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Singapore Company Incorporation Procedure
Incorporating a new Company in Singapore
When you incorporate your company in Singapore, you have several options to choose from. Depending on the nature of the business, different incorporation forms can be suitable. The most common way of registering your business in Singapore is the Private Limited company. This allows you a maximum level of flexibility. You can add as many shareholders (Singaporean or foreign) and directors as you wish. There is no required minimum paid up capital. However we recommend to set the paid up capital of your Singapore company at least at S$50.000. This makes it easier later on to apply for the Singapore Employment Pass if you are a foreign national.
Aside from setting up your company in Singapore as a Private Limited entity, there are 2 more frequent company formats. One is the LLP, or Limited Liability Partnership. You may choose this company form if the nature of your business is a professional partnership. For example a law or medical practice. The partners in a LLP usually each hold the same amount of equity in the business.
A Sole Proprietorship is the other option. This form of Singapore incorporation is ideally suited for small business setups with only one shareholder and director. For example, if you plan to setup a trading operation which you solely want to control this might be a good choice. More information on the different entity types is found here.
No matter which Singapore company incorporation format you select, the process of setting up the entity is usually very fast. Between several hours to one business day. It is best if you are physically in Singapore to setup your company. That way there won’t be delays and additional costs associated with getting the necessary documentation approved in front of a notary public overseas.
The Singapore Company Secretary
In Singapore almost all business entities are setup with the help of a Company Secretary. These company secretary are specialised firms which help to register your business with the Accounting and Corporation Authority, or ACRA. After the initial company incorporation process, the Singapore company secretary helps you to comply with the official regulations. The Company Secretary firms usually charge you an incorporation fee and an ongoing yearly fee for maintaining the secretary’s services. Per ACRA regulations you need to appoint a company secretary for your private limited company in Singapore. After incorporation the Company Secretary also helps you to establish contact to one of the major local banks in order to open the bank account for your company. In case there are changes in the shareholder structure or the directorships of the company, you also submit those to ACRA via the Secretary. The cost of incorporating your Singapore company with the secretary starts at S$ 690 and varies greatly between the different firms. The reason for this is mostly the varying service levels. However, if you do your research or request free quotes on Incoway you can save a lot of money in this regard. More information on the Company Incorporation can be found here.
Singapore Company Incorporation for Foreigners
In order to setup a Private Limited company in Singapore as a foreign national you have to take into account several requirements. Most importantly you need to appoint a Singapore Nominee Director in the company. This person does not need to be a shareholder but he is required to hold a directorship. Either you have an existing business contact or friend in Singapore who can fill that role. Or you use a Nominee Director Service from one of the Company Incorporation Providers. The costs vary from S$ 250 – 500 per month. Most firms also require a security deposit. They usually also conduct a KYC (Know Your Customer) interview to ensure they don’t get tangled up in non-compliant Singapore business activities.
A frequent way of transitioning away from the Nominee Director requirement after the company is setup, is to apply for your own Singapore Employment Pass. It is best to do this earliest 3-6 months after your company has been incorporated. The benefit of this exercise is evidently to save the cost of having a Nominee Director service. The requirements for getting your employment pass are detailed here.
Singapore Company Compliance
Once your company in Singapore has been set up it is important to keep the major deadlines for compliance in mind. At the point of incorporation you define the financial year end of the company. This can be changed later as well. For newly setup companies the first financial year end is usually 18 months after the date of incorporation. Please also note that if the company carries out profitable business activities, the first S$ 300.000 in profit of a newly established Singapore company remains tax free. Beyond that there is a scaling taxation system.
Singapore’s Business Friendly Ecosystem
Labor and other business laws in Singapore are very business friendly. This makes it one of the best countries in the world for startup companies. The time and cost requirements for maintaining your business are very low. In fact the Singapore government actively fosters new businesses by providing a multitude of tax breaks and incentives. For example, if your company is a startup in the IT space, there are even several government venture capital options available, such as the iJam program of the Media Development Authority. It is similar for biotech and other emerging industries. In doing this, the government wants to attract the best entrepreneurs worldwide to transform their ideas into businesses in Singapore. In the internet space they have already been quite successful in establishing Singapore as South-East Asia’s Silicon Valley over the last 10 years.
An Ideal Choice for Entrepreneurs!
For entrepreneurs Singapore is certainly one of the best places worldwide to incorporate their companies. Especially if they’re used to the red-tape of Western countries which make it especially hard for new startups to comply with a myriad of labor and taxation regulations.
Singapore Company Incorporation Cost
Below is an overview what you will typically pay for services such as Singapore Company Incorporation, Employment Pass Applications, Nominee Director Services, Registered Office Addresses and others. This serves as a useful guideline.
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Our Singapore Business Insider Blog keeps you up to date in regular posts about important business news and helpful tips and insights into running your daily business operations in Singapore