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Singapore is a great place to do business. It has a strong economy, efficient government, and low taxes. In addition, Singapore is located in the heart of Southeast Asia, making it an ideal base for companies doing business in the region. If you’re thinking about open a company in Singapore, there are a few things you need to know. In this article, we will walk you through the process of setting up a company in Singapore, from choosing a business structure to obtaining your company license.
Step 1: Choose What Kind of Business Entity to Form
When planning to open a company in Singapore, it is important to understand the different kinds of business entities, and which ones are best suited for the goals of your company. There are currently 7 types of business types in Singapore:
Exempt private companies are the most common type of company in Singapore. Its names typically end in “pte ltd” and it can have a maximum of 20 shareholders. With this type of company, no shareholder is a corporation and it has a share capital.
Private companies limited by shares are similar to exempt private companies, but they can have a maximum of 50 shareholders and those shareholders can be corporations.
Public companies limited by shares, instead, usually have names ending in “Ltd” and can have over 50 shareholders. They may raise capital by offering shares to the public, but in order to do so they must first register a prospectus with the Monetary Authority of Singapore. Shareholder liability towards creditors is only limited to the capital originally invested by the shareholders.
Public companies limited by guarantee also have names typically ending in “Ltd”, however, they tend to carry out non-profit work of national or public interest. They have no share capital, and liability is limited to the amount undertaken to contribute to the assets of the company in the event of winding up. The specific amount is determined during the company’s constitution.
Unlimited private companies, on the other hand, are almost a different category entirely. It is a hybrid company incorporated with or without share capital and it typically has the word “Unlimited” in its name.
Unlimited exempt private companies can have a total of 20 shareholders, but none of them can be a corporation.
Finally, unlimited public companies may have over 50 shareholders. These shareholders can be corporations.
Step 2: Choose a Company Name
In order to open a company in Singapore, businesses are legally required to register their company with ACRA. This can be achieved by using ACRA’s business portal Bizfile.
When selecting a name for your company, there are rules that must be observed. Firstly, companies may not use a preexisting name. Also, companies should not pick a name that contains undesirable or prohibited words.
When submitting a name application, you will also be asked to select the most relevant Singapore Standard Industrial Classification code (SSIC) for your company. This specifies what activities your company will be engaging in.
Furthermore, you will be asked to indicate whether you would like your company name to be in Singapore’s four official languages: English, Mandarin, Malay or Tamil.
Step 3: Understand Singapore’s Company Registration Requirements
Singapore’s company registration process is relatively simple. All that is needed is a Singapore-based registered address, at least one Singapore Citizen or Singapore Permanent Resident director, at least one shareholder (which can be the same person as the director), and a Singapore-based company secretary.
Singapore-Based Registered Address
All companies must have a registered address in Singapore that cannot be a PO Box. All legal documents must be kept at the address. You may provide your home address as the registered address when first incorporating your company, but you will need to update it later.
A company must have at least one Singapore Citizen or Foreign Singapore Permanent Resident director. A company director is in charge of managing the affairs of the company and planning the company’s strategic direction. A company director is required under the Companies Act. The act seeks to ensure the accurate and timely keeping of records, the preparation of financial statements (if applicable) and the compliance with corporate filings and other disclosures. The director also has the legal and ethical duty to advance the interests of the company they have been entrusted with and to act honestly in exercising their powers. This person must be above the age of 18 and cannot be an undischarged bankrupt. Furthermore, corporate directors are not allowed, meaning that the director must be an individual, not the company itself.
For private companies, there can be a minimum of one shareholder, which can be the same person as the director. For public companies, there must be a minimum of two shareholders. Corporate shareholders are allowed for both private and public companies. This means that the shareholder need not be an individual, but another company. In addition to this, up to 100% of shareholding can be foreigners.
Your company must appoint a Singapore-based company secretary within six months of incorporation. The company secretary must be a Singapore Citizen, a Singapore Permanent Resident, or an EntrePass holder. The company secretary cannot also be the director of the company. Company secretaries are responsible for making sure that your company complies with regulatory obligations and filings. When incorporating a company in Singapore, Top FDI can provide company secretary services.
Step 4: Set Up a Registered Office Address and Open a Bank Account
Before being able to officially launch your company in Singapore, you must set up a registered office address. This is the address that will be used for all legal documents and correspondence. It cannot be a PO Box.
You will also need to open a corporate bank account in Singapore. This account is separate from any personal accounts and is used for business transactions only. Most banks in Singapore require that you visit the branch in person to open an account.
To open a bank account, you will need the following documents:
- Certificate of Incorporation;
- Business Profile;
- Singapore NRIC (for Singapore Citizens and Singapore Permanent Residents) or Passport (for foreigners);
- Board Resolution authorizing the person to open the account on behalf of the company.
Step 5: Sign the Incorporation Documents
After you have completed the previous steps, it is not time to prepare to sign the necessary incorporation documents to open a company in Singapore. The first document is the Memorandum and Articles of Association (MAA). The MAA is a legal document that outlines the rules and regulations that the company and shareholders must follow. Singapore law requires that all companies have an MAA.
The second document is the Statement by Subscribers and Directors. This document lists the shareholders and directors of the company, as well as their addresses, nationalities, and occupations. All shareholders and directors must sign this document.
The third document is the Notice of Situation of Registered Office and Appointment of Company Secretary. This document provides the registered address of your Singapore company as well as the name and particulars of the company secretary.
After the documents are signed, they must be lodged with Singapore’s Accounting and Corporate Regulatory Authority (ACRA) along with the required filing fees. The ACRA will then review the documents and, once they are approved, will issue a Certificate of Incorporation.
Step 6: Comply with Tax Filing Requirements
You’ve officially open a company in Singapore, congratulations! Now, however, you must understand how to comply with the tax filing requirements for your company. All Singapore-based companies are required to file annual taxes. The tax filing deadline is December 31st, and the tax year runs from January 1st to December 31st.
To file your company’s taxes, you will need to submit a Corporate Income Tax Return (CITR). This document must detail the company’s income and expenses for the year. Corporate income tax in Singapore is imposed at a flat rate of 17%. Exemptions may apply for a variety of circumstances, including a three-year start-up exemption for qualifying companies.
It is important to note that Singapore does not have a capital gains tax.
To Sum up: How to open a Company in Singapore
Singapore is a great place to start or expand a business. The Singaporean government has created an environment that is conducive to business growth, and there are many resources available to help entrepreneurs get their businesses off the ground. In addition, Singapore has a large and diverse population, making it an ideal market for many types of businesses. If you’re thinking of starting or expanding your company in Singapore, be sure to do your research and take advantage of the many resources available to you. With hard work and planning, you can make your business thrive in this vibrant and dynamic country.