Incorporating a company in Singapore: A step-by-step guide
Congratulations! You’ve decided to incorporate a company in Singapore. Ensure a smooth incorporation process by following these key steps:
Step 1: Decide on your business entity type
First things first, decide on the type of entity you want your business to be:
Sole Proprietorship: Are you the only person in the company, with no plans to hire anyone else? Then a Sole Proprietorship is ideal for you.
This is the simplest type of business to set up. Sole proprietors are not required to audit their accounts or file annual returns with the Accounting and Corporate Regulatory Authority (ACRA).
However, note that there is no legal distinction between the owner and the business. Hence, your personal assets will not be protected from any legal action taken against your company. The company will also not benefit from the corporate tax rate or any other tax incentives for companies.
Partnership: Similar to a Sole Proprietorship where all partners are personally liable for all debts and losses of the partnership. They key difference is that a Partnership comprises of 2 or more (up to a maximum of 20) people.
Private Limited Company: The most common business entity because members are protected from any liabilities of the company. A Private Limited Company (PLC) has a maximum of 50 shareholders and benefits from the corporate tax rate of 17%. In addition, new companies have tax incentives such as 75% tax exemption on the first S$100,000 of chargeable income for their first 3 years of assessment. There is a 50% tax exemption for the next S$100,000 of chargeable income. You can find out more about the tax incentives here.
Although PLCs have more regulations to follow, such as filing annual returns and appointing a director and company secretary, it is ideal for those who are looking to raise funds and grow their business.
Step 2: Fulfil company incorporation requirements
In order to incorporate a company in Singapore, you need to satisfy the following requirements:
- Minimum 1 shareholder
- Minimum 1 director who is ordinarily resident in Singapore
- 1 company secretary who is ordinarily resident in Singapore (to be appointed within 6 months of incorporation)
- 1 auditor (to be appointed within 3 months of incorporation), unless the company is exempt from audit
- Minimum paid-up capital (share capital) of $1 SGD, to be deposited into your corporate bank account upon incorporation
- Registered address in Singapore that will serve as your company address
Step 3: Prepare the information needed
Make sure you have the following information and documents ready before registering your company:
- Company name: Choose a name for your business. You can check if the name is available by searching for it on BizFile.
- Business activity: You can select up to a maximum of 2 Singapore Standard Industrial Classification (SSIC) codes corresponding to your business activities.
- Details of shareholders and directors (and company secretary, if you already have one)
- Registered Singapore address: This does not need to be where your business is conducted
- Company constitution: This mandatory document outlines the rules and regulations of the company. ACRA provides a Model Constitution if you do not wish to draft it yourself.
Step 4: Register the company
Log in to BizFile using your SingPass to submit your documents and register the company. It will cost $300 SGD for registration and $15 SGD for the company name application.
If all the required documents and information are in place, the company can be incorporated within the same day. You will then receive the following:
- Certificate of incorporation: ACRA will send you an email confirmation with your Unique Entity Number (UEN), or your company’s registration number. This serves as your official certificate of incorporation.
- Business profile: A free profile of your business that contains all the company details you provided in your registration.
Your business profile and certificate of incorporation are needed to open a corporate bank account, or to apply for licenses and permits.
Note for foreigners:
If you do not hold Permanent Residency (PR), an Employment Pass (EP) or EntrePass, you cannot self-register your company. This is also the case for foreigners who are setting up a branch office or subsidiary of a foreign company in Singapore.
To register your company, you need to appoint a professional services firm in Singapore to submit the application for you. The firm can also help you fulfil requirements such as having a resident director and company secretary, as well as a registered local office address.
You do not need a work visa to operate your company from overseas. However, if you wish to move to Singapore to manage the company, you need to apply for an EP or EntrePass. Once you obtain a Singapore work visa, you can act as the director of the company.
Shaft Ph provides company incorporation services and can help you fulfil the resident director and company secretary requirement on a temporary or long-term basis.
Get in touch to enquire about how we can help you.
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