A Complete Guide for Company Registration:
The appeal of setting up a company in Singapore is an obvious one, seeing that there are multiple benefits business owners can get by choosing to operate their business here. Including but not limited to: tax exemptions, grants and more. But before things are all smooth sailing ahead, it’s also worth noting that there are still some compliance requirements noted in the Singapore Companies Act (Cap 50) that you have to meet when it comes to the company registration process in Singapore.
Unlike foreign entrepreneurs who are not allowed to self-register their companies within Singapore, local entrepreneurs can choose to do so. However, to minimise the amount of time and resources needed, it is always recommended to get guidance from reputable local registered filing agents. This is because they are well experienced in ensuring that their clients can meet all the requirements set by the Company Registrar of Singapore, also known as ACRA (Accounting & Corporate Regulatory Authority).
Now before one begins the company registration process, there are still some things they can do as an individual. Here is a step by step guide on how to get your company registered.
Follow the process to register a company in Singapore
- Choose the right business structure for your company
- Examine the required conditions
- Reserve your desired company name
- Prepare the necessary documentation
- Beginning the registration process
- Taking care of things after successfully registering business name
Choose your Business Structure
Choosing the right kind of business structure that best matches one’s company is an ideal scenario since that means that their company can maximise the amount of tax benefits received.
When registering a company, business owners can consider between these following types:
- Private Limited Corporation (PTE LTD)
- Sole Proprietorship Corporation
- Limited Liability Partnerships (LLP)
To better illustrate and aid others in choosing, we have created a table:
|Qualities||Sole-Proprietorship||Private Limited (PTE LTD)||Limited Liability (LLP)|
|Catered to||Qualified Individuals||Professional firms and working partners||Scalable businesses|
|Benefits||Affordability||Tax exemptions (1st $100,000 net profit/year taxed at 4.25%, next $100,000 for first three years taxed at 8.5%)||Affordability + limited liabilities (protection)|
|Drawback||NOT considered separate legal identity|
No protection for personal assets
|Considered a separate legal identity BUT bound by compliance obligations (AGM/EGM, etc)||Considered a separate legal identity BUT taxed by personal income tax rate (higher than corporate tax)|
|Owned by||Singapore citizens, foreigners or corporations (only with appointed local manager)||Can be entirely local or foreign owned with no foreign shareholding restriction (at least 1 singapore resident director needed)||Singapore citizens, foreigners or corporations (only with appointed local manager)|
|Personnel Requirements||One owner only||One shareholder and One director needed (can be the same person) BUT maximum 20 members only||Two owners BUT no limit on members|
|Taxed By||Personal Income (Maximum 22%)||Corporate Tax (Maximum 17%)||Personal Income (Maximum 22%)|
|Limited Liabilities||No protection||Yes, protection is received||Yes, partners aren’t personally liable for business debts incurred unless losses resulted from their omission or wrongful act committed|
|Account Auditing||No||Exemption is granted if they fulfill ‘small company’ requirements||No|
|Compliance (Annual)||Bookkeeping, Taxation services||Bookkeeping, Taxation Services, Secretarial services, Unaudited financial statements necessary||Bookkeeping, Taxation Services, Form submission to IRAS|
By comparing the chart available, private limited liability companies can be considered the most efficient type of business structure for most entrepreneurs looking to set up their own company or branch in Singapore.
Check Pre-Registration Requirements
Upon coming to a decision, it is always advisable to study the pre-registration requirements once more before going further.
The requirements to take note of and fulfill are:
- Reserving the company name you want (Your business name has to be approved first before the rest of the registration process can continue)
- Appointing 1 resident director (at least) within the company
- Appointing shareholders (1-50 limit for private limited companies, they can be other entities or individuals regardless of whether they’re foreign or local)
- Appointing a company secretary (within 6 months after successfully registering the company, they should have an individual living in Singapore. They cannot be a director or shareholder.)
- Registering a local business office address (could be either residential or commercial, but cannot be an address of a post office box. If the business is operated on residential premises, application under the Home Office Scheme must be submitted to HDB/URA and approved)
- Having a paid-up capital (the amount can be increased any time after completing the process of company registration, but the minimum amount to be input is at $1)
Reserve Your Desired Company Name
Business owners looking to register their own company will also be required to propose their desired company names and have them approved by the Singapore Government. This reservation procedure is overseen by the Company Registrar, who will accept the application forms that are submitted, review them and then either approve or reject the application. In most cases, business owners will receive the outcome of their application almost immediately, but there are specific words that can actually slow down your business name registration.
For example, words that will require the approval of another governing authority like Media, Bank, Law, Finance, School and such. Should there be a need to refer to other governing authorities, the name reservation process can be delayed for days to weeks. So how does one can increase their chances for quick approval instead?
Here are some recommendations on how one can increase the success rate of quick name reservation approval:
- The proposed name must be one of a kind (it must be meaningful, readable, and unique to their own branding)
- The proposed name should not be formed with vulgar words or obscenities
- The proposed name should not contain anything that infringes on trademarks of another (it should be free from copyright problems)
- The proposed name does not require external approval (Avoiding words like educational, bank etc.)
- The proposed name shouldn’t already have been reserved
After the Company Registrar approves the name application, it will be automatically reserved for the applicant for a period of 60 days (from the application date). The applicant is then responsible for starting the process of company registration in Singapore. If they are unable to do so and they have sought the help of a registered filing agent service provider for name reservation, the same service provider could file a request for an extension (an increase of 60 days).
Prepare The Required Documents
Having all the materials you need is an important part of ensuring that your company registration process goes smoothly. The following is a list of all the items that would be required to register your business. It is recommended that interested entrepreneurs, to run through it once before moving along with everything else:
- Their ACRA-registered company name (must be approved first before registration)
- A short summary/description of their intended business activities
- The personal particulars of existing shareholders and directors (company secretary particulars can be updated now or at a later stage)
- A copy of the company’s registered address (can be office or residential, but most not be a po box)
- A copy of Singapore Identity Card (For local residents)
- A copy of passport details, residential overseas address proof (electricity bills, etc.), other KYC documents (bank reference letters, business profiles, etc.), and registration documents (Memorandum and Articles of Association (MAA) from the Company Registrar) (For foreign entrepreneurs)
It is also important to note that any of the above basic documents, if not in English, require translation and official recognition.
Register Your Official Company
Typically, after the name reservation is successful, the Company Registrar will process the applicant’s incorporation application (along with documents) in a matter of hours when they follow up by submitting them in. To minimise inconvenience, it is always advised to seek the help of a registered filing agent service provider to help with both processes. For foreign entrepreneurs who are not permitted to self-register, they can seek the help of a service provider to obtain a company registration and submit it on their behalf.
There is an added security in doing so since experienced filing agents will take the time to go through the compiled documents to eliminate the possibility of errors, such as making sure all documents were properly signed by the applicant’s directors and shareholders.
At this stage, foreign entrepreneurs are advised to keep these additional concerns in mind:
- Appointing local nominee directors (A feasible solution to undertake for entrepreneurs who want to run their business without living within Singapore, conducting temporary stays with a visitor visa)
- Applying for employment passes or entrepreneur passes and becoming the local resident director (Recommended for business owners who want to operate their business locally)
Follow Post-registration Formalities
Often times, applicants find themselves at a loss for what to do once they have their business approved. So as to ease new business owners into the new transition of setting up operations in Singapore, here are some recommended steps and tips on the formalities that they should be covering:
- Ensuring that documents are received
- Looking into local compliance requirements
- Opening a bank account for corporate purposes
- Applying for needed permits and licensing (if necessary)
- Looking into GST registration
- Getting the funding you need
|Documents To Receive||How You’ll Receive Them||What It Contains|
|Certificate of Incorporation||An email from the Company Registrar||Confirmation of incorporation and a company registration number |
Hard copies can be received by making online requests and paying a nominal fee ($50)
|Business Profile (Company)||An email containing a downloadable PDF (upon request) from the Company Registrar||Key details (Approved company name, registration number, official date of incorporation, shareholder/director/company secretary details, official registered address, the amount of paid up capital, description of main business activities, etc.)|
Can be downloaded by request and paying an application fee
The issued copies of these files are essential for all business owners since they help with legal and contractual matters of the company. For example, activities like opening bank accounts for the new business, leasing space for offices, creating office utilities and more.
Research & Fulfil Company Compliance Requirements
All companies in Singapore are expected to fulfil compliance requirements set by the governing authorities each year. Failing to do so can actually result in serious repercussions, so it is definitely advised for new business owners to research or employ a competent corporate secretary that could assist in monitoring deadlines.
A brief outline of compliance requirements would be:
- Determining the company’s financial year (each company can determine their own financial year, which can begin from any month within the year)
- Conducting AGM/EGMs each calendar year (so that the shareholders of the company are able to examine financial statements and offer approval to the company’s next stage of progress plans)
- Preparing and filing Annual Returns (after one month from AGM date)
- Preparing and Filing Annual Financial Statements (maintaining accounting books is a necessity since annual financial statements must be prepared and filed)
- Preparing and filing corporate tax (could be done either through paper or e-filing for convenience)
- Issuing the share certificates (they should be issued to the shareholders as proof of their ownership and a clear depiction of how the shares of the company are distributed. A board resolution must also be conducted to officially appoint the directors and company officials within the registered company)
Open A Corporate Bank Account
Do be noted that most major banks located within Singapore require the company stakeholders to be physically present in order to open a corporate bank account. Although there are certain banks that do not, it would realistically narrow down the options one can choose from. It is recommended for business owners to make a trip down specifically to tour the banks, they are interested in and examine the advantages of opening an account in each bank so that they can properly evaluate their choices.
Obtain Business License
Depending on the activities of the company, there will be certain times where it’s necessary to obtain business licensing or permits before the company is able to operate a business. Some examples of businesses that do require special permits include, but aren’t limited to: travel agencies, businesses providing financial services, importation or exportation of goods, cleaning companies, restaurants, educational institutes, employment agencies and more.
Register For GST
Registered companies with an expected turnover of more than $1 million (annual) will need to register for GST, which functions as an indirect tax that is levied on goods consumption and services within Singapore. Business owners will need to charge an applicable GST rate of 7% to their consumers. That amount will then be remitted to the relevant tax authorities. For companies who do not exceed the aforementioned $1 million for annual expected turnover, there is no need to register for GST.
Get Help With Funding
Last but not least, let’s focus on funding. One of the many perks that appeal the most to entrepreneurs about registering a company in Singapore would be that there are many financial assistance schemes that the governing authorities have come up with to encourage the growth of new startups. Some areas of funding assistance business owners can look into include:
- Equity programs
- Incubator programs
- Government grants
- Financial schemes
This has been a complete guide on what one should expect in their endeavor to register a company in Singapore. We hope that this has shed some light on the subject and could be helpful to any new aspiring business owners that are planning to start their own business in this thriving hub here.