Guide to Setting Up Your Own Company In Singapore

Singapore promotes business-friendly laws with flexible immigration policies, making it an attractive location for businesses across the globe. It is also well known for easy tax filing methods and procedures.

In Singapore, setting up your company can take as fast as three days. however, there are different types of businesses, such as sole proprietorship and Pte Ltd companies.

Today in this article, we explain the business ecosystem of Singapore. Hopefully, we can answer some of the following questions:

• What are the steps in the incorporation of company?

• What are the requirements for company registration in Singapore?

• How long does it take to complete company registration in Singapore?

• What are the processes for company registration in Singapore?

• What is the easiest way to complete company registration in Singapore?

Choice of Company Setup

There are mainly three forms of company setups, each with its own advantages and disadvantages.

Sole Proprietorship

A sole proprietorship is less costly to administer as compared to a company. It is a one-man show company that is commonly used for self-employed individuals.

In this company setup, the business is owned and controlled by an individual, with no partners in the business.

The legal status of a sole proprietorship is linked to the business owner of the company, meaning that the owner is personal liability for the debts and losses of the company itself and can be sued in the name.

In other words, the owner takes full responsibilities for the success and failure of the company.

Profits of the sole proprietorship are treated as the personal income of the individual who owns the entity. Therefore, said income is subjected to a tax rate as that of personal income, as opposed to if the owner is a private limited company, the profits will be subjected to the corporate tax rate.

Limited Liability Partnership

A limited liability partnership is similar to a sole proprietorship company, but in this case, there are two or more partners in the setup.

Both partners share equal responsibility and can be sued personally in name for the debt and losses of the company. This means that personal assets are affected and can be used (or sued for) to pay for the debts of the company.

Private Limited

Private Limited entities are the most popular options.

Under Private Limited ownership, companies are recognisable as taxable entities.

Shareholders are not liable for debts and losses beyond their share capital.

Setting Up Your Business in Singapore

This is a quick summary of how to set up a business in Singapore.

Sole Proprietorship

Any Singapore registered company or citizen of at least 18 years of age is eligible to register a sole proprietorship. In most cases, the sole proprietor himself will act as the manager of the company, although it is possible to hire one.

You will still require a Singapore address to be registered as the business address.

Under the Home Office Scheme, residential premises can be used as a business address but owners must first seek written approval from HDB (for HDB properties) or URA (for private properties).

Registration of sole proprietorship can be completed within 1 day, provided all the documents are lodged properly with due endorsements. Documents may include:

• Proposed business name

• Description of principal activities

• The local business address for the proposed business

• Copy of owner's Singapore NRIC/Passport

• Local residential address of the sole proprietor

• Declaration of compliance and Statement of Non-Disqualification

Limited Liability Partnership

A limited liability partnership requires similar documents, with some additional requirements.

All applications for the registration of a new LLP company must be submitted online via ACRA's electronic filing and information retrieval system. You can register an LLP in the following ways:

• Log into BizFile+  to submit the online transaction.

• Engage the services of a registered filing agent, such as Morrison Management, to submit an online application on your behalf.

For the former method, all proposed partners will need to endorse their consent online via BizFile+.

Private Limited Company

Before you incorporate a private limited company in Singapore, there are a couple of minimum requirements worthy of note. You would require a minimum of one director, one secretary, one shareholder, one registered address and minimum paid-up capital of $1.

There are more concerns regarding taxes, foreign members considerations and documents required, which is better suited for discussion in person with one of our experienced personnel. Nevertheless, the appointment of the director(s), shareholder(s), company secretary and registered address is of the utmost importance.

• Appointment of Directors - For your Singapore company registration, you will need a minimum of one resident director, who is either a local citizen or a Singapore permanent resident. If not, he/she can also be a person with a valid employment pass.

  • If you are a foreign firm without any local people to appoint as resident director, you could find a nominee by yourself or through professional firms, such a Morrison Management.

• Company Secretary - As specified under Section 171 of the Singapore Companies Act, within 6 months of your company formation, a qualified company secretary must be appointed. The company secretary has to be a different person from the sole director or shareholder of the company.

• Shareholders - Singapore private limited companies may have shareholders, with a minimum requirement of 1 and a maximum requirement of 50 shareholders. Shareholders can be an individual, another legal entity such as a company or a trust.

  • For Singapore private limited companies, contrary to popular belief, 100% foreign shareholding is allowed.

• You will also need to register a Singapore address as your company’s registered address and have a paid-up capital of minimally $1 Singapore Dollar. This capital represents the initial minimum investment required to starting up your company in Singapore. You can continue to fund your company any time after incorporation.

Naming Your Company

Your company name must be approved by Accounting & Corporate Regulatory Authority (ACRA) before it can be used publicly. You cannot use an official business name which the same as any current company.

Private limited companies will also have the initials “Pte Ltd” at the end, as part of their official company name.

How Will I Know that My Singapore Company Is Registered Successfully?

Once your company is successfully registered, ACRA will email you your company business profile and Certificate of Incorporation (COI). These will serve as proof that your company is officially recognised, and will be sufficient to help you carry out contractual and legal transactions in Singapore.

This will include corporate bank account opening, signing and negotiating office leases, and even subscribing to corporate services, such as telephone and internet services. It will also be required for grant applications in Singapore.

You’ll need to issue share certificates for each of the shareholders registered, and a share register that lets ACRA know how much shares are allotted to the shareholders.

Business Processes After Incorporation

There are a few more miscellaneous business procedures to follow the company is incorporated.

Additional post-registration activities may include:

• Applying for licenses and permits – Some business activities require approval or a license from government authorities.

  • Examples may include private schools, video companies,  money lenders, banks, financial advisory firms, childcare centres, and importers, distributors, wholesalers and retailers of liquor.

• Registering your office hours – You must register your office address and hours, which requires a minimum of three hours per weekday, amounting a minimum of fifteen hours per week.

• Business registration number - The business registration number issued by ACRA must be on all your documents used for official business communications. Just as your personal NRIC number is for your own identification, your business registration number serves the same purpose for your company.

• Customs registration – If your business involves importing or exporting, you must register your company with Singapore customs.

• Goods and services tax registration – You must register for GST if your annual taxable revenue exceeds S$1 million per year. Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. Due to complications, it may be wise to look for filling of GST or GST audit professionals to help you with the computations.

• Registration with the Singapore Central Provident Fund (CPF) Board – CPF is a compulsory pension fund scheme unique to only Singapore. Most foreigners might not be familiar with this practice. The employer and Singapore citizen/permanent resident employee must contribute a percentage of the monthly salary to the fund, on a monthly basis.

At Morrison Management, we provide these services for our clients to help them set up their company as soon as possible.

What is The Easiest Way to Complete a Company Registration in Singapore? 

Here at Morrison Management, we can help you with incorporating your company. From company name reservation, preparation of necessary documents and company incorporation, Morrison can handle all of that for you.

Should you need help with other corporate-related matters such as IRAS tax investigation, tax advisory, corporate recovery or litigation support, find our team and we can best advise you what to do next.

Book a free consultation with us today.