How To Start A Singapore Company

Forming a Singapore company

A company is a separate, distinct legal entity from its shareholders and directors, in layman definition, it is like a child is considered a different ‘thing’ from his or her parents. There are mainly two forms of companies, public and private. In this article, we will explain to you how to start a Singapore company.

Public companies normally have a minimum of 50 shareholders and they are listed with the Singapore Stock Exchange (SGX). Conversely, private companies (Pte Ltd) cannot have more than 50 shareholders and are not listed.

Beneficial owners of the companies are called shareholders. The shareholders are to appoint directors to help them run the company. In accordance with the Singapore Companies Act (CA), any individual (regardless of local or a foreigner) older than the age of 18 is allowed to start a company in Singapore.

Why start a company?

Different from sole proprietors and partnerships, the shareholders of companies have limited liabilities. Because as mentioned above, companies are considered separate legal ‘bodies’ from the owners. So owners/shareholders are never liable personally for the debts of the company or any legal action being taken against the company.

Companies definitely have more legal requirements to comply with in comparison. For example, annual returns (AR) filing and the holding of annual general meetings (AGMs), failing to do so, the Accounting and Corporate Regulatory Authority (ACRA) will be taking action against your company. There is more work involved in winding up a company too. For a company to be removed from the register, it can take up to 5 months.

A company structure is the most suitable if you have the intention to grow your company. Compared to other models, registering a company also have other benefits, for example, raising capital is easier and ease of transfer of ownership. You can find out more about the various business models in Singapore here.

Things to note before registration

Directors

A minimum of 1 director is living in Singapore (can be someone who holds an EntrePass, Employment Pass [EP], Dependant’s Pass [DP]), Singapore citizen [SC] or Singapore Permanent Resident [PR], have to be appointed as director.

A Singapore company can appoint as many local or foreign directors as it likes. They must be minimally 18 years old and not bankrupt or have been convicted of any malpractice previously.

A director need not be a shareholder and vice versa.

Shareholders or members

For Singapore private limited (Pte Ltd) companies, they must have at least 1 shareholder and not more than 50 shareholders. A natural person (human being) or another legal entity (company or a trust) can be a shareholder.

Singapore companies can be either 100% local or foreign-owned. Existing shares are transferrable or you can issue new shares to another person after the company has been incorporated.

Corporate secretary

In accordance with the CA, within 6 months after incorporation, all companies must appoint a qualified corporate secretary. Like the directors, a corporate secretary has to be a natural person (human being) who is living in Singapore.

An important thing to note is where there is only one shareholder/director, that person is not allowed to be the corporate secretary. The position of corporate secretary must not be vacant for more than a period of six months.

Paid-up capital

The minimum paid-up capital is SGD $1. Paid-up share capital can be increased anytime after incorporation.

A registered address

A Singapore address must be used as the registered address of the new company. It can be either a commercial or residential address so long it’s a physical address and not a P.O. box. People can use their home address as their company’s registered address under the Housing Development Board’s (HDB) Home Office Scheme. This scheme is applicable to private properties as well.

Owners/occupiers should check their eligibility and obtain HDB’s approval. For private residential property owners, they have to get approval from Urban Redevelopment Authority (URA).

The registered office in Singapore has to be accessible and operational during office hours to the public.

Company tax

The tax rate in Singapore for companies is 17%. Singapore companies get extremely attractive tax incentives and exemptions. A newly incorporated company can get tax exemptions on its first SGD $200,000 of the normal chargeable income (CI).

There are no capital gains nor dividend taxes for Singapore registered companies. Click here for our guide to corporate tax in Singapore.

Documents needed

The following information is needed by ACRA for company incorporation:

  • Choose an ACRA approved company name
  • Description of company’s activities
  • All shareholders’ personal particulars (i.e. coloured copy of passport for foreigners, proof of residential address)
  • All directors’ personal particulars (i.e. coloured copy of passport for foreigners, proof of residential address)
  • Company registered address
  • Company secretary’s personal particulars
  • Company constitution (normally you can use the model constitution provided by ACRA)
  • The company’s proposed fiscal year-end date

Incorporation

Company registration is now done online entirely in Singapore. Usually, the incorporation takes 1 to 2 days. And as a foreigner, you need not physically be in Singapore to register a company. You should engage the services of a registered filing agent such as us to do so for you if you are unsure.

1. Choosing an approved name and address

To incorporate a company in Singapore, you must first choose an approved name by ACRA. To know how to do so, read our other article here.

Normally you will know whether it is approved or rejected in an hour or so. If the proposed company name has certain sensitive words, the name approval may take up to a few days.

Ensure that the proposed company name:

60 days from the date of application, the name will be reserved. You can apply for an extension before the expiration date for another 60 days.

2. Adopting company’s constitution

Every company must have a constitution. It is a legal document that defines the rules and regulations on how the company is governed, its structure, shareholder rights and all other rules for the management of the company.

If you wish to avoid hefty legal costs to hire lawyers to draft your constitution from scratch, you can adopt the model constitution found here.

3. Completion of registration

Once you have completed the above steps, you can finalise the registration. You need to fill in other key information such as company shareholders details, and the personal particulars of all directors and officers.

In the case whereby the company’s purpose is to set up a school, the incorporation process will take from 14 days to 2 months.

Shareholder agreement

Besides the company constitution, a shareholder agreement is also an important legal document for the incorporation.

This document sets out the rules and regulations on how the company will be managed. And also the relationship between all parties such as the shareholders and directors. A shareholder agreement is meant to supplement the company constitution by covering specific situations. It is meant to resolve any form of disputes should they arise.

Documents issued after registration

ACRA will give you a few documents upon successful incorporation of the company:

1. Certificate of Incorporation

ACRA will give an official email notification confirming the successful registration. This email includes the unique entity number (UEN) and is deemed as the official certificate of incorporation.

ACRA no longer issues a hard copy of the certificate as its no longer required. If you prefer a hard copy, you submit a request online. Do note that it is chargeable.

2. Business profile

Generally, the document is ready to download within an hour after successful registration, it contains:

  • Company name and UEN
  • Previous known names for the company (if applicable)
  • Date of incorporation
  • Principal business activities
  • The paid-up share capital
  • Registered address
  • Shareholders’ personal particulars
  • Directors’ personal particulars
  • Company secretary’s personal particulars

These two documents are sufficient in Singapore for all contractual and legal purposes. Including the opening of corporate bank accounts, signing of a rental lease, subscription to internet providers and so on.

Maintenance fees of a company

After registering your company, you will incur certain fees on an annual basis in order to ensure compliance with the authorities.

Contact Us

If you have any questions at all regarding the setting up of a company in Singapore, contact us today!

 

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