The small island nation of Singapore topped the World Bank’s best places to do business about six years ago and has never lost its number one status since then.
According to the most reputable business reports, starting a business in Singapore takes just three days. Isn’t this something any business owner would like to get at the place of setting a business? Fast and easy. Without any hassle.
In an article posted on Business Insider, the main reasons why Singapore has dominated the list for so long are its simple method for filing taxes coupled with its flexible immigration policy and business-friendly laws. The world bank report put Singapore above all, even the US in terms of ease of doing business and paying taxes.
Before I explain the guide to setting up a company in Singapore, the basic details need to be explained for the layman. So read the article through, and you would get all the information about setting up a company in Singapore.
The owners of companies have limited liability, unlike sole-proprietors and partnerships. The companies are distinct and separate legal entities from their owners. Hence, for the company’s debts or any legal action taken against the company, its owners are not personally liable.
However, as compared to sole proprietors and partnerships, companies have many more compliance requirements. These include many actions including holding annual general meetings and filing annual returns. Any failure in doing so results in a severe disciplinary action from the Accounting and Corporate Regulatory Authority (ACRA). It also includes a lot of extra work, should a company close down or wind up its business. For a company to be removed from the register, it can take up to 5 months.
Setting up a company in Singapore is considered to be the most suitable business structure for businesses with a view to growth. The registration of a business as a company as against other business structures also confers other significant benefits mentioned below:
Singapore is the favorite choice for businesses for a reason. Setting up a business in Singapore can be done in three simple steps, as mentioned below:
Though other options exist, many new businesses prefer to register as a “private limited company” due to the convenience and flexibility it offers. On top of that, shareholders beyond their share of capital cannot be held liable for debts and losses. Designated in such a way, your company is known as a taxable independent legal person.
The Singapore Companies Act governs the private limited company. The company must fulfill the legal and lawful requirements as dictated by the Inland Revenue Authority of Singapore (IRAS) ACRA and. The titles contain:
must be approved by the ACRA; it should be unique.
There should be a minimum of one shareholder.
At least S$1
Should be necessarily a Singapore resident.
At least one director must reside in Singapore.
For the address, a physical office is required. However, in some cases, home address can also be used.
After setting up a company in Singapore, you will get a Business Profile from ACRA as a newly-incorporated Singapore company. The business profile is an electronic report which gives detailed information concerning your business, including your registration number (UEN), shareholders, registration date etc. This profile is a mandatory requirement to open a corporate bank account, apply for licenses and permits and check on potential business partners.
After setting up a company in Singapore, a business is required to open a corporate account in any of the banks in Singapore. This is a logical step, as any business can not operate without a bank account. The major banks that can be considered for a corporate account are Citi Bank, Standard Chartered, HSBC, DBS, OCBC, and UOB. Nowadays, many banks demand the physical presence of the company stakeholders for opening a corporate bank account to fulfill the norms of KYC.
There are certain permits and licenses that are required to be obtained after incorporation of the company. Some of the business activities required approved permits of government authorities. Examples of such businesses are travel agencies, liquor distributors, private schools, video companies, money lenders, financial advisers, childcare centers, banks, importers, retailers, and wholesalers of liquor.
After setting up the company a registration number is issued by the ACRA. This number is your business identification number and is required to be mentioned on the business / company related documents used for official and business correspondence.
If your business involves importing or exporting, you must register your company with the Singapore customs.
There is a pension fund scheme in Singapore by the name of the Central Provident Fund or CPF. You are required to register with this fund if you are employing Singapore Citizen or a permanent resident. It is a compulsory fund in which employers and Singapore citizens / permanent resident employees contribute a specific percentage of their salary monthly.
Singapore is a haven for businessmen and entrepreneurs. It offers a variety of perks and privileges for the business owners who are setting up a company in Singapore. Below are the detail of the advantages that you get:
Singapore offers one of the best and effective atmospheres for business due to following reasons: