How to start a company in Singapore? Learn about the application process, fees and frequently asked questions

Singapore is described as a very good place to do business because of its uniform tax rate and lower tax rates than other countries. In addition, startups can apply for cash grants, equity financing and business loans, as well as a startup tax exemption that is valid for three years. This article will introduce the requirements, application procedures, fees and some frequently asked questions about starting a company in Singapore.

 

Requirements for opening a company in Singapore

Basic requirements for foreigners to set up a private limited company in Singapore:

1. Company Name: You will need to choose a unique company name and ensure that it complies with Singapore naming regulations. You can use ACRA’s online registration system to confirm that the name is available.

 

2. At least 1 director: You must appoint at least 1 director who can be a Singapore citizen, permanent resident or a foreigner with an Employment Pass (EP). In addition, all directors must be at least 18 years of age, have no criminal record, and be legally competent.

 

3. Company Secretary: All Singapore companies require a company secretary. The company secretary must be a Singapore citizen, permanent resident or a foreigner with EP and must be legally competent.

 

4. Shareholders: You can choose to have between 1 and 50 shareholders. Shareholders can be individuals or companies, and can be Singapore citizens, permanent residents or foreigners.

 

5. Registered Address: You will need to provide a registered address in Singapore as the registered address of your company.

 

6. Registered capital: You will need to provide the registered capital of your company, which is the minimum amount of investment required for your company. For foreigners, the registered capital requirement in Singapore is S$1.

 

7. Company documents: You need to provide all documents required for company registration, including articles of incorporation, photocopies of identity documents and proof of address of directors and shareholders, photocopies of identity documents and proof of address of company secretary, lease agreement of registered address, etc.

 

Required documents for company registration

• Articles of Incorporation
• Signature of Directors and Company Secretary
• Biographical information, identification and proof of address of each shareholder and management

 

EntrePass Application Requirements

• turns 21 years old
• is registering or intends to register a private limited company (Pte Ltd) in Singapore, or has been registered for less than 6 months
• is not a business area of coffee shops, hawker centers/food courts, entertainment venues, Chinese medicine, employment agencies and feng shui businesses
• applies as an entrepreneur, innovator or investor and meets any of the following innovation criteria

Innovative conditions:

• Entrepreneurs: Recognized by the government and have raised at least S$100,000 in capital; or are involved in a recognized entrepreneurial program; or have extensive business experience or network
• Innovators: owning any intellectual property, such as patents/trademarks; or collaborating with local research institutions; or having outstanding technical or professional knowledge in a relevant field
• investors: have a proven track record in corporate investment and are willing to invest significant capital in local companies

 

Singapore Company Type

The following are the three types of businesses accepted by ACRA: sole proprietorship, limited company and partnership. Most investors choose to set up a private limited company (Pte. Ltd.) to reduce the risk and liability of running a business and to facilitate future expansion.

 

Sole Proprietorship

Sole proprietorship is the simplest form of business structure, but the business cannot be considered a legal entity, so while the sole proprietor has control of the assets and business decisions, he or she also has unlimited liability for the business, including any lost debt, which must be repaid from personal assets. In addition, the applicant will be taxed as an individual and will not be required to apply for an additional commercial bank account. Applicants establishing a sole proprietorship will be required to hold an EntrePass, otherwise they will be required to appoint a local resident as an authorized representative.

 

Private Limited Company Pte.

A private limited company is a separate legal entity and all shareholders are only liable for the loss of the company’s debts to a limited extent, i.e. only to the extent of the principal amount they have invested. Unlike some countries such as Thailand, foreigners in Singapore can own 100% of the shares of their company and enjoy a lower corporate tax rate (0 – 17%) than sole proprietorships/partnerships. Although the incorporation process is more complicated, it usually takes only 1 – 3 days with the help of a business registration agency.

 

Limited Liability Partnership LLP (LLP)

An LLP is a separate legal entity that requires at least two partners, which can be individuals or corporations. As it is a limited liability entity, the liability of the partners is limited to the principal amount invested by them. The LLP must appoint at least one manager who must be a resident of Singapore (with a valid visa such as an EntrePass). Although they are legal entities, they are not the same as corporate entities for tax purposes and therefore the partners are taxed on their respective income.

 

Singapore Company Setup Process

To start a company in Singapore, you must hire the services of a local business registration agency (Incorporation Service), which will assist you in completing the following steps:

1.Preparation of company registration documents: articles of incorporation, personal information and signatures of important persons of the company

2. Online application to ACRA for company name approval, valid for 60 days or up to 120 days

3.Submit the identity and address proofs and curriculum vitae of important people in the company

4. Company registration on the online BizFile+ platform
5. Successfully registered to receive the “Electronic Certificate of Incorporation” and “BizProfile”.
6. Application for company bank account, business license (if applicable)
7. Hire legal counsel to handle tax and legal liabilities
8. Register for Goods and Services Tax (GST), if required

 

Singapore Company Setup Fee

The Singapore government requires the use of an agent service to set up a company. Generally speaking, the Nominee Director service is the most expensive service, costing S$1500 (one year) for a single purchase. Therefore, if you can apply for EntrePass on your own and become a director of your company, you can choose JJ&E’s CR-Premium package and save a lot of money.

 

Service Projects	Sleek	JJ&E	Osome	Voplus
ACRA Registration Fee	✓	✓	✓	✓
Company Name Reservation	✓	✓	✓	✓
Prepare registration file	✓	✓	✓	✓
Company Registration Services	✓	✓	✓	✓
Company Secretary (one year)		✓	✓	✓
Registered address (one year)		✓	✓	✓
Bank Account Opening		✓	✓	✓
Nominated Director (one year)			✓	✓ (half year)
Visa Application				✓
Total Cost (S$)	From 350	From 748	From 2,550	From 2,810
Remark	None	No more than 2 shareholders	None	None

In addition, after incorporation, you can expect the following annual maintenance costs:

• administrative services fees: such as company secretary, registered address and nominated directors, fees are generally S$300 – S$2,000.
• Accounting Services Fees: Processing of files such as financial statements, payroll, tax returns, etc., typically for S$200 – S$600.

In the process of starting a company, when there is a need to remit start-up capital, set-up costs, or even annual maintenance costs to Singapore, you should first compare the remittance services of different companies, especially the exchange rate and other hidden fees. Most traditional banks use inflated exchange rates and charge a number of handling fees such as telegraphic charges and correspondent bank fees. The Wise remittance tool uses real-time exchange rates, even market rates found on Google, and only charges a small, one-time service fee. Simply enter the remittance amount into your computer on the website and the required handling fee, exchange rate and estimated time of arrival will be calculated automatically.

 

Singapore Corporate Tax Rate

①Corporate Income Tax (CIT): Singapore CIT applies to the worldwide income of a company, but companies can enjoy tax incentives and exemptions as long as they meet the conditions. The corporate income tax rate in Singapore is 17%.

②Personal Income Tax (PIT): The personal income tax rate for residents in Singapore is based on the income level of the individual, with a maximum rate of 22%, although the rate for most people is usually lower than this.

Goods and Services Tax (GST): Similar to value added tax in other countries, Singapore’s GST applies to almost all sales and services and is currently at a rate of 7%.

It is worth noting that the Singapore government offers many tax incentives and deductions to encourage businesses to set up and invest locally, including R&D expenditures, investments and business incubators. In addition, Singapore has signed double taxation agreements with several countries to avoid the same income being taxed in two countries.

 

Frequently Asked Questions

1. How long does it take to open a company in Singapore?

If all the registration documents are ready, the agent can usually complete the entire registration process within 1-3 days, all on the online BizFile+ platform. However, if the business involves certain areas, such as education, finance, etc., it may need to be forwarded to the relevant government department for approval and wait up to 14 days to 2 months.

 

2. Do I have to move to Singapore to set up a company there?

Not necessarily, but a condition of incorporation includes the appointment of at least one director who must be a legal resident of Singapore, either a Singapore citizen, permanent resident or EntrePass holder. If there is no suitable candidate, you can consider purchasing the “nominee director” service from a business registration agency, usually for about S$1500 (one year). Most investors who set up a company in Singapore but do not intend to immigrate to the country will use this service.

 

3. Can I immigrate directly after opening a company in Singapore?

Foreigners can apply for resident status (PR) after setting up a business in Singapore, but it is not automatic immigration. The probability of success depends on a number of factors, such as the size of the company, economic contribution, employment opportunities created, the applicant’s background and professional skills, etc.

Generally speaking, if the company is large, has made significant contributions to the Singapore economy, and the applicant has a high level of education and professional skills, then the chances of successfully obtaining resident status are relatively high.

Alternatively, foreigners can apply for resident status through the Global Investor Programme. This program requires applicants to invest at least S$2 million in Singapore and meet other criteria such as job creation, sustained investment and economic contribution.

 

4. What are the benefits of starting a startup in Singapore?

①Excellent business environment: Singapore is an open, stable, transparent and competitive business environment with a strong legal framework and preferential tax policies.

② Tax incentives: Singapore offers a variety of tax incentives for startups, such as tax relief on salaries of employees, equity incentive programs and tax relief on capital expenditures.

③Efficient registration process: The company registration process in Singapore is easy and efficient, and usually takes only 1 to 2 days to complete.

④ Convenient financing channels: Singapore startups have a variety of financing channels to choose from, including venture capital, angel investment, crowdfunding and government funding.

⑤ Quality human resources: Singapore has a world-class education and training system that provides highly qualified, diverse and international human resources, which is essential for start-ups.

(6) Location advantage: Singapore is strategically located as Asia’s business and financial center, making it easy for startups to expand their markets and businesses.

All in all, Singapore offers a wealth of advantages and support for startups to succeed in the international marketplace.