Top 8 FAQs In Incorporating a Company in Singapore, Answered

Singapore’s bustling economy and business-friendly climate make it an attractive destination for entrepreneurs worldwide. With a stable political environment, strategic location for trade, and a reputation for ease of doing business, understanding how to navigate the process of company incorporation is crucial for anyone looking to establish a foothold in this thriving marketplace.

Straight to the point, getting to grips with the legalities, financial regulations, and administrative tasks of setting up a company in Singapore is key to a smooth business launch. That’s why we’ve put together a comprehensive FAQ guide to answer all your questions about incorporating a company in Singapore. It’s your one-stop resource for clear, concise, and essential information to help streamline your business setup journey.

The legal requirements for incorporating a company in Singapore are straightforward yet stringent, ensuring a transparent business environment. Key requirements include a company name approved by the Accounting and Corporate Regulatory Authority (ACRA), at least one shareholder, a minimum of one resident director, a company secretary within six months of incorporation, and a registered physical office address in Singapore.

Starting a company in Singapore is made accessible with a surprisingly low minimum capital requirement. The minimum paid-up capital to start a private limited company in Singapore is just S$1 or its equivalent in any currency. This low threshold is designed to encourage entrepreneurship and make it as easy as possible for both local and foreign business owners to set up a new company.

It’s worth noting, however, that certain types of businesses or industries may require a higher paid-up capital due to licensing or regulatory requirements. Additionally, while the initial requirement is minimal, businesses should be adequately capitalised to sustain their operations.

Registering a company in Singapore is a straightforward process managed online through the Accounting and Corporate Regulatory Authority’s (ACRA) BizFile+ system. It begins with the approval of the company name, ensuring it’s unique and non-infringing on existing trademarks or company names. Following this, the necessary documentation must be prepared, including the company’s Constitution, and details of directors, shareholders, and the company secretary. At least one director must be a resident of Singapore, and there should be at least one shareholder, which could be the same person. The company must also provide a local registered address for official communications.

Once these details are finalised, the application is submitted online via BizFile+, accompanied by the payment of a nominal registration fee. If the application is in order, ACRA typically processes and incorporates the company within minutes, issuing a unique Business Registration Number. This swift process may take longer if the application requires additional review by other government agencies. Post-registration, companies may need to take further steps such as opening a corporate bank account, applying for necessary business licenses, registering for Goods and Services Tax (GST), and setting up financial systems, depending on their business activities and requirements.

Yes, foreigners can incorporate a company in Singapore and they are not required to be a resident to do so. However, there are some additional requirements they need to fulfil:

1. Resident Director: While foreign nationals can own 100% of the company shares, the company must have at least one director who is a resident of Singapore. A resident director can be a Singapore Citizen, a Singapore Permanent Resident, or a holder of an EntrePass or Employment Pass with a residential address in Singapore.
2. Local Contact: Foreigners who do not reside in Singapore must appoint a local agent or manager to handle company matters within the country. This could also be the resident director.
3. Company Secretary: Similar to local companies, within six months of the company’s incorporation, a company secretary must be appointed who is a resident of Singapore.
4. Registered Address: A local registered address is required for the company. This cannot be a P.O. Box and must be a physical office address where the company will conduct its business.

If a foreigner wishes to relocate to Singapore to manage their company, they will need to obtain a valid work visa, such as an Employment Pass or EntrePass, which involves a separate application process with the Ministry of Manpower (MOM). Until they have a valid work visa, they cannot act as the local resident director but can continue to oversee business operations from abroad or visit on short-term passes for business-related activities.

Singapore is known for its attractive tax regime. Newly incorporated companies enjoy tax exemptions on the first SGD 100,000 of chargeable income for their first three consecutive tax filing years. The corporate tax rate is capped at 17%, making it one of the most competitive in the world.

The incorporation process in Singapore is lauded for its efficiency, with most businesses being registered within 1-2 days after the submission of all necessary documents and barring any regulatory reviews.

After incorporating a company in Singapore, there are several ongoing compliance requirements to keep in mind to ensure the business remains in good standing with local authorities:

• Annual General Meeting (AGM): Companies must hold an AGM each year, where financial statements are presented to shareholders. The first AGM must be held within 18 months of incorporation, and subsequent AGMs should be held every calendar year at intervals of not more than 15 months.
• Annual Returns: Companies need to file annual returns with ACRA within one month of their AGM. The annual return includes information like the company’s legal name, registration number, registered address, details of directors, secretaries, and auditors, as well as financial statements.
• Corporate Income Tax Filing: Companies must file annual tax returns with the Inland Revenue Authority of Singapore (IRAS). The deadline for filing tax returns is November 30 for paper filing and December 15 for e-filing for the Year of Assessment (YA).
• Financial Records: Companies are required to maintain proper accounting records and financial statements, which must be audited annually unless the company meets the criteria for exemption.
• Updating Company Information: Any changes to company particulars, such as changes in company officers, shareholders, or registered address, must be reported to ACRA within the prescribed time frames.
• Statutory Registers and Records: Companies must maintain up-to-date statutory registers, such as the register of directors, secretaries, members, and auditors, at their registered office address.

Yes, transitioning from a sole proprietorship or partnership to a private limited company in Singapore involves a few key steps: First, secure approval for your new company name from the Accounting and Corporate Regulatory Authority (ACRA). Next, complete the incorporation process by submitting required details about directors, shareholders, and the company’s address to ACRA. Appoint a resident director and a company secretary. Transfer all business assets and liabilities to the new entity, update your business status with ACRA and the Inland Revenue Authority of Singapore (IRAS), and notify your stakeholders about the change. Finally, ensure any necessary business licenses or permits are re-applied for under the new company structure.

We hope this FAQ has shed light on the straightforward process of starting a business in Singapore and the multitude of benefits it offers. With its business-friendly policies and transparent legal framework, Singapore provides an ideal environment for budding entrepreneurs. Armed with the right knowledge and guidance, navigating the incorporation process can be a breeze, setting you on the path to business success in no time.

If you’re ready to embark on your entrepreneurial journey in Singapore, we’re here to help! At IGS Consulting, we specialise in assisting businesses with incorporating in Singapore. Our friendly and experienced team is dedicated to ensuring a smooth and hassle-free experience for our clients. Let us guide you through the process and provide you with the expertise and support you need to kickstart your business with confidence. Get in touch with us today, and let’s make your business dreams a reality!