How to set up a private limited company in Singapore?
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Singapore is distinguished by a favorable investment climate, high standard of living, and economic freedom, which attracts many business people worldwide. Due to its straightforward structure, setting up a limited company is especially popular, which is used in the field where it is possible to use the Tax Abolition Agreement, for example, a holding company or export-import business.
Registering a firm is not only profitable but also prestigious. To register a firm, it is necessary to study many regulations of both local and international importance to do this correctly and competently. Of course, you can do this process yourself, or you can trust professionals who have many years of experience in the field of international business and know all the pitfalls in this area.
Setting up a limited company will help you save time and effort by directing them to your business development.
Where is Pte Ltd used? Firms of this type can act as independent business entities or be involved in intermediary trading schemes. They are allowed to engage in the following activities:
- holding activities with ownership of corporate rights and dividend receipts.
- lending money and receiving interest
- consulting, legal and similar services
- activities in the field of IT technologies, software development
- advertising activity
- investment activities
- ownership of intellectual property rights
- trading activities (export / import)
- organization of cargo transportation.
Basic requirements for a Pte Ltd
If you are wondering how you can open a Pte Ltd, you first need to understand the demands for such firms. Several requirements are put forward to Limited Liability Companies, including:
- registration address is required
- local registration secretary and agent
- the presence of at least one director
- the ability to conduct activities both outside and on the state’s territory.
Access to information on Pte Ltd. The owner’s data is not visible in the registers. The full statement of the firm contains data on shareholders.
Register a firm address. According to the requirements, firms that operate must have a full-fledged real office. The specialists are ready to provide the registration address for the Singapore LLC, which will function as a legal one.
How to set up a firm? In this country, the activities of international firms are strictly controlled. Assume that it is not possible to prove the reality of the transaction or the payment of tax on the transaction by the non-resident partner in the country of registration. In that case, you should refrain from cooperating with firms from low-tax or offshore countries on the black list. In such cases, a company will have to pay tax on the profits resulting from the transaction at the standard rate of 17%. In addition, if the transaction is not proven, the firm will be charged with tax evasion. A firm will be required to pay 17% tax on all funds for this operation.
The director of a private firm is responsible for the firm’s activities up to and including imprisonment. Therefore, when registering a private limited company in Singapore, a deposit of USD 1500 is required. This payment acts as insurance. From this amount, the fines received by the company are calculated. When the company is closed, the deposit is returned in full (if there were no penalties), or the remaining money is given (after calculating the penalties).
What is Pte ltd? Pte Ltd comes from a private limited company. The abbreviation is also allowed in some offshore jurisdictions to indicate limited liability. Analog of LTD.
Private limited company Singapore definition. Limited company, in which the liability of its members for the company’s debts. The capital contributed by them can limit it; in this case, the extent of partners’ liability in the company’s liquidation is bounded to the amount (if any) of non-payment of their shares. This definition is the most common of a registered private limited company in Singapore. Another option for liability could be bounded by a guarantee. In this case, their liability is bounded to a certain amount which members are obliged to pay in case of liquidation of the company/community. A similar procedure is typical for societies, clubs, or professional associations.
Tax Incentives for Singapore Pte Ltd
When you’ve got more about Pte ltd, you also have to know about taxes and benefits for limited liability firms in that country. Firms can qualify for tax breaks if the following criteria accompany their activity:
- the firm is registered the company is a tax resident (this means that the management and control bodies are in the country)
- the company is not engaged in the following activities:
- investment and holding activities
- construction of real estate for further sale
- investment in construction.
- the firm has no more than 20 shareholders who:
- individuals who own shares directly and in their interests (i.e., are not nominees)
If you have such criteria, you can register a firm that is exempt from income tax according to the following scheme:
- for the first SGD 100,000 – 0% tax
- for the next SGD 200,000 – 50% tax
- over the first SGD 300,000 – 17% tax.
Thus, limited liability companies with profits of up to SGD 200,000 are fully tax-exempt.
Taxable income in Singapore. Taxable income includes:
- income received from any activity
- investment income (dividends, interest, royalties)
- income derived from the use of the property.
Pte Ltd pays income tax:
- listed or retrieved from Singapore
- received outside Singapore.
In addition, income that was earned outside the country is also taxed if:
- income entered the territory of this country
- the income was used to pay off debt and liabilities that arose as a result of activities
- the income was used to buy a movable property that was brought into the country.
Structure of Pte Ltd. How do I open a limited company?
- Director (at least one). A mandatory requirement for the composition of directors an individual resident of this country. The rest of the participants can be both individuals and legal entities without special requirements for residency.
- Shareholder. An individual or legal entity can be appointed to this position, regardless of residency.
- Beneficiary (ultimate owner of the company‘s assets). Often, to hide information about the beneficiary, they use the services of a nominee shareholder, who operates under the English trust law. The nominee shareholder prepares a declaration of trust, where they unsubscribe from all the company’s assets in favor of the real owner. It is essential to note that the complete Company Statement.
- Secretary. This position is required. The main requirement for her is residency in Singapore.
- Registration agent. A private limited company is required to have a local agent.
After registering a firm, you must have the documents:
- Registration certificate
- Articles of Association and Articles of Association
- full Extract from the Register of the firm
- minutes of the first meeting of directors
- share certificate
- company’s stamp.
If the services of a nominee director are used, the following documents need submitting:
- general power of attorney
- rejection letter
- nominal agreement
If the services of a nominee shareholder are used, the following documents need submitting:
- trust declaration
- signed blank transfer instrument
- nominal agreement.