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Client Queries for Incorporation of Company in Singapore

  1. What are the most popular business forms in Singapore?
    The several possible business structures for individuals or international enterprises who wish to do business in Singapore are:
    • Sole proprietorship/sole trader: This is the default business form in Singapore. It is usually only available to Singapore residents. As there is no separation between the business and the individual, they are taxed at personal income tax rates, and the individual has full legal and tax liability.
    • Partnership: In a general partnership, individuals join together to run a business in Singapore. There must be at least two partners, and all have joint and several liability for the conduct of the business.
    • Limited partnership: In a limited partnership, there is at least one 'general partner' with full liability, but there can also be one or more partners with limited liability.
    • Limited liability partnership: In a limited liability partnership (LLP), all partners have limited liability.
    • Private limited company: In a private limited company, the business has limited liability and is taxed according to corporate income tax rates. This is the most commonly chosen business form for international businesses setting up in Singapore. There are several different types of private companies in Singapore, which we discuss further below.
  2. Which one is considered as Best Entity to Incorporate and Its Benefits?
    • Private Limited Company: Generally preferred for most businesses due to limited liability protection, tax benefits, and easier access to funding.
    • Benefits: Limited liability, credibility, favorable tax treatment, and easier to raise capital.
  3. What are the different types of private companies in Singapore?
    The types of private companies in Singapore are:
    • An exempt private company: This is the most popular corporate form in Singapore. It allows a maximum of 20 shareholders and does not allow for corporate shareholders.
    • Private company limited by shares: A private company that permits up to 50 shareholders, and allows for corporate shareholders.
    • Private company limited by guarantee: Has no share capital or shareholders, and is usually set up for charitable purposes.
  4. Do directors of Singapore companies need to be Singapore residents?
    All directors of Singapore private limited companies must meet certain criteria It includes that
    • At least one director must be a natural person, A shareholder who is a natural person can also be a director.
    • At least 18 years of age, and
    • Not have been disqualified from directorship (for example, they cannot be bankrupt or have convictions for dishonesty).
    • In addition, every private limited company must have one director who is a local resident of Singapore and is also a citizen, a permanent resident, or a holder of an EntrePass.
  5. Can foreign companies be directors of a Singapore company?
    All directors of Singapore companies must be natural persons, rather than corporations. However, that foreign companies can appoint an individual to act for them as their nominee ('nominee director'). A nominee director is a full legal director and has the same powers and responsibilities under Singapore company law as any other director.
    When a nominee director is appointed, there will be a contract between the company and the nominee director specifying their obligations to the company.
  6. Do Singapore companies need a company secretary?
    All Singapore companies must appoint a company secretary within six months of incorporation. The company secretary is responsible for dealing with the Singapore regulatory authorities, filing necessary documentation, and advising directors on their compliance and legal responsibilities. It is common for a professional company secretary firm to be used for this in Singapore.
  7. How many shareholders must a Singapore company have?
    A Singapore-exempt private limited company must have at least one shareholder and a maximum of 20.
    For a private company limited by shares, up to 50 shareholders are permitted.
    This shareholder must be a holder of at least one ordinary share with full voting rights.
  8. Can I start a Singapore company with more than 50 shareholders?
    Yes, but it must be a public company, not a private company limited by shares.
  9. What is the minimum share capital in Singapore?
    The minimum share capital in a private limited company in Singapore is S$ 1 dollar in value, but it can be paid in any currency.
  10. Are non-voting shares permitted in Singapore?
    Yes, but at least one share must be a share with full voting rights.
  11. Can foreign individuals be shareholders in the Singapore company?
    All shareholders in a Singapore company can be foreigners.
  12. Can foreign companies be shareholders in a Singapore company?
    Yes, foreign companies, including corporate trustees of foreign trusts, can be the shareholders of Singapore private companies limited by shares (but not exempt private companies). However, that on the application for Singapore incorporation, full details of beneficial ownership must be provided to the Accounting and Corporate Regulatory Authority.
  13. Do I need approval from the Singapore regulatory authorities for my company name?
    Yes. Before applying for incorporation those wishing to start a Singapore company should apply to the online portal for approval of the name of their company. The company name must not be a name in use by another Singapore company.
  14. Does approval of my Singapore company name provide me with a trademark in that name?
    Approval of a name gives the holder no intellectual property rights in that name under Singapore law.
  15. Which companies in Singapore have to pay Singapore corporate income tax?
    Corporate Tax:Singapore has a corporate tax rate of 17%. However, there are various tax exemptions and incentives available for new startups.
    In addition, any international enterprise that has a 'permanent establishment' in Singapore is required to pay all corporate income taxes there.
    A permanent establishment will generally exist where an international business has a fixed place of business in Singapore where it carries out its core business.
  16. Does my company also have to pay GST in Singapore?
    If your Singapore company is projected to have a annual taxable turnover of S$ 1,000,000 then it must register for GST. The current GST rate is 7 percent.
  17. What are the Basic Requirements for Incorporating a Company in Singapore?
    • Company Name: Must be unique and approved by the Accounting and Corporate Regulatory Authority (ACRA).
    • Directors: At least one director must be a Singapore resident (a Singapore citizen, permanent resident, or an Employment Pass holder). There is no limit on the number of directors.
    • Shareholders: At least one shareholder, who can be a resident or non-resident. The maximum number of shareholders is 50.
    • Registered Address: Must be a physical address in Singapore, not a P.O. Box.
    • Share Capital: Minimum authorized capital of SGD 1.
    • Company Secretary: Must appoint a qualified company secretary within 6 months of incorporation.
  18. What are the minimum Number of Directors and Shareholders requirements?
    • Directors: At least one director must be a Singapore resident.
    • Shareholders: Minimum of one shareholder, with a maximum of 50.
  19. What are the Minimum Share Capital Requirement?
    • Minimum Authorized Capital: SGD 1, though you can opt to have a higher amount if you prefer.
  20. What are the Documents Required to Incorporate a Company?
    • Identification: Passport and proof of address a bank reference letter for no-resident directors and shareholders.
    • Company Name: Proposed name of the company.
    • Company Constitution: The company's Articles of Association.
    • Registered Address: Proof of the registered office address.
    • Director's Consent: Consent to act as a director.
    • Shareholder's Consent: Consent to act as a shareholder.
  21. Who is the Authority for Incorporation of Company in Singapore?
    • Accounting and Corporate Regulatory Authority (ACRA): The national regulator of business entities and public accountants.
  22. How much time does it takes to to Complete the Incorporation Process?
    Typically 1-2 Days If all documents are in order and the name is approved. If a company name is selected according to the ACRA's rules, it may be approved in less than an hour.
  23. What are the various Costs Associated with Incorporating a Company?
    • Incorporation Fees: Approximately SGD 300 for registration with ACRA.
    • Professional Fees: For services such as legal, accounting, and company secretarial services.
    • Additional Costs: May include the cost of a company secretary, registered office address, and initial share capital.
  24. Is it mandatory to have Singapore Address of company to be incorporated in Singapore?
    You must have a local registered office address in Singapore.
  25. Are there any mandatory Bank Account Opening Requirement?
    Having a business bank account is essential for managing company finances and is typically required for business operations but not mandatory.
  26. What are the Ongoing Obligations after incorporation of company?
    • Annual Filing: Submit annual returns to ACRA and hold annual general meetings (AGMs).
    • Tax Filings: File annual tax returns with the Inland Revenue Authority of Singapore (IRAS).
    • Compliance: Maintain proper accounting records, appoint and update company secretary, and keep your company's information up-to-date with ACRA.
 
     
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