exposed persons.
2. If your documents are in order, an agreement will be sent to the agent and they will coordinate all details with theACRA, after which the invoice for the registration services must be paid.
3. Once the ACRA’s services have been paid, registration documents are sent for signingto the registered address included in the application.
4. The registration documents signed by the founders should be sent back and your company will now be officially registered with the Accounting and Corporate Regulatory Authority.

Singapore deserves its place in the top three easiest jurisdictions for doing business. The registration procedure itself takes less than an hour. Corporate advisors usually need from one to two weeks to complete the whole process, which includes collecting the necessary information, verifying the information provided and having the registration documents signed.

Further Steps

To run your business in Singapore, you need to register with the tax authorities and open a current account with a Singapore bank. The latter is quite difficult for companies with international founders, especially if the business was set up to operate overseas and does not have a physical and economic presence in Singapore. It is not uncommon for such firms to use payment systems instead of banks or open an account with a financial institution overseas, as foreign banks treat Singaporean companies favourably.

The Singaporean authorities do not require too much reporting from private businesses, but all  registered companies, regardless of where they operate, prepare and submit four annual reports to the authorities:

1. A report on the company’s estimated taxable revenue,
2. Minutes of the annual general shareholders’ meeting.
3. Annual
4. Corporation tax return according to the current regulations.

Setting Up A Company in Singapore with Imperial & Legal

The range of tasks that Imperial & Legal’s specialists handle on an everyday basis has long extended beyond the United Kingdom. If you are planning to enter international markets and Singapore is the most suitable jurisdiction for you, we can help you start a new company as quickly and cost-effectively as possible.

Imperial & Legal’s team will provide support for VAT filings, opening a Singapore bank account or using an international payment system, obtaining business or work visas, organising relocation to Singapore, and preparing annual accounts. With quality legal support, you will be able to fully focus on the main task, the development of your business abroad.