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Singapore is a prime location for business incorporation due to its favorable economic and political environment. It offers a stable economy, strong legal framework, efficient tax system, and access to the Asian market.
This guide aims to provide a comprehensive overview of the process of incorporating a company in Singapore, including eligibility requirements, registration procedures, and compliance requirements. Whether you are a local entrepreneur or a foreign investor, this guide will equip you with the knowledge and tools necessary to establish your business in Singapore.
Requirements for Incorporation in Singapore
Incorporating a company in Singapore requires fulfilling certain requirements. Before beginning the process of setting up a company in Singapore, it is important to ensure that you meet these requirements to avoid any delays or rejections during the registration process. In this section, we will discuss the eligibility requirements, registration requirements, cost of setting up a company in Singapore, types of business structures available, and documents needed for incorporation.
To be eligible for company incorporation in Singapore, you must meet the following criteria:
At least one shareholder: Singapore law requires a minimum of one shareholder for a company to be incorporated. The shareholder can be an individual or a corporate entity.
At least one resident director: Every company in Singapore must have at least one director who is a Singapore citizen, permanent resident, or holder of an Employment Pass.
Company secretary: Every company in Singapore must appoint a company secretary within six months of its incorporation. The secretary must be a natural person who is a resident in Singapore.
Registered office address: Every company in Singapore must have a registered office address in Singapore.
To register a company in Singapore, you must provide the following information to the Accounting and Corporate Regulatory Authority (ACRA):
Proposed company name: The name must be unique and not similar to any existing company or trademark.
Description of business activities: A brief description of the company's intended business activities is required.
Share capital: The amount of share capital that the company intends to issue must be specified.
Types of business structures available
There are several types of business structures available in Singapore, including:
Private Limited Company (Pte Ltd): This is the most common business structure in Singapore and is suitable for most businesses.
Limited Liability Partnership (LLP): This structure is suitable for professionals who want to operate as a partnership while enjoying the benefits of limited liability.
Sole Proprietorship: This structure is suitable for small businesses operated by a single individual.
Partnership: This structure is suitable for businesses owned by two or more individuals.
Documents needed for incorporation
To incorporate a company in Singapore, the following documents are required:
Memorandum and Articles of Association (MAA): The MAA outlines the company's constitution and rules for governance.
Identification documents: Copies of the identification documents of the company directors, shareholders, and company secretary are required.
Proof of registered address: A copy of a recent utility bill or tenancy agreement must be provided to prove the registered office address.
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Step-by-Step Guide to Incorporating a Company in Singapore
In this section, we will provide a comprehensive step-by-step guide on how to incorporate a company in Singapore. Incorporating a company in Singapore can be done quickly and easily, usually within 1-2 days. By following these steps, you can ensure a smooth and hassle-free registration process.
Reservation of company name
The first step in incorporating a company in Singapore is to reserve a unique company name. The name reservation process can be done online through the ACRA website. It is important to ensure that the name you choose is not identical or similar to any existing company names or trademarks. The name reservation process usually takes a few hours, and the reservation is valid for 60 days.
Appointment of Directors and Company Secretary
Every company in Singapore must have at least one director who is a Singapore citizen, permanent resident, or holder of an Employment Pass. You can appoint more than one director if you wish. In addition, you must appoint a company secretary within six months of incorporation. The secretary must be a natural person who is a resident in Singapore.
Share capital and ownership structure
Next, you need to determine the share capital of your company. The share capital represents the amount of money that the company will raise by issuing shares. You can issue shares with or without a par value. The ownership structure of the company will depend on the number of shares issued and the percentage of shares held by each shareholder.
The company constitution is a document that outlines the rules and regulations that govern the company. It includes details such as the objectives of the company, the rights and duties of the shareholders and directors, and the procedures for conducting meetings. You can use a standard template or draft your own company constitution.
Registration with Accounting and Corporate Regulatory Authority (ACRA)
To register your company, you must submit the required documents to ACRA. The documents required for registration include:
Memorandum and Articles of Association (MAA)
Identification documents of directors, shareholders, and company secretary
Proof of registered office address
Consent to Act as Director and Statement of Non-Disqualification
Once the documents have been submitted, ACRA will process the application within one or two days. If the application is approved, you will receive a notification of registration and a certificate of incorporation.
After incorporating your company, there are a few post-registration procedures that you need to complete:
Register for taxes: You must register your company for taxes such as Goods and Services Tax (GST) and Corporate Income Tax.
Open a bank account: You need to open a bank account in the name of your company.
Obtain necessary licenses and permits: Depending on the nature of your business, you may need to obtain licenses and permits from the relevant government agencies.
Taxes and Compliance for a Singapore-Incorporated Company
Incorporating a company in Singapore not only offers a favorable business environment but also an efficient tax system. In this section, we will discuss the taxes and compliance requirements for a Singapore-incorporated company.
Corporate tax rates
The corporate tax rate in Singapore is one of the lowest in the world. As of 2021, the corporate tax rate is 17%. However, the effective tax rate can be even lower due to various tax incentives and exemptions available for businesses. For example, newly incorporated companies can enjoy tax exemption on the first S$100,000 of taxable income for the first three consecutive years of assessment.
Goods and Services Tax (GST)
Goods and Services Tax (GST) is a value-added tax that applies to the supply of goods and services in Singapore. If your company's annual turnover exceeds S$1 million, you are required to register for GST. The current GST rate in Singapore is 7%.
Singapore has a strong legal framework that requires companies to comply with various regulations and reporting requirements. Some of the key compliance requirements for a Singapore-incorporated company are:
Annual General Meeting (AGM): Every company in Singapore is required to hold an AGM once a year. The purpose of the AGM is to present the financial statements and reports to the shareholders.
Annual Return: Every company in Singapore is required to file an annual return with ACRA within 30 days of the AGM.
Accounting and Bookkeeping: Every company in Singapore is required to maintain proper accounting records and prepare financial statements in accordance with the Singapore Financial Reporting Standards.
Employment Laws: Companies in Singapore must comply with various employment laws such as the Employment Act, which regulates the employment relationship between employers and employees.
Every year, a Singapore-incorporated company must file the following documents with ACRA:
Annual Return: The annual return contains information about the company's directors, shareholders, and company secretary.
Financial Statements: The financial statements must be prepared in accordance with the Singapore Financial Reporting Standards and include the income statement, balance sheet, and cash flow statement.
Tax Return: The tax return must be filed with the Inland Revenue Authority of Singapore (IRAS) and include details of the company's income, deductions, and tax payable.
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By partnering with a global employment and payroll platform like Skuad, incorporating a company in Singapore can be a seamless process that sets you on the path to success in one of the world's most business-friendly destinations.
Skuad's global employment and payroll platform can help organizations looking to venture into new markets to streamline the process. By teaming up with Skuad, businesses can easily hire international talent, manage payroll for their employees and contractors, and stay compliant with country-specific employment regulations in more than 160 countries worldwide - all without having to establish a subsidiary or entity. With Skuad's assistance, you can save both time and money while still benefiting from top-tier HR administration services, regardless of your location.
Sandeep Patel is a Content Marketing Manager and Strategist. Over the last five years, he has created and managed content for global brands and fintech startups. He is passionate about remote work and using tech for a better work-life balance.