Registration of a company in Singapore is one of the popular choices among investors looking to start international business. Singapore boasts an open economy and an efficient business environment. It is renowned for its progressive and innovative approach to business, low levels of corruption, and the availability of a wide range of business opportunities. Additionally, the country is characterized by innovative infrastructure, political and economic stability, and a progressive financial industry.
The company registration procedure in Singapore can be completed within a relatively short period. The government offers tax incentives and various support measures for young companies, helping to reduce the tax burden and stimulate entrepreneurial activity. Authorities provide benefits for workforce hiring, access to financing, and mentorship for innovative projects. These measures significantly impact the attraction of foreign entrepreneurs to Singapore.
This material may be relevant for those who are interested in how to register a company in Singapore.
Company registration in Singapore: jurisdiction's strengths
Singapore boasts a favorable geographical location, making it a suitable choice for international corporations looking to expand their operations and increase trade volumes in the Asian region. Thanks to its strategic position, Singapore provides investors with access to major markets such as China and the countries of the Association of Southeast Asian Nations (ASEAN).
Singapore holds a significant advantage in the field of asset management in Asia. The financial industry in Singapore is known for its robust regulatory frameworks and innovation. The city successfully competes with other leading states, such as Hong Kong and China, in attracting international investments and managing assets. As a result, many companies and financial institutions choose Singapore as their base for asset management in Asia. Furthermore, this jurisdiction offers access to highly skilled professionals and a wide range of tools for investment and risk management. All of these factors make Singapore an attractive choice for asset management.
It is worth noting that the Singapore Stock Exchange (SGX) boasts more than 200 listed companies, making it the first integrated exchange for cash and derivatives in the Asia-Pacific region. Singapore is recognized as one of the most technologically advanced countries globally. It is renowned for its high-tech infrastructure and progressive government, which integrates new technologies into various sectors, including logistics, education, public administration, and more.
For anyone looking to open a company in Singapore, it is valuable to know that this jurisdiction has been recognized as one of the safest in the world due to strict laws and an effective public safety system. The World Bank has classified Singapore as a country where doing business is easy. The city-state ranks high in corruption-free state ratings and is acknowledged as one of the leading arbitration centers. Additionally, Singapore has developed an open immigration policy.
Furthermore, in Singapore, intellectual property rights are protected by stringent laws and international agreements. The government makes efforts to position the city-state as a leading innovation hub and provides support to entrepreneurs and researchers in the field of intellectual property. The presence of over 90 tax treaties between Singapore and various countries worldwide helps avoid double taxation and promotes the development of international trade.
In Singapore, there are several key districts that can be considered the most developed and progressive:
- Central Business District (CBD): This is the financial and business center of the country, housing major banks, international financial institutions, and large companies. The CBD is the heart of the Singaporean economy and offers a wide range of opportunities for investors.
- One-North Technological Park: This is an innovative cluster that brings together companies, research organizations, and educational institutions. One-North is home to technology startups, biomedical companies, IT firms, and other sectors related to innovation. It's a place where investors can find opportunities for implementing promising projects and startups.
- Marina Bay: This district is known for its luxurious hotel complexes, casinos, and premium-class restaurants. Marina Bay attracts investors in the entertainment, tourism, and real estate sectors.
All these areas offer various investment opportunities depending on your preferences and goals. Keep in mind that all investments come with certain risks, so it's important to consult with legal experts before taking any investment actions.
Features of Registering a Company in Singapore
The business-friendly environment and flexible tax policies attract numerous entrepreneurs to Singapore. However, before opening a company in Singapore without a visit, it's important to consider some key features.
The choice of a corporate form can impact various aspects of its operations. Below are some factors that may be affected when determining the optimal legal structure:
The choice of legal structure should be based on the specific goals and needs of entrepreneurs, as well as the business structure and its prospects.
Every business must have a unique name. The company's name can significantly impact its overall operations, serving as its primary identifier and influencing how it is perceived by customers, investors, and partners. Several key ways in which a company's name can affect its operations include:
When choosing a name, it is important to consider all these factors to select one that aligns with the goals and strategy of your company.
The initial capital investments required for registering a Singaporean company depend on the type of legal entity. For example, when registering a Private Limited (Pte Ltd) company in Singapore, there is no minimum required initial capital. The same applies to branches of foreign companies.
In fact, the actual capital required for registering a company in Singapore can vary depending on the specific plans and needs of the business.
Director and secretary
All registered companies in Singapore must appoint at least one resident director.
It's important to note that obtaining Permanent Residency (PR) in Singapore can be done in a short period (within a few weeks). However, the regulatory authorities do not impose mandatory requirements for residing in the country.
For some legal entity types, the appointment of a Singapore resident secretary is required. Often, this role is fulfilled by an official registration agent through whom you or intermediaries register the company in Singapore.
Commencing a Business Venture in Singapore.
The Accounting and Corporate Regulatory Authority functions as the local regulatory body and serves as the official registrar for legal entities. Discover a comprehensive overview of the procedures for initiating a business in Singapore below.
Foreigners have the option to register various types of entities in Singapore through ACRA, including:
- Private Limited Company (Pte Ltd).
- Partnership Business.
- Public Limited Company (PLC).
- Exempt Private Company (EPC).
- Subsidiary Company.
- Branch/Representative Office.
Additionally, we provide assistance in the acquisition of ready-made companies in Singapore. This involves obtaining a business with an existing name, director and shareholder structure, and registered address. Following the ownership transfer, a series of legal procedures will be undertaken to update the company information with the primary registrar, ACRA.
Registering a company in Singapore under the guidance of specialized professionals encompasses a series of steps:
- Commencing with an initial consultation and evaluation of the client's business.
- Receiving assistance in choosing a unique and distinctive company name.
- Getting support in determining the most fitting legal structure for the company.
- Assembling the necessary corporate document package.
- Submitting the application, along with the complete set of documents, to ACRA.
- Considering capitalization if it is deemed necessary.
- Fulfilling the required registration fees.
After the completion of the company registration process, the subsequent measures involve the establishment of a bank account and obtaining specific permits.
Registering a Private Limited Company (Ltd) in Singapore involves navigating several legal intricacies, and it's crucial for entrepreneurs to have a clear understanding of these aspects:
- No Specific Initial Capital: there is no stipulated requirement for a specific initial capital to establish a Private Limited Company.
- Individual or Corporate Founder: the founder of the company can be either an individual or a corporate entity, however, the maximum number of founders should not exceed 50.
- Resident Director Requirement: it is mandatory to have at least one director who has Singapore residency.
- Appointment of a Resident Secretary: essential appointment of a resident secretary for the company.
- Legal Address Requirement: the legal address of the company must be located within Singapore.
Understanding and adhering to these legal aspects is crucial for ensuring the transparent and efficient registration of a Private Limited Company in Singapore.
On an annual basis, a Private Limited Company is tasked with furnishing an exhaustive financial report, embracing elements like a balance sheet, profit and loss statement, cash flow documentation, and statements indicating shifts in equity. The green light for these financial reports comes from the company's directors, who unveil them during the yearly assembly of stakeholders.
Furthermore, Pte Ltd entities bear the annual responsibility of submitting a corporate income tax return within the designated timeframe as laid out in Singapore's tax legislation. Firms are compelled to uphold meticulous records of their operations, encompassing financial documentation, communications, and diverse paperwork. The maintenance of these records must align with the duration specified in the legislation.
To open a Singaporean company, the following documents are typically required:
- Three preferred names (in order of preference).
- Description of the business activities.
- Copy of the passport of the founder/director.
- Proof of address for the founder/director (e.g., utility bill).
Note: This list is indicative, and additional documents may be requested during the registration process.
Creating a Public Limited Company (PLC) in Singapore unlocks the pathway for public share trading. Essential features:
- Shareholder Count: more than 50 allowed.
- Public Share Listing: enables public trading, expanding investment opportunities.
- Corporate Regulation: adherence to governance standards, bolstered by an independent board.
- Authorized Capital: No set minimum, yet a recommended SGD 500,000.
Establishing a Singapore LLP offers business flexibility and limited liability for partners, shielding them from personal responsibility for the partnership's actions.
- Legal Status: An LLP is a distinct legal entity, open for registration by Singaporeans, PRs, Entrepass holders, and foreign entities, with a local manager requirement.
- Protection of Assets and Liability: Partners benefit from limited liability based on their capital contributions, protecting them from responsibilities related to mistakes or unfavorable decisions by other partners.
- Management: An LLP requires a minimum of 2 partners, whether individuals or corporate entities.
- Financial Reporting: LLP partners must submit official reports detailing annual financial activities.
- Taxation: Singapore taxes LLPs at the partners' level, aligning tax responsibility with each partner's share in the LLP.
Starting an Exempt Private Company (EPC) implies establishing an entity with an exemption from compulsory annual checks.
This structure is commonly used by small and medium-sized enterprises with maximum of 20 shareholders.
- Shareholders limited up to 20 individuals
- Entities are ineligible for shareholding.
- Shareholders benefit from limited liability, ensuring the safety of personal assets, with responsibility limited solely to the invested capital.
- Tax Incentives: EPCs don't pay taxes on the first SGD 100,000 of their income for the first three years, and after that, they get a discount on their taxes.
- Required to uphold accounting records, prepare comprehensive annual financial statements.
- Audit Exemption Benefit: EPCs are relieved from the annual audit obligation if certain conditions are fulfilled.
Taxes in Singapore
Singapore's tax system is recognized as one of the most attractive in Asia. Key advantages include a low corporate tax and a straightforward tax payment procedure. Corporations only pay tax on income earned in Singapore. The government has entered into a network of bilateral tax treaties with many countries, providing more favorable conditions for international business.
The standard corporate tax rate is 17%, but there are also specific conditions for new enterprises that allow them to reduce this rate. Therefore:
- 75% of the first SGD 100,000 of profit is not subject to taxation;
- 50% of the next SGD 100,000 of profit is exempt from taxation.
In the Singaporean commercial landscape, accounting with financial reporting are essential for upholding the credibility and transparency of enterprises. As per regulations, every registered company must prepare and submit financial statements.
These statements must follow either Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), allowing companies to choose based on their preference.
An independent audit firm conducts the company's audit, ensuring compliance with legal provisions and reporting standards. The audit results confirm the accuracy of financial information, building trust with investors and creditors.
Engaging in any business endeavor requires adherence to legal parameters. Hence, when navigating investment choices, seeking guidance from legal advisors becomes paramount. Business legal support encompasses a spectrum of services geared toward addressing diverse issues. Legal professionals offer a myriad of services, including:
- Consultations on the regulation of international activities.
- Development of legal documents such as contracts with counterparties, website policies, etc.
- Due diligence for businesses.
- Legal support for buying and selling business transactions.
- Legal audit of documents.
- Representation of the company's interests in government agencies, including in the resolution of international disputes.
Commencing a startup in Singapore not only brings advantages but also carries prestige. Recognized as one of the premier hubs for managing investments in Asia, Singapore boasts high living standards, economic stability, and financial sector transparency. The city presents diverse investment opportunities.
In 2023, the most financially promising sectors for establishing a company in Singapore encompass trade, logistics, fintech, information technology, intellectual property, e-commerce, and cryptocurrency activities. Singapore offers a wealth of financial and scientific resources, along with access to investors and a pool of skilled professionals.
Trading Activities: Singapore stands as one of the foremost global trading hubs due to its robust infrastructure, efficient governance, and strategic location. These attributes make it an ideal destination for initiating trading ventures and expanding business operations.
Logistics: Singapore has established itself as Asia's key logistics hub, featuring well-developed ports, airports, warehouse facilities. Investors are able to capitalize on this strategic positioning by establishing a logistics company.
Fintech: Singapore is actively positioning itself as an international hub for fintech and digital payments. The city's high level of digitization, progressive government regulations, and access to financial resources present ample opportunities for investing in fintech startups. Investors can explore areas such as payment services, digital investment platforms, blockchain, and other innovative financial technologies.
IT: Serving as a premier information technology hub in Asia, Singapore hosts numerous international IT companies, with the local IT industry experiencing active growth. Investors can discover abundant opportunities to launch IT projects, particularly in fields such as artificial intelligence, robotics, data analytics, cybersecurity, and related domains.
E-Commerce Business: Singapore provides a dynamic platform for e-commerce development. Investors can delve into opportunities within e-commerce platforms, online marketplaces, logistics companies, specialized e-commerce solutions, and related enterprises.
Crypto Industry: Singapore has emerged as a global epicenter for cryptocurrency and blockchain projects. Regulators foster a favorable environment for entrepreneurs seeking to launch crypto startups, invest in cryptocurrency funds, or conduct Initial Coin Offerings (ICOs). However, staying informed about regulatory policy changes is crucial, necessitating consultation with specialized professionals when investing in cryptocurrencies.
All these sectors offer a wide range of opportunities for investors. Overall, Singapore continues to attract investor attention and remains a sought-after business destination in Asia. However, before investing, it is crucial to understand local requirements and find reliable partners for the successful implementation of a business project. Our company's specialists have extensive experience, maintain close partnerships, and can provide expert support in the process of company registration in Singapore.
Startup funding in Singapore
The jurisdiction has developed a range of funding programs designed to support startups. Some of them are described in the table below.
SUTE (Start-Up Tax Exemption Scheme) program
Under this scheme, newly incorporated companies with an annual income not exceeding $100,000 may enjoy a partial (75%) exemption from corporate income tax for the first three years from the date of registration. Starting from the fourth to the sixth year, companies can obtain tax exemptions of 75% on the first $10,000 and 50% on the next $190,000.
Global Talent Program (GIP)
It represents a government initiative aimed at attracting highly qualified and successful businessmen, entrepreneurs, and investors from around the world. GIP provides opportunities for obtaining permanent residency in Singapore in exchange for investments in the country's economy.
The program is designed to attract business leaders to Singapore whose success will contribute to the development of the economy, job creation, and the advancement of new technologies and innovations.
To apply for participation in the GIP program, one must meet certain criteria, such as a high level of business experience, significant investments, and financial capability. Additionally, candidates must demonstrate the potential to create economic value in the country.
Startup Tax Credit Program (SPRING)
SPRING assists new entrepreneurs in gaining access to financing by providing loans that can be used for various business operations, including research and development, commercialization, and market expansion.
The key feature of SPRING is that borrowers can obtain financing without the mandatory requirement of collateral or a guarantor. This makes the program particularly attractive to startups with limited resources. However, it's worth noting that SPRING also has its own requirements and limitations. For instance, to qualify for participation in the program, a company needs to be registered in Singapore, have an innovative business plan, and be at an early stage of development.
Technology Startup Finance Initiative (STFI)
The initiative's goal is to provide access to resources, capital, and expertise for the development of technological startups. STFI offers financial support in the form of grants and investments to startups in various industries, including information technology, biotechnology, artificial intelligence, and others.
Companies participating in the program receive financial assistance, mentorship, consultations, and access to a network of experts and partners. STFI also facilitates the interaction of startups with investors, provides information about funding opportunities, and organizes events to attract capital for project development. Thanks to STFI's support, many startups in Singapore have the opportunity to realize their innovative ideas and expand into the global market.
Small and Medium Enterprise Export Finance Facility (MSPEF)
MSPEF (Market Readiness Assistance) helps enterprises enhance their competitiveness and expand into foreign markets by providing financing, guarantees, and export transaction insurance.
The program offers various forms of financial support, including credit lines, guarantees, insurance, and subsidies. In addition to this, MSPEF provides advisory support and assistance in developing an international business strategy.
Interest-free loans for startups (SEEDS (Startup Enterprise Development Scheme) and Startup SG Loan)
The SEEDS program provides loans to early-stage startups in Singapore to help them overcome financial difficulties. SEEDS loans are typically offered for a period of up to 4 years, and the interest rate is usually 0%.
Startup SG Loan is another program that assists startups in Singapore in securing funding. Through this program, interest-free loans of up to 1 million USD are provided for a duration of up to 5 years.
Fintech Startup Program (FSIP)
The Financial Sector Incentive (FSI) Program provides financial support and guidance to fintech projects in Singapore. FSIP offers various forms of support, including financial assistance, business acceleration, mentoring, access to experts, and infrastructure.
The program facilitates market and customer access while creating conditions for improved collaboration between startups, corporations, and government organizations. To participate in the FSIP, businesses are required to meet certain standards, with innovativeness of business ideas being one of them.
Creating a business bank account presents various benefits owing to the country's stable economy, advanced financial structure, advantageous tax system, utilizing the Singapore Dollar (SGD) as its official currency. Singaporean banks offer advantages like compliance with global transaction standards, multi-currency accounts, and remote account management, catering to global businesses.
Nevertheless, the procedure for initiating a bank account in Singapore, particularly for companies with foreign ownership, can be lengthy. These entities encounter increased prerequisites and must furnish an extensive array of documents, sometimes necessitating a physical presence in Singapore.
To initiate an account with a Singaporean bank, the standard documentation typically involves:
- Confirmation of Account Signatory's Identity.
- Verification of the Authorized Person's Residential Address.
- Details Regarding the Legal Entity and its Officers.
Several banks in Singapore are open to collaborating with non-resident companies, with options including DBS Bank, United Overseas Bank (UOB), OCBC Bank, Standard Chartered Bank. These banks extend diverse services for non-resident enterprises, encompassing launching a company account, loan provisions, asset management, and other banking maintenance.
Given that each bank follows distinct requisites and processes for non-resident engagements, careful consideration of these factors is essential when selecting a preferred banking partner. Alternatively, exploring the option of opening an account with a payment system designed for Singaporean companies is another viable approach.
Closing a company in Singapore demands careful consideration, akin to the meticulous steps taken during the initial registration. Entrepreneurs may opt to conclude their business operations for various reasons. The closure process is uncomplicated when reports are promptly filed, and legal obligations are meticulously observed. Given the distinct features of each case, seeking the assistance of a professional offering legal support for company closure emerges as a prudent choice.
Singapore is a popular trade destination with a wide network of international trade agreements. The country is one of the leading global financial and logistics centers, earning a reputation as a reliable business hub due to its thoughtful economic policies, low corruption levels, developed infrastructure, and access to global markets. This attracts numerous companies and entrepreneurs looking to grow their businesses.
Moreover, Singapore provides competitive conditions for fund management and other asset types. Its strategic location, high regulatory standards, and the availability of talented financial professionals make it an attractive destination for investors and asset managers worldwide.
Before opening a Singaporean company, it is crucial to understand the requirements set for the process. The registration and management of a company require compliance with specific rules. For detailed information on how to remotely register a company in Singapore, consult the specialists at TK Deal.