Singapore is known for its professional business environment and offers huge progression opportunities to the investors. Singapore is said to be one of the most politically stable economies in the world. It is estimated to be one of the few countries in the world where business can be set up with ease and at the same time, the owners can gain significant revenues. Furthermore, its strategic location makes it the perfect hub to gain access to the South East Asian markets. It is difficult to enter markets like Malaysia, Vietnam, Indonesia, and the Philippines without a Singapore setup, which helps ease issues like language constraints and cultural habits of people and businesses in these countries.
Encouraged by the Singapore Government’s liberal foreign direct investment policies, business-friendly corporate tax policies, tax exemptions on foreign-sourced incomes and first-world infrastructure, more and more India companies are making Singapore their incorporation destination.
All companies in Singapore must be registered with the Accounting & Corporate Regulatory Authority (ACRA) and abide by the Companies Act. When setting up business in Singapore, the most common legal form of a foreign investor is the Private Limited by Shares (Pte Ltd). There are many advantages of a private limited company for Foreign Investor. Following are the advantages of company formation in Singapore.
- Strategic Location
Its strategic location ensures top-notch connectivity. Singapore’s port is one of the busiest in the world, and the country is characterized as a prime International Maritime Centre.
- Ideal Place for Global Trade and Commerce
Singapore is located at the heart of the Asia Pacific region, which makes this area an ideal destination for international companies planning to tap major Asian markets including Taiwan, India, China, Malaysia and even Australia.
- Outstanding Tax Benefits
Tax resident status can be enjoyed by foreign companies who set up a Singapore subsidiary company. In other words, they can avail the benefits of tax incentives and exemptions exclusive to local businesses. A newly incorporated parent Company, with at least one individual shareholder that has a minimum of 10% shareholdings, is entitled to the local tax exemption of zero tax for the first S$ 100,000 of its chargeable income.
- Flexible Immigration Policies
The Singapore government provides several tax incentives to certain foreign companies to attract more companies to set up their business operations from Singapore. It also offers long-lasting competitive benefits. Thus, there is an extensive list of foreign investors lined up to set up their Business in Asian Market.
- Ease of Doing Business
The World Bank’s yearly Doing Business Report has ranked Singapore consistently amongst the top in the world for ‘Ease of Doing Business’. Singapore scored high points in areas that are important for entrepreneurs and start-ups; namely access to capital and credit, as well as how effectively insolvencies are resolved.
- Better Infrastructure and Lower Corruption
Start-up companies need all the assistance to achieve their maximum potential. Even the most experienced entrepreneurs cannot operate in an environment that is hostile towards business growth. The difference between Singapore and India, with regards to fostering new businesses, is apparent.
- Availability of Skilled Workforce
Not having the right team is one of the key reasons why a start-up with a good idea can fail. The level of talent available in the country is directly proportional to how skilled the employees of a start-up company can be.
Basic Requirement to open a Singapore Company:
- Minimum 1 Shareholder (Individual/Corporate Entity)
- 1 Singapore Resident Director or foreigner holding valid employment pass
- 1 Singapore Resident Company Secretary
- Minimum Paid-up Capital of S$1 share capital can be held in any currency
- A local registered office address
- A Director or Shareholder can be the same or different person.
- 100% local or foreign shareholdings is also allowed
- Maximum 50 Shareholders for a private limited company
- Director must be a resident of a country or must own an Entrepreneur Pass or a Dependent / Employment Pass.
- Name of the business entity
Process in online and takes from several hours to several days to complete.
Before You Register Company in Singapore
Keep in mind the following company information you’ll need to provide for registering a business in Singapore:
- Company Name:
Provide your company name to be registered in Singapore. This is required to check the availability of the same and to get approval for your new company name before registering a business in Singapore.
- Brief Description of Business Activities :
Provide details of Business Activities to be done through your company in Singapore. Some business activity may require relevant permits/license.
You must have at least one Resident Director in Singapore. This person can be a citizen, permanent resident, or someone with a valid employment pass or dependent pass. You can appoint as many directors, local and foreign, as you want Directors need not be shareholders.
For Private Limited Company, you can have one and 50 shareholders. Shareholders can be individuals or entities, local or foreign. After incorporation, you can issue or transfer shares to shareholders. Your Company is considered as an Exempt Private Company (EPC) if the private company has at most 20 shareholders, and No corporation holds (directly or indirectly) any beneficial interest in the EPC’s shares. EPC will enjoy audit exemption if the Company is fulfilled the small company requirement. A minimum of one shareholder is required. 100% foreign ownership is allowed.
- Company Secretary.
Under the Singapore Companies Act, Section 171, you have six months to appoint a qualified company secretary once you incorporate.
- Paid-up Capital:
Your company must have at least S$1 in paid-up capital, though you can increase the amount at any time after incorporation. Singapore companies do not use authorized capital. It can be Ordinary shares, preference shares or other shares.
- Registered Address:
You need to register a local business address. It can be residential or commercial, but can’t be a post office box. Homeowners are allowed to conduct small-scale businesses using their residential premises.
Following tax exemptions and incentives are given to Singapore Companies:
- Pay no more than 8.5 percent tax on your first S$300,000 of annual profits and 17 percent thereafter.
- Forget about dividend or capital gains taxes.
Registration Procedure and Timeline
Singapore Registrar of Companies is fully computerized. Your application is get submitted in under an hour and the Registrar can normally incorporate your business in the same day. You can reserve your company’s name and register your company at the same time.
- Reserve Your Company Name
The Singapore Government must approve your company name before you can register it. The Company Registrar will oversee the process.
You can reserve your company name for 60 days and can get an extension for another 60 days.
After the Registrar of Companies approves your company name, they will process your incorporation application and documents within a few hours.
- Documents Issued:
- Certificate of Incorporation
The Singapore Company Registrar issues an email confirming the incorporation of the company. It includes the company’s Unique Entity Number (UEM), which is the standard identification number issued by the government to any entity registered in Singapore. A hard copy of the certificate of incorporation can be purchased if required.
- Company Business Profile
The Company Registrar will create a company business profile for your Singapore register company after the company registration process is completed.
Once you have the email notification and business profile, you can proceed with all legal and contractual tasks you need to perform in Singapore. You might need to open a corporate bank account, lease office space or set up your phone and Internet accounts.
- Opening a Corporate Bank Account:
A private limited company is a separate legal entity from its directors and shareholders; therefore it will need its own bank account. Thus, a resolution by the board of directors of the company sanctioning the opening of the account and specifying the signatories to the account is required. You have to choose a bank to open your current account which does not require your physical presence.
- Applying for Business Licenses:
Certain businesses require a special license. The companies that perform following activities will require applying for special Licenses:
- educational institutes
- travel agencies
- financial services
- import/export of goods
- employment agency
- Goods and Service Tax (GST) Registration:
If Company’s annual revenue exceeds S$1 million, the company must register for GST. If your annual revenue is below S$1 million, you don’t have to obtain GST registration.
- Annual Filing Requirements:
Every company must hold its AGM every calendar year, with its financial statements tabled at the AGM for shareholders’ approval. Every company must file its annual returns within one month of its AGM date
- Annual Income Tax Requirements:
All Singapore incorporated companies must appoint an auditor within three months of incorporation; unless the company is exempted from audit requirements There are certain companies which are exempted from compulsory Audit Requirement.
Venture Care can help you with the Formation of a Private Limited Company in Singapore.
If you have any query please comment in the comment box below or call us on 020 65363633