Epica Guide Series
A Complete Guide on Singapore company registration
New Foreigner Promoters often have lot of questions about Singapore Company Registration. Here we provide complete guide for your reference.
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Complete Guide-Singapore Company Registration
Table of Contents
Introduction
Singapore is among the easiest countries to incorporate a business. It tops the World Bank's list of easiest countries to do business for seven consecutive years. Singapore company registration is a fast process that does not involve any red-tape.
Singapore company incorporation is easy not just for the locals but also for the foreigners. The registration process is entirely online. It takes about 24 hours to process. However, foreigners cannot do Singapore company registration on their own. They must hire a registered filing agent from Singapore. Also because of additional requirement about the documents to be obtained, for foreigners the process may take longer time.
ACRA: the Singapore company registrar
ACRA is the government body that supervises the Singapore company incorporation process. ACRA stands for Accounting & Corporate Regulatory Authority. Both foreigners and locals must fulfill all the ACRA's requirements for successful Singapore company registration.
Business structure options in Singapore
Singapore broadly allows three different businesses entity types for business registration:
Every business structure has some pros and some cons. It is necessary to understand them before proceeding with the registration of your company.
Business Structure |
Pros |
Cons |
Sole Proprietorship / Partnership |
The registration process is cheap and very fast. A sole proprietorship has a single owner. Hence, it is easier to manage and operate. There are not many compliance requirements. | The sole owner of a company has unlimited liabilities. A sole proprietorship is not considered as a separate legal entity than the owner. Therefore, the personal income tax rate is applied to the chargeable income instead of the corporate tax rate. |
Limited Liability Partnership |
An LLP is not the same legal entity as the owners. There are limited personal liabilities for the partners. The termination procedure is not much complicated. | Two partners must always be there. There are no corporate tax benefits. Ownership transfer is not easy. |
Private Limited Company |
Shareholders enjoy limited liability. There are corporate tax benefits. For qualified startups, there is a tax exemption benefit for three successive years. Easy ownership transfer and perpetual succession are two of the most significant benefits of a private limited company. | Singapore company registration cost is high than other options. The administrative cost is also high for running a private limited company. The company must follow a strict code of conduct. The termination procedure is complicated than other two entity types. |
Which option is the best of the three? Are there any restrictions on foreigners?
The first important point to remember is foreigners can not set-up Sole Proprietorship or partnership in Singapore. It is also difficult for them to set-up a Limited liability partnership. So practically the option left for them is to set-up a private limited company.
Registering a private limited company comes with a large number of benefits.
Income tax is charged at corporate tax rates (0% to 17%). A sole proprietorship or an LLC is taxed at personal tax rates (0% to 22%).
A company is a different legal entity. A Shareholder's liability in a company is limited to the amount he or she invested in the company's shares. Foreigners can own 100% shares.
Different Options within Private Limited Company for foreigners
Once you have decided to incorporate a private limited company in Singapore, there are further three subtypes that you must consider and decide. Foreigners are allowed to set up any of the three business entities for Singapore company incorporation:
There are different compliances for all three entities. You must understand them before you proceed with Singapore company registration.
Main differences between three business entities that a foreigner must know before Singapore company registration
All three entities can be 100% owned by a foreign corporation.
Type of business entity |
Main differences |
Representative Office |
It is a temporary set-up and cannot engage in commercial or revenue-generating activities. A representative office must be upgraded to a branch office or subsidiary within three years. Staff is limited to five persons only. A chief representative from the company's main branch must relocate to Singapore. |
Branch Office |
It is an extension of a foreign company. Therefore, a branch office can engage in commercial activities within the parent company's scope. A branch office must appoint an agent who is a Singapore resident. |
Subsidiary (Private Limited Company) |
A subsidiary is a private limited company and enjoys all the benefits of one. After Singapore company incorporation, a subsidiary can conduct commercial activities. It is a separate legal entity. A subsidiary file annual tax returns in Singapore. |
The above data proves that a subsidiary or a private limited company is the best option for a foreigner to set up a Singapore business.
Singapore company registration requirements
Foreigners are mandated to hire a registered filing agent to assist them with Singapore company incorporation. Even local entrepreneurs and business owners are also recommended to engage a filing agent to ensure the fulfillment of all the compliance requirements.
The requirements for Singapore company incorporation are:
Company name
An approved company name is mandatory for Singapore company registration. It must be reserved from ACRA.
Shareholders
A Singapore company must have a minimum of 1 and a maximum of 50 shareholders. Corporate entities can also be shareholders in a Singapore private limited company. Singapore approves 100% foreign shareholding.
Share Capital
The minimum paid-up capital required for Singapore company registration is S$1. Additional capital can be injected anytime to increase the share capital of a company. There is no maximum limit on Company share capital.
Company's Registered Address
All Singapore-incorporated companies must have a local registered address for the company's office in Singapore
Directors
A Singapore company can have both local and foreign directors. However, all Singapore-registered companies must have at least one director who is either a Singapore PR (permanent resident) or a Singapore citizen. Entrepreneur Pass & Employment Pass holders are also eligible to act as a local director. Singapore does not allow corporate directors.
Company Secretary
A qualified company secretary must be appointed within the first six months of Singapore company registration. A secretary must be a Singapore-resident. The sole director of a company is not permitted to act as the company's secretary.
What is the Nominee director service in Singapore
A nominee director service is provided by Corporate Secretarial Provider (Essentially Company like ours). As per ACRA regulations, at least one director of the company must be a Singapore-resident. It means he/she must be a Singapore citizen, PR, EntrePass, or Employment Pass holder. However, this can be a problem for a foreign promoter who may not have any person in Singapore to fulfill these requirements. In this case, a CSP company can make arrangements to provide you a person to act as a locally resident Director of the company. This is called as a Nominee Director Service. This arrangement is very common in foreigner promoted companies in Singapore. Every year thousands of companies are incorporated in Singapore with this arrangement.
Two modes for Nominee Director Arrangement
A CSP may be engaged to provide nominee director service in the following two manners.
Long term Nominee Director
You can forever run your business from overseas, while a nominee director will fulfill the ACRA's requirement of a local director in Singapore. In this scenario, you engage nominee Director service on an ongoing basis. You will typically pay annual nominee Director charges.
Temporary Nominee Director
You can hire a temporary nominee director and apply for an Employment Pass. The nominee director will act as the local director until you secure your Employment Pass and relocate to Singapore. After your relocation, you can be appointed as a local director of the company.
CSP will charge a fee range from S$1800-S$2400 per year for nominee director service. Some CSPs will require you to put about S$2000 as a security deposit.
KYC or CDD before Company Incorporation
ACRA requires your corporate service provider (CSP) to conduct a KYC (Know Your Customer) or CDD (Customer Due Diligence). This is in compliance with international AML (anti-money laundering) regulations, which mandate us to obtain essential information about the client.
The following information is required for KYC/CDD:
Every CSP creates its own policy and follows it. The requirement for KYC, in case of foreigner promoted Singapore Company, are also specifically spelled out by ACRA regulations.
Documents required from locals for Singapore company incorporation
For Singapore residents, the required documents are:
For Employment Pass holders, the required documents are:
Other than the documents mentioned above, a CDD form must be filled. It is required to gather the details about the company's operations. It will also collect data about what type of financial transactions will be carried out by the company in the future.
Documents required from foreign individuals for Singapore company registration
A foreign individual who is looking for Singapore company incorporation must submit the following documents:
In this case also other than the documents mentioned above, a CDD form must be filled. It is required to gather the details about the company's operations. It will also collect data about what type of financial transactions will be carried out by the company in the future.
Documents required for corporate shareholding
Singapore allows corporate shareholding. Foreign corporations can own 100% shares of a Singapore company.
The following documents are required from the corporate entity if it is taking up shareholding in Singapore entity:
UBO Chart
One of the important point to note is, we also need a chart showing the ultimate beneficial owner of the proposed Singapore Company. As required by the ACRA regulations, when a corporate entity is taking up the shareholding in a Singapore company, the identity of the true owners must be recorded and details are required to be stored.
Company's ownership structure chart that identifies the shareholding company's UBO (Ultimate Beneficial Owners). ID and residential address proof documents will be required from the key UBOs for KYC due diligence. What that means is, for each UBO we need same details as in case of the individual shareholder or Director (eg. Passport copy, proof of address and 2nd id document).
Singapore Company Registration Procedure
There are three steps involved in the Singapore company incorporation.
How to get your company name approved?
Getting your company name approved is a simple online process. A company name must follow specific ACRA guidelines to not get rejected.
If the above guidelines are followed correctly, a company name is approved within an hour.
There are some essential facts regarding company name registration that one must keep in mind.
Company Registration Documents Required by ACRA
Before proceeding with Singapore company incorporation, a company must prepare the registration documents.
ACRA needs the following documents:
Some additional documents which are also prepared, but are not required to be lodged with ACRA are as follows;
All documents, before submission, must be in English or translated into English.
Steps involved in Singapore company incorporation
Singapore company registration is done online on BizFile+, a web portal for Singapore company incorporation. The entire procedure is online and does not require any physical presence.
This leaves you with two options.
Singapore company registration steps without visiting Singapore
Remote incorporation is ideal for those who want to run their business from overseas. There are steps that you must follow for a successful remote Singapore company incorporation.
Engagement
You connect with us via emails, telephone calls, or a video call. Give them details about your business model and clarify the doubts you have regarding remote registration. Ideally, it takes 2-3 days.
Personal Details
The next step involves providing your particulars. The documents required in this stage are passport copy, address proof copy, copy of a second ID, and KYC form. It also takes 2-3 days.
Video Conference
We will have a video conference with every director and shareholder of the company for identity verification. This process takes one or two days.
Documents preparation and signing
After the video conference, we will prepare the necessary documents required for Singapore company registration. These documents will be electronically signed by using electronically signing software. This process does not usually take more than a day.
Incorporation
Once above activities are done, we will proceed for company registration. Once your company is registered, incorporation documents are sent to you.
Introduction to Bank
After the successful incorporation of your company, the registration details will be sent to the bank representative for the bank account opening. The bank representative will take the process forward from this point on.
The entire procedure generally takes 7-10 days. The actual incorporation takes no more than a day. However, the time is consumed in document preparation, verification, and other necessary discussions.
Singapore company registration steps by visiting Singapore
Registration steps are not much different, even if you decide to visit Singapore for the registration. However, process tends to be faster.
Engagement
You connect with us via emails, telephone calls, or a video call. Give them details about your business model and clarify the doubts you have regarding remote registration. Ideally, it takes 2-3 days.
Personal Details
The next step involves providing your particulars. The documents required in this stage are passport copy, address proof copy, copy of a second ID, and KYC form. It also takes 2-3 days.
Meet in the Office
In this case, you visit Singapore for the rest of the steps. Instead of a video conference, we will verify your details at our office. Documents are also manually signed in the office. It will take a day.
Incorporation
The registration procedure is online. Registration documents are handed over to you after the incorporation. It will take a day.
Meeting Bank Representative
A meeting will be arranged with the bank representative for the opening of the company's bank account. It will take a day.
It should be noted that a three-day visit is enough for company incorporation and other significant procedures. Plan your visit on any three working days and avoid weekends.
Documents you will receive after Singapore company incorporation
After a successful Singapore company registration, you will receive some official documents. These official documents are the proofs of your Singapore company incorporation and are required for all official activities and the company's operations in the future.
Constitution of the company
A company constitution, formerly known as Memorandum & Articles of Association, is required by a company to adopt during registration. A company can create its custom constitution or adopt the Singapore company constitution available with ACRA.
A company constitution states the guidelines and procedures that govern the company. It must clearly explain the company's purpose, rights, and responsibilities.
The minimum information that is required in a company's constitution is:
A constitution must also outline the instructions for running the company on a daily basis. It must provide specific rules that govern:
Certificate of Singapore company registration
ACRA sends an official email also referred to as an e-Certificate of Singapore company incorporation. This e-Certificate contains the following information:
ACRA does not provide a hardcopy of the Singapore company registration certificate by default. However, the e-Certificate is sufficient for all the corporate requirements, like bank account opening, transacting with other parties, etc.
A hardcopy certificate can be purchased from ACRA after Singapore company registration. It can be used for overseas business requirements, such as at overseas government agencies, embassies, etc. The example you see in the image is hardcopy purchased certificate and not the default email that ACRA sends.
BizProfile: Business Profile of the Company
ACRA issues a PDF document called BizProfile, alternatively known as Company Extract. It contains the company's following significant details:
Bizprofile, is generally the most important document which you will need quite often. For any business dealing the other party will usually ask for this document.
How to independently verify your company's registration status
If you incorporated your company without visiting Singapore, you might want to confirm its registration status. You can independently verify your Singapore company registration status easily by following these steps:
Opening a bank account After Singapore Company Registration
A company cannot make transactions without a corporate bank account. Therefore, the most important step after Singapore company registration is opening a corporate bank account.
Without a bank account, you will not be able to receive any payments or pay for expenses on behalf of your company.
The account opening procedure is not much different from the company incorporation procedure.
Documents required for bank account opening
For local individuals, the bank will require NRIC and a copy of the address proof of all the company's shareholders and directors. For foreigners, the bank will require the passport and copy of the address proof of all the company's shareholders and directors.
For a corporate shareholder, you will need the same documents that were required for the Singapore company registration.
The bank will also need the company's BizProfile and constitution. You will also be required to fill the bank's KYC form.
Bank account opening steps
Opening a Singapore corporate bank account is generally done in the following steps:
If done remotely, a corporate account opening in Singapore takes around 4-5 weeks. It still takes a minimum of three weeks, even if you are physically present. Please note that the remote bank account opening is possible during COVID Period, however, banks may resort back to personal meeting requirements after COVID is over.
Important tasks after a Singapore company registration
You can start conducting commercial activities right after Singapore company incorporation. However, there are some post-registration activities that must be completed:
Obtaining a Central Registration Number
If your company gets engaged in trading activities, you must obtain a Central Registration Number from the Singapore Customs. This is applicable when your company goods are going to cross the Singapore border, or you import goods from other countries.
CPF Registration
CPF is short for Central Provident Fund. If you hire residents in Singapore as employees for your company, you must register for CPF. It is a retirement scheme for Singapore citizens and PRs.
Each month, the employees must contribute a specific part of their employees' salary into their CPF account. The employer also makes some contributions to the employees' CPF accounts each month.
Business License Application
There is minimal bureaucracy in Singapore. Most of the businesses do not require any license to run. However, some specific sectors are regulated. If your business comes under one or more of these regulated sectors, you must apply for a business license immediately after Singapore company registration.
Some examples of such sectors are a travel agency, construction business, trading activities, employment agency, private education business, and real estate.
Minimum compliance for every business after Singapore company incorporation
There are some minimum compliance requirements that every company must follow post-incorporation.
Compliance requirements for ACRA
ACRA requires a company to adhere to the following compliance requirements:
Compliance requirements for IRAS
For the income tax purpose, all companies are required to follow these compliances:
You might have noted that all these compliances for a Singapore Singapore registered Company arise in the second year of operations. There are no compliance requirements in the first year itself, after Singapore company registration.
Singapore company closure: In case your plans do not work out
In case you find your company not going anywhere after Singapore company registration, you can deregister it. Singapore gives you two options for company closure.
Strike Off
It is a less costly and easier method. This option is only available to solvent companies. It means there are no outstanding dues of the company, like debts or liabilities that it cannot pay.
Winding Up
It is a little costlier and more complex than the first method. This is the option for insolvent companies that have more liabilities as compared to the assets. Generally, a liquidator is appointed to take possession of the company's assets. He later realized the assets for the benefit of creditors of the company.
Requirements to be met for strike off
A company must meet the following requirement to become eligible for strike off:
Striking Off Procedure
It takes around six months for a striking off procedure to complete.
Some Frequently Asked Questions
There are some frequently asked questions regarding Singapore company incorporation.
Can a foreigner hold 100% shares in a Singapore company?
Yes, a foreigner can hold 100% shares in a Singapore company. Singapore does not limit foreign shareholding and does not require a local shareholder for Singapore company registration.
Is a single director & shareholder company allowed?
Yes, a single person company is allowed. A single person can be a shareholder and director of the company at the same time.
Do I need a local shareholder or give any stockholding to the nominee director?
No, you do not need a local shareholder for Singapore company incorporation. There is no requirement to give any shareholding to the nominee director as well.
Is Singapore a tax-free country?
Singapore is not a tax-free country. The corporate tax rate is 17% that is imposed on the company's worldwide income. However, there are many tax exemption schemes for both existing and newly incorporated companies, which can bring down taxes to as low as 7%
Is a company secretary mandatory? Can a foreigner be a company secretary?
Within six months of Singapore company incorporation, a company secretary, must be appointed. Hence, a company secretary is mandatory for a Singapore company. Also, the company secretary must be an ordinarily resident in Singapore. Foreigners are not allowed to act as a company secretary in Singapore.
Which visa is required to visit Singapore after Singapore company registration?
There are two types of visas available depends on your purpose to visit Singapore after Singapore company incorporation.
For relocation purposes, an Employment Pass is necessary. It is crucial if you wish to relocate to Singapore and work in your company on a full-time basis.
Short Term Visit Pass (STVP) is another type of visa that let you stay in Singapore from 30 to 90 days. This is like a tourist visa that serves dual purposes. You can use it for personal visits, like visiting relatives or family members. And it can also be used for business meetings purposes that require your presence for a short period of time.
What is the information about a Singapore company that is publicly available?
The following information about a company is publicly available after Singapore company registration.
Anybody can purchase this information for S$5 about a company.
Is it possible to not appear in public records and keep my identity confidential?
There are specific ways to not appear in the shareholders of the company. If you want your information to not appear in public, you can get in touch with Epica. We provide guidance on this matter. Please note however, your name may still appear as a Director of the Company.
This is the end of the Singapore company incorporation guide. You may have understood all the topics related to Singapore company registration. I hope this guide has resolved any doubts you had earlier pertaining to incorporating a business in Singapore.