Registration Update on Establishing Business Entities in Singapore
In the global era, one can register their businesses entity in various non-native destinations. Formation of a business company in foreign destinations endears tremendous skills and experiences. It now is a common practise to set up businesses globally.
Singapore is one of the most natural and upcoming destination which is known for its unblemished image in corporate regulations and compliances. Recent increase in demand to set up business entities in Singapore has been recognized as one of the favourite countries and harbour for establishment and setting of business companies.
Registration of companies in Singapore is swift and accelerated by less paperwork and is uncomplicated. The economy of the country is stable and there is no currency control. The tax laws are not stringent and business friendly, with a favourable geographical location, and easy availability of highly skilled workforce and naught corruption.
Singapore as a country has a free market economy based on finance, trade, and manufacturing. About 75% of country’s GDP is from the Service Sector with a low inflation rate.
It allows non-natives to own 100% shares in any business entity registered in the country, without any local shareholder. There is no limit on repatriation of funds from Singapore or on either bringing in or taking out the foreign currencies.
This article necessitates an overview and compliances to register a business company in Singapore.
Some of the essential information to set up a business company in Singapore to be taken into consideration has been enumerated below.
- Relevant Act- The law under which the companies are registered is Companies Act, 1967 and the relevant Government Authority is ACRA (Accounting and Corporate Regulatory Authority).
- Types of Business Entities– You can form a Limited Company, Private Limited PTE Company, LLP, LLC.
- Taxation– Tax regime is simple and favourable. No tax on dividends or on capital gains from a business is applicable. For the first income of S$100k, the tax liability is zero. Corporate tax is 17%. It has DTAA with 50 countries.
- Basic information/ documents– The basic information and documents required for registration of a company in Singapore are- Proposed name, main objects, capital, directors and shareholders. KYC (copy of passport and latest utility bill) of the promoters are required. In case the shareholder is a corporate, then the certificate of incorporation, Memorandum & articles of association, tax number and the organisation structure of the corporate are required.
- Director– The minimum number of director is 1 (one). There must be a local Director, and normally the local law firms provide nominee director on payment of annual fee. The meeting of board of directors can be held anywhere in world.
- Share capital– There is no limit on the minimum share capital; the share capital can be as low as S$ 1.
- Bank Account- Most of the international banks have branches in Singapore. Bank account can be opened in multiple currencies. Normally, physical presence of the authorized signatory is required to open the bank account in Singapore.
- Accounts and audit– Statutory Audit is required in Singapore registered companies with few exemptions.
A summary of the important provisions are itemized in the table as stated below.
| Singapore-Entity | |
| Relevant Act | Companies Act, 1967 |
| Concerned Government Department | ACRA (Accounting and Corporate Regulatory Authority) |
| Type of entities | Limited Company, Private Limited PTE Company, LLP, LLC |
| Requirements- (Information) | |
| Proposed name | |
| proposed objects | |
| Directors name | |
| Shareholder’s name | |
| shareholding pattern | |
| Bank Account | |
| Banks | Can be opened in any bank-some of the banks in Singapore are- UOB, OCBC Bank, HSBC Bank, Maybank, Standard Chartered, DBS Bank, POSB |
| Opening of bank account | KYC documents of the company (certificate of incorporation, Memorandum and the Bye laws, list of directors, list of shareholders), KYC documents of the authorised signatory (passport, utility bill, passport size photograph, Organisation structure, business Plan |
| Requirement for visit to Singapore | foreign or non-resident business owners need to visit the banks to open corporate Bank account in Singapore. |
| Currency | Bank account can be opened in any currency- US$, S$, GBP, Euro |
| Time period to set up the entity | |
| 3-7 working days, once all the documents/ information received | |
| Documents sample to set up the entity | |
| Subscriber’s sheet | |
| Consent letters | |
| Organisation Structure | |
| Annual Maintenance | |
| Local Nominee Director | |
| Registered office address | |
| Secretarial records | |
| Maintenance of accounts | |
| Audit of account (exemptions available) | |
| Filing tax return with ACRA | |
| Filing of Annual Return | |
| Cost heads | |
| Initial Set up cost | |
| Annual Cost- Accounts- | |
| Annual Cost- Secretarial | |
| Annual Cost- Local Nominee Director | |
| Annual Cost- Registered office address | |
| Taxation | |
| Corporate Tax | Varies, 8.5% on first S$ 200,000. The effective Corporate Income Tax (CIT) rate for subsidiary company profits up to S$200,000 is 8.5 percent, and a flat rate of 17 per cent for profits above S$200,000. |
| Double Taxation Access | Yes |
| Directors/ Manager | |
| Minimum number of Directors | 1 (One) |
| Requirement of local resident director | Yes. Singapore company require a minimum of one resident Singapore Director. A resident is defined as a Singapore Citizen, a Singaporean Permanent Resident, or a person who has been issued an EntrePass or Employment Pass is mandatory. Can be provided by the local law firms on payment of annual fee which varies from US$ 2000 to 5000 per year. |
| Location of Meetings | Anywhere |
| Publicly accessible records | Yes |
| Share capital | |
| Minimum number of shareholders | 1 (One) |
| Minimum Share Capital | S$ 1 |
| Standard currency | S$ |
| Permitted currency | Any |
| Company Secretary | |
| Required | Yes |
| Local/ qualified | yes |
| Accounts | |
| Required to prepare | yes |
| Audit requirement | yes, but there are exemptions |
| Requirement to file accounts | yes |
| Public accissible accounts | yes |
| others | |
| Requirement of Registered Office | Yes |
| Requirement to file Annual Return | Yes |
| Change of domicile permitted | No |
| Documents/ Information needed | |
| For Directors | KYC of Directors- Passport copy, latest utility bill, passport size photograph |
| Shareholders (if individual) | KYC of Directors- Passport copy, latest utility bill, passport size photograph |
| Shareholders (if corporate) | Resolution of the Board of Directors of shareholder, certificate of incorporation, Memorandum and Bye laws, tax number, list of directors, list of shareholders. Authority in favour of a person to sign the incorporation documents, A Business Plan |
| Deliverables | |
| on incorporation | Biz File, certificate of incorporation, Memorandum and bye laws, Register of Director/ Shareholders, Share Certificate |
Conclusion– Singapore is a developed country and is ideal for expanding your business with excellent infrastructure and highly skilled workforce for all requirements. Any business organization, planning establishment of businesses in Asia, the ideal choice would be Singapore being a prospective economy and prime location.
Disclaimer: This article has been prepared in good faith on the basis of information available on the date of publication without any independent verification. The Author does not guarantee or warrant the accuracy, reliability, completeness or currency of the information in this publication nor its usefulness in achieving any purpose. The Author will not be liable for any loss, damage, cost or expenses incurred or arising by reason of any person using or relying on information in this publication. Readers are requested to consult a professional before taking any action.
(Author – Sonika Bharati, FCS, LL.B. is a Company Secretary in Practice from Delhi and can be contacted at [email protected])
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