Steps To Register A Company In Singapore
Singapore has been and continues to rank in the top 3 countries for ease of doing business. All analysts point to several reasons for this: ease of doing business, a window to other Asian markets, and low corporate taxes. All this cannot but attract foreign business people from all over the world. As of 2021, more than 500 thousand legal entities were registered in of which more than 353 thousand are local and foreign companies. It is really easy to do business in Singapore; however, there are a few rules to be aware of. Let’s take a look at the most critical steps to start a business in Singapore.
How to set up a company in Singapore? After the jurisdiction for the company’s registration has already been selected and studied, and the business idea has been successfully formulated, it is necessary to decide on the organizational and legal form of the future company. The most popular forms of companies are Private Companies limited by Shares and Exempt Private companies. In addition to them, there are also:
- public limited company
- limited partnership.
You can read more about each form on the ACRA website.
How to register a business in Singapore?
The ease of opening a company in Singapore is already evident because it can be done without even physically traveling to a small Asian country. It is enough to contact a professional agency (local rules do not allow foreign nationals to create a company on the territory of the state independently), with which you can exchange all the documents necessary for the establishment by mail.
How to register a business in Singapore? Self-registration of a company without contacting a professional agency is only possible if all directors of the future company, secretary, and partners have a National Registration Identity Card (NRIC), a work permit issued by government authorities (work permit), or a dependents permit.
In addition, it should be noted that establishing a company is not strictly related to the application for a visa because it is easy to manage a company incorporated from abroad and travel to the country only in specific cases, simply by applying for a tourist visa. Instead, it is necessary to have a director residing, and the previously mentioned professional agencies can provide support in finding this figure.
There is no limit to the number of directors a company can have. Still, they, in addition to being residents, must be at least 18 years old and must not be convicted of bankruptcy or, in any case, corporate governance offenses. In addition, it is clarified that directors do not have to be shareholders of the company.
If, on the other hand, you want to move to this city to manage your own, you need to apply for a work permit or an entrepreneur’s permit. For more information, click here.
Benefits of registering a company in Singapore
Singapore is a small city-state, wealthy, organized, and very open to foreign investors, a real hub to start conquering the Asean region, which has 600 million consumers with an average age of fewer than 35 years. Let’s figure out together what main steps need to be taken to open a company locally.
- From $300 to over 90 thousand. Per capita income data for Singaporean citizens over just over half a century probably best explains explosive growth in the form of a small red dot and, as a consequence, the great interest shown by businessmen from around the world.
- The city-state actually offers a safe environment, open to foreign capital, and is very inclined to cater to business needs. The country also has an excellent infrastructure system and, above all, several tax incentives for those who intend to open an office in the country.
- Among the main advantages, undoubtedly, stands out the business income tax, set at 17% for almost a decade, and the opportunity to take advantage of complete tax exemption for those who create a new business (for the first three years and up to $ 100 thousand. Income).
On the other hand, however, it should be pointed out that setting up a company also entails high costs, including in particular labor costs and office and land rental/purchase costs, which are much higher than in neighboring countries.
Steps to start a business in Singapore
You should answer how to set up a company in Singapore and where to register a company in Singapore? Having learned the answers, you should understand whether you want to open your business in this country. After deciding to open a business, the first and most crucial step is conducting a market analysis. At this stage, you need to understand whether there are already products/services similar to yours on the market. If the answer is yes, then it is essential to discover who your competitors are, what their pricing policy is, and learn of any entry barriers into the industry (many activities require licenses). Depending on the budget, free time, and expertise, you can do it yourself or hire professionals in marketing analysis.
Business plan and budget
The next step to start a business in Singapore. Calculation of a business plan for the future business and project budgeting. A business plan is a set of activities recorded in writing for planning, analyzing, recording, and evaluating business activities. The business plan prescribes the necessary resources, forecasts income and costs, forecasting risks, and fixing time schedules to achieve the set goal.
Choice of organizational and legal form
There are various legal entities (sole proprietorship, partnership, company, and others). For foreigners (except Singaporeans and those with permanent residence status), a Private Limited Company (Pte. Ltd.) or a private limited company is better than others. A foreigner can be 100% shareholder and owner of their company, and the size of the authorized capital will limit the founders’ liability. An essential feature of this type of legal entity is the possibility of obtaining long-term work and dependent visas for living and working.
Choosing a company name and activities
Choosing a company name and activities are necessary steps to register a company in Singapore. Often, people ask themselves how to start a company in Singapore, but you also need to know what kind of company you want to open. It is better to have at least two or three fallbacks for company names if the original version is already taken. Also, suppose you have ambitions to grow your business to an international project. In that case, it is better to conduct an additional check for the presence of already registered trademarks and other countries; this can make your life much easier afterward. Then you need to select the most appropriate business activity codes (at least one and no more than two). Keep in mind that the activity of your business should lie in the plane of the selected codes. Otherwise, problems may arise from difficulties in preparing annual financial statements to close a bank account.
Opening a bank account
Before looking for an answer for how to register a business in Singapore, you need to deal with all documents and invoices.
How to set up a business in Singapore? First, you need to register a legal entity. After successfully registering a legal entity, you can open a corporate bank account with one of the leading banks. The prerequisites list for opening an account may vary depending on the bank, but, as a rule, the following is required:
- business profile of the company
- company constitution
- personal presence of the local director
- personal presence of the foreign director/directors, beneficiary/beneficiaries, and all signers on the bank account with passports
- certified proof of address of residence of all directors/directors, beneficiaries/beneficiaries, and all signatories to the bank account
- signed resolution of the board of directors that authorizes the opening of an account
- check for making the minimum deposit to open an account.
Most of these documents are prepared by your corporate provider. Also, keep in mind that having a legal entity does not guarantee the opening of a bank account because foreign companies bear much greater risks for banks than local businesses. Any dubious transactions (money laundering, working with sanctioned companies and jurisdictions) can lead to significant fines and even revocation of the bank’s license. Therefore, banks impose increased requirements on companies with foreign directors or shareholders in their structure.
Development of the company’s website and pages in social networks
Having dealt with the first steps and answering the question of where to register a company in Singapore, you need to create a website for your company. The importance of a corporate website and the company’s presence on social networks in the modern world can hardly be overestimated. According to statistics, more than 84% of Singaporeans are regular internet users, and 81% conduct online research before making a purchase. Moreover, the presence of a company website is also an essential condition for opening a company bank account.
Renting commercial premises is one of the highest costs for a business. After finding out how to set up a business in Singapore, you will also need to find an office for your company. In addition to the high rental cost, the contract is usually for two years and requires a deposit equal to the cost of 2 months of the rental. Some companies choose a coworking space or an executive office, which are significantly more economical than renting their own office. If you do not plan to reside permanently or do not need a physical office, the options for a registration address or a virtual office are suitable for you.
Obtaining a work permit
If you will live in the country on a long-term basis, engage in daily activities for your company, receive a salary, and pay taxes from it, you need to apply for a work visa. The best types of visas for a foreign businessman are EntrePass and Employment Pass. However, keep in mind that to apply for an Employment Pass for a newly registered company, the registered capital of the company must be at least 70,000 USD (which must be credited to the account after opening the company and bank account), and your monthly salary is at least 4300 USD. In addition, the candidate must have a higher education.
How to start a company in Singapore?
Documents and procedures to be prepared and followed to open a company. There are five basic steps to take:
- Find a local professional agency
- Select a name for the company you are about to create, which the agency will verify
- Enter the local address (residential or commercial) of the registered office (this cannot be a PO Box)
- Collect the following documents: a notarized copy of your passport, proof of your residential address, and fill out a simple questionnaire that will also ask for the name of the director and any shareholders
- Sign the documentation prepared by a professional agency based on the information provided.
Having received all the documentation described above, a professional agency will proceed to create an online company. In general, the entire process should not exceed five business days.
Types of companies
While there are different corporate forms, most Singaporean companies are set up as private limited companies (similar to our srl), which can be 100% foreign. This type of company exempts shareholders from liability for the debts they have incurred, excluding the original paid-up capital.
The minimum paid-up capital for registering a company is one Singapore dollar and can be increased at any time after the company is incorporated. A private limited liability company can have several partners (both individuals and legal entities) from 1 to 50.
Finally, it is clarified that by the provisions of the Singapore Companies Law, each company must, within six months from the date of incorporation, appoint a company secretary or a qualified resident accountant.
Do I need to be present in Singapore to open a company?
Who can register a company in Singapore?
Should you open a company in Singapore?
- Low taxes
- Convenient document flow and reporting
- Investing and helping startups
- Access to international markets
- Immigration opportunities
- Company maintenance costs.
- Expensive real estate.
- High salary expectations.
- Small domestic market.
- Demanding banks.