Learn how to set up a business in Singapore efficiently with steps, regulations, and tax benefits explained. Explore the process and incentives here.
Under Regulator: Accounting and Corporate Regulatory Authority (ACRA)
STEP 1: Choose the Business Entity.
STEP 2: Apply for Name Reservation.
STEP 3: Set Up of Company within 120 days of Approval.
STEP 4: Open a Bank Account and take necessary Business Registration and License.
STEP 5: Sign Up for Employee Compensation Insurance at an Insurance Agency.
Registration online with ACRA including company name search and filing the company incorporation and tax number (GST)
The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of business, public accountants and corporate service providers in Singapore. Incorporation is done through Bizfile+, an electronic filing system.
Since 2007, Bizfile platform (further enhanced to Bizfile+) has been providing one-stop business facilitation services to customers at the point of registration. These services include reserving domain names, goods and services tax (GST) registration, subscribing for the relevant e-newsletter and registering for e-service alerts on latest government procurement opportunities, activating Customs Account and application for a corporate bank account.
The process starts with new company name application. The application for approval and reservation of a company name is to be submitted online at bizfile.gov.sg. An application fee of SGD 15 is payable for each approved company name. Once the application is submitted, the applicant can select to either pay the fee and continue with the incorporation later, or to immediately proceed to incorporation application.
Name application can be approved within a few minutes from payment if the name is available. However, it may take between 14 working days to 2 months if the application needs to be referred to another agency for approval or review. The lodger can proceed to register the business immediately after the name application is approved.
Once a name has been approved, it will be reserved for 120 days.
As of 2 June 2017, every newly incorporated business receives a free copy of its Business Profile upon the successful filling up of the incorporation forms and paying the incorporation fee. The processing time is about 15 minutes from the time of successful submission of all documents and all information, and the registration fee payable is SGD 300. The ACRA will issue a notice of incorporation via electronic mail to the law firm or professional firm engaged for the purposes of incorporation upon the successful incorporation of the company together with the registration number of the company.
The registration with the Inland Revenue Authority of Singapore (IRAS) for the goods and services tax (GST) when (a) its annual taxable turnover exceeds SGD 1 million can be done using the same online forms.
Points to be remembered
The private limited company is governed by the Singapore Companies Act, and must comply with its laws under ACRA and the Inland Revenue Authority of Singapore (IRAS). Designations include:
- Company name – Must be approved by the ACRA.
- Shareholders – Minimum of one.
- Directors – At least one director must reside in Singapore.
- Company Secretary – Also must be a Singapore resident.
- Paid-up capital – At least S$1
- Registered address – A physical office address is required.
Sign up for Employee Compensation Insurance at an insurance agency:
Agency: Insurance Agency
Under Section 23(1) of the Work Injury Compensation Act (WICA), Chapter 354, of Singapore, every employer shall insure and maintain insurance under one or more approved policies with an insurer against all liabilities which the company may incur under the provisions of this Act in respect of any employee employed by the company unless the Minister, by notification in the Gazette, waives the requirement of such insurance in relation to any employer.
The purchase of Workman Injury Compensation Insurance (WICI) has been incorporated into ACRA’s online registration process as of November 2017. Business owners can now apply for WICI from NTUC Income (via ACRA’s online Bizfile+ system) immediately after completing the online registration process. Time and cost may depend on the arrangement between the company and the insurance agency.
DO WE HAVE ANY TAX BENEFIT OF SETTING UP BUSINESS IN SINGAPORE
When starting a business in Asia, one of the most important benefits of a registered company in Singapore is its low tax rates. In Singapore, you don’t have to pay taxes on the first SGD 100,000 profit.
And the regime is quite pro-entrepreneur, with a strong start-up ecosystem. Furthermore, Singapore company registration is useful for establishing holding companies, regional headquarters, international trading companies, and import-export hubs.
Singapore also offers several tax benefits for business owners, such as a no-tax environment for small businesses and the absence of a corporate income tax.
MAJOR ADDITIONAL BENEFITS OF GETTING BUSINESS REGISTRATION IN SINGAPORE
1. Speedy Setting up of Business in Singapore
2. Telecommunications are Great
3. Tax Incentive Scheme for new and small Business
4. Economic Freedom
WHAT ARE THE TAXES IN SINGAPORE IF YOU OPEN A BUSINESS THERE?
If you have a registered company in Singapore, you must pay corporate taxes of 17 per cent of the total income earned. This tax rate applies to both local and foreign companies. A company’s tax residency depends on where the board of directors and management meetings are held and whether or not the key management personnel is located in Singapore. Here are some examples of how this is determined. A company should maintain the headquarters of its management in Singapore. Its board and management should meet in Singapore.
In addition to the above, companies may also take advantage of the Pioneer Services Companies Incentives, which grant foreign investors tax exemptions of up to 75% of their chargeable income. Companies can also apply for the Development and Expansion Incentive, which grants them a discounted tax rate of up to 5 per cent. The benefit of a Singapore tax residence extends to broader Asian markets. A comprehensive free trade agreement with several countries provides easy access to markets throughout Asia.
Corporate taxation in Singapore is a simple one-tier system. The tax paid by the company is the final tax, and dividends are tax-free in the hands of shareholders. However, considering tax exemption schemes, Singapore’s corporate tax system is more complicated. If your company is newly incorporated, it may qualify for the Start-up Tax Exemption Scheme for its first three years. Of course, to receive this benefit, you must be a Singapore tax resident during these years.
Author Bio
