Category: Singapore Company Formation

A.1 Business Pte Ltd offers a vast range of services, including company formation in Singapore to both
local and foreign entrepreneurs interested in starting up their own business.

For concerns and queries about company formation, our team of highly trained and skilled professionals
are always willing to provide assistance

    Home Office Scheme in Singapore

    The Home Office Scheme is a scheme which allows a company’s registered address to be their HDB address. Through this scheme, home-owners can conduct their business at home as long as they satisfy all the given criteria and guidelines which is subjected to URA’s approval. Implementation of this scheme should not bring about disturbance or inconvenience to the neighbourhood.

    Please note that the approval is subject to the following:
    a) general Terms & Conditions stipulated under the Home Office Scheme;
    b) terms of the lease/tenancy agreement with HDB;
    c) registration of your business/company with the Accounting & Corporate Regulatory Authority (ACRA);
    d) HDB’s right to revoke approval granted under the Scheme if you breach any of the terms of the Scheme and lease/tenancy agreement, and the provision of the Housing & Development Act (Cap 129) or for any reason whatsoever.
    After five years, you will need to renew your application.

    PERFORMANCE CRITERIA FOR HOS:

    1. The conductor of the business must be the flat owner or any other authorised person approved by HDB and must continue to use the flat as his place of residence.
    2. In addition to the business use, it must also be used for residential uses and the business activities should be confined within the premises.
    3. The business has to be registered with ACRA, unless it has been exempted from registration under the Business Registration Act.
    4. The HDB flat cannot be used as a home office or a registered office for a society.
    5. The business must not
      1. generate extraneous noise, smoke, odour, liquid waste or dust that could become a nuisance.
      2. be illegal or unlawful.
      3. have any bad and immoral influences.
      4. introduce excessive human or vehicular traffic to the surrounding neighbourhood.
      5. adversely affect the character, ambience and environment of the residential estate.
    6. Any solicitation of business that may cause disturbance to the residents or public are disallowed, i.e. distribution of brochures, flyers or door-to-door visits.
    7. No selling of physical goods.
    8. No display of advertisements or posters.
    9. All necessary safety precautions must be taken to ensure that the business activities do not pose any danger.
    10. Electricity and structural load must not surpass the normal (residential) load.
    11. Storage and use of hazardous substances are strictly prohibited.
    12. The business must fulfil the fire safety requirements imposed by the Fire Safety and Shelter Department. Which are:
      1. To install one 1 x 2kg ABC Dry Chemical Powder fire extinguisher.
      2. To install one single-station smoke detector. (For enquiry on the fire safety requirements, please email SCDF_qp_consultant@scdf.gov.sg)
    13. The regulations of other government authorities and licences/approvals must be obtained before business can commence. To search for the licences/approvals, please visit https://licence1.business.gov.sg.

     

    TERMS AND CONDITIONS:

    1. The premises to be used primarily for residential purposes with part or parts of the premises being used by the occupants as an office.
    2. The number of non-residents (such as employees, partners and directors) engaged in the business is limited to a maximum of 2.
    3. Owners must ensure that the activities of their business do not cause any disturbance to the neighbours or the residential neighbourhood.
    4. The businesses must satisfy the performance criteria.
    5. The business must be listed in the permitted business section under the Home Office scheme.
    6. Display of business signage outside the residential premises is not allowed.
    7. The use may be terminated if the business results in complaints from neighbouring residents.
    8. There will not be any increase in the floor area of the building even if there is a change in use of the relevant premises.
    9. No part of the relevant premises comprises of works that are unauthorised under the Planning Act.
    10. Any approval required from the relevant authority for the change in use of the relevant premises has to be obtained before making the changes in use of the relevant premises.
    11. Where the person lodging the registration form is not the owner of the relevant premises, a written consent from the owner of the premises has been obtained before the lodgement of the registration form.
    12. When the HO use ceases or if the HO permit is revoked due to a breach in conditions or guidelines, the use of the relevant premise as a Home Office shall be reverted back to residential use.

    PERMITTED BUSINESS

    • Accountancy services
    • Architectural services
    • Consultancy services (business, engineering, IT, management or education)
    • Design/Advertising services
    • Insurance/Financial planning services
    • Real estate agencies
    • Technology based and knowledge intensive businesses
    • Transportation services
    • Trading office

    NON-PERMITTED BUSINESS

    • Beauty, hair dressing or massage therapy services
    • Car trading business
    • Card reading/palm reading or fortune telling in any form
    • Catering/restaurants
    • Clinics and pharmacies (e.g. dental, medical, veterinary)
    • Commercial school (e.g. dance, music, language, tuition centre)
    • Courier business
    • Classes on dress-making and embroidery
    • Employment agency
    • Funeral chapels or homes
    • Maid agency
    • Mausoleums
    • Manufacturing, preparation or processing of any products and goods
    • Money lending businesses
    • Opticians
    • Repair activities (e.g. household appliances, electrical products, footwear, etc.)
    • Sales/marketing that involves conducting seminars and talks for large number of customers
    • Shops and any form of retail activity, including pet shops

    How to Set Up a Tuition Agency in Singapore?

    Prior to setting up a tuition agency in Singapore, business owners need to register a company in Singapore and set their business activities as “commercial schools” or “tuition centres” before the company can proceed online to apply for private school licenses.

    In the Private Education Act, private education is defined as “Full-time education helping students for any examination that results in a qualification awarded by another person or organisation other than the Private Education Institution (PEI), or admission to an education institution”. Tuition agencies operate in accordance to this law.

    Thus, with the effect from 21 December 2009 under the new Private Education Act, organisations – including sole-proprietors; partnerships; companies and registered societies, are legally required to enlist as a private school with the Council for Private Education (CPE), a statutory board under the Ministry of Education (MOE) of Singapore. However, organizations keen to register with the CPE have to comply with the various laws and regulations.

    Enhanced Registration Framework in Singapore

    Companies who are interested to start a tuition agency have to go through a process called the Enhanced Registration Framework (ERF), which is implemented by the Private Education Act and the Private Education Regulations. Through ERF, the Council for Private Education ensures that all PEIs functioning in Singapore meet the mandatory registration requirements and legislative obligations.

    Documentation compulsory for Registration

    Document 1: Status as a registered company

    A tuition agency must be formed as a company registering with the Accounting & Corporate Regulatory Authority (ACRA). Also, in order to be registered, it must conform to certain necessities with respect to corporate governance. In order to prove this, entrepreneurs who start up the tuition agency can present his BizFile to CPE.

    Regarding naming of the tuition agency, the name of it and the department must denote a place of learning. The name of the agency should be comprised of words like “school” or “academy”.

    Also, to avoid any misinterpretation of the tuition agency to be same or associated with other existing agencies, the CPE will not agree to agencies using a name similar to each other. It should also not contain words such as “Singapore” and “National”, as it is highly possible to lead potential customers to think that the agency is related with the Singapore Government.

    Document 2: Details of managers

    The managers of the tuition agency are the directors of the company. A Manager’s Declaration Form accompanied with the personal particulars should submitted to allow the CPE to conduct checks if the manager is fit and proper to perform his/her roles.

    Document 3: Floor plan of premises & Approvals on the suitability of premises

    Firstly, at least one fully enclosed classroom and a dedicated area for office or administrative activities is required for the tuition agency to be approved by CPE.

    Secondly, the premises of the tuition agency must be judged as appropriate for providing legitimate and hazard-free private education by government-controlled land planning and fire safety authorities. Its properties and equipment must obtain Urban Redevelopment Authority (URA) or the Housing Development Board’s (HDB) approval to be used as a commercial school; and the fire safety clearance from the Fire safety and Shelter Department (FFSD) of Singapore Civil Defence Force (SCDF).

    Document 4: Details of the members of tuition agencies’ Academic Boards

    Every tuition agency has to set up an Academic Board. The agency must follow the academic policies and procedures developed by the Academic Board. The Academic Board is generally liable for the academic quality of the agency.

    The Academic Board of the tuition agency must contain of at least 3 members. These members must not be bankrupts; sentenced in any court of law in Singapore for an offence under the Act; guilty of any offence involving fraudulence or corruption; or be managers of any unregistered or registration-rejected PEI.

    Document 5: Details of the Courses and Teacher to be employed

    • Photocopy of every teacher’s NRIC or passport
    • Certification of each teacher’s relevant academic qualifications and work experience
    • Class timetable
    • Attendance sheets
    • Teacher deployment chart
    • Receipts issued to students
    • Sample of Textbook or Assessment Books issued to students

    Registration Methods

    Method 1: Online Business Licensing Service

    Registration for PEI can be presented electronically via the Online Business Licensing Service (OBLS) available at https://licences.business.gov.sg. Users have to Log-in to the OBLS system through Singpass or CPF PAL PIN.

    Method 2: Smart Forms and Paper Forms

    Smart Forms are available for download at the CPE’s website. It is submitted as ‘attachments’ using OBLS when completed. PEIs will be asked to fill in hardcopy forms in situations where signatures of the managers are mandatory.

    For more information, please refer to https://www.cpe.gov.sg/for-peis/enhanced-registration-framework-erf/enhanced-registration-framework-erf

    How to Set Up a Trading Company in Singapore?

    Singapore is an effective and efficient ‘port of call’ for many traders around the world, especially those dealing in the western and eastern time zones. According to World Trade Organization’s latest statistics, Singapore is the 14th largest exporter in the world. If you plan to register a company in Singapore for the import/export business, an overview of the various aspects of trading is provided below.

    With 3000 logistics and supply chain management companies available in Singapore, trade has become an integral part of the country’s booming economy. Singapore also provides shippers with a choice of 200 shipping lines that has connections to over 600 ports in more than 120 countries. With market dominance over this industry of import/export trade, Singapore has well-defined procedures in place. Please read on to find out more about setting up a trading company in Singapore.

    How to start a trading company in Singapore?

    Step 1: Incorporate a trading company

    In order to start a trading business in Singapore, a Singapore company is required to be incorporated. The procedure of company incorporation is fully computerized through the Bizfile website. Therefore, the time needed to process each incorporation is short, about 1-2 days under normal circumstances.

    Step 2: Register with Singapore Customs

    Both exporters and importers have to activate their account with Singapore Customs before being granted permission to import/export goods into and out of Singapore. 1-2 working days will be needed after submission of the application before activation of account is processed. If successful, a Customs approval letter will be issued and it will be valid for as long as the company exists.

    Step 3: Apply for licences and permits

    For import /export of all goods

    Including all non-controlled and controlled items, import of all goods into Singapore require an IN Permit through TradeNet®. On the other hand, export of all goods out of Singapore require you to obtain an OUT Permit through TradeNet®.

    IN Permit and OUT Permit has to be obtained:

    • before exporting goods if they are transported via rail or road, or are controlled goods.
    • within 3 days of export if your goods are transported by sea or air, or non-controlled goods.
    • before exporting goods that are imported under the Temporary Import Scheme previously.
    • before exporting goods under the Temporary Export Scheme.

    However, certain special scenarios may be imported/exported without a permit. One such example includes importing/exporting of uncontrolled items that does not exceed S$400/- in total value on the CIF (Costs, Insurance and Freight) value.

    For import/export of controlled goods

    Controlled goods are the import/export of some goods that are subject to the control of Controlling Agencies. To import/export controlled goods, a permit is required, in addition to the IN and OUT Permit. Permit applications can be submitted to relevant Controlling Agencies through TradeNet® system or via your freight forwarder, cargo agent for processing and approval. Some examples of controlled goods include tobacco products, petrochemicals, drugs, animals and food products.

    For import of high-technology items

    Some high-technology items are subject to export control and the importer from Singapore may have to provide an Import Certificate and Delivery Verification (ICDV). ICDV can be applied by importers at Singapore Customs. Items covered in an ICDV must not be diverted to other countries, only imported directly into Singapore.

    For export, transshipment, or transit of Strategic Goods

    A Strategic Goods Control (SGC) TradeNet Permit must be obtained if one intends to tranship, export or bring in Strategic Goods. They are regulated by the Strategic Goods (Control) Act which covers all goods and technology that are likely to be used or intended for weapons of mass destruction.

    For export of local goods

    Singapore exporters may be asked for a Certificate of Origin (CO) by buyers which is able to prove that goods are made in Singapore. Two types of Certificates of Origin exists:

    • Ordinary Certificates of Origin – to satisfy buyers that products exported are wholly obtained, produced or manufactured locally in Singapore.
    • Preferential Certificates of Origin – a document that help to improve the competitive edge of exports as it enables buyers to claim preferential tariff treatment when importing.

    A Certificate of Origin can be applied through TradeNet® or via a freight forwarder or cargo agent.

    How to Strike Off a Company in Singapore?

    In the business world, there are always companies going for strike-off due to many unforeseen circumstances such as disputes between shareholders, directors of the company may choose to shut down their business. However, not all companies are eligible to apply for strike off. They have to meet the criteria stated by ACRA in order to apply for the strike off documents and accounts.

    The criteria set by ACRA are as follows:

    • The business must have ceased trading or not began business from their incorporation date.
    • The business must not have any outstanding tax liabilities with IRAS and must not be indebted to any other government agency.
    • The business must not have any outstanding charges in the company’s charge register.
    • The business must not be involved in any court proceedings (within or outside Singapore).
    • The director(s) must obtain the written consent of the majority of the shareholders.
    • The company must not have any current/contingent assets and liabilities.
    • The accounts attached must be drawn up till the date of cessation indicated in the application (if applicable).

    Companies Limited by Guarantee must submit the last set of audited accounts.  After meeting all of the criteria, the companies can start preparing the documents or accounts needed for strike-off.

    The strike off documents required by Accounting and Corporate Regulatory Authority Singapore (ACRA) are as follows:
    1. Declaration of Strike Off
    2. Application for Strike Off
    3. Tax Clearance
    4. Waiver of Form C-S/C, if any

    However, the submission of the strike-off documents varies according to the company’s transaction.

    If the company has not carried out any transaction since its incorporation date and has not filed for any audited accounts, they are not required to submit any audited accounts with its application. However, the company has to close the bank account before its strike-off, if any, and also provide a bank statement as an evidence for the closure. Besides that, they will only need to prepare the strike off documents as mentioned above. For companies that have filed audited accounts previously, they have to submit a copy of the latest audited report together with the strike-off documents.

    If company has carried out transactions, they will have to ensure that they have no liabilities and assets in the last audited accounts. If there are no assets or liabilities, they have to submit a copy of its certificate of exempt private company in the last Annual Return without the last audited report. Otherwise, the company must enclose the last set of audited accounts in its application and the directors must provide explanation and evidence in their applications on how these assets or liabilities are disposed of.

    With all the documents ready, the application is required to be submitted online through Bizfile. The application will take around 7 to 14 days for ACRA approval. Once it is approved, a striking off notice will be given to the company and IRAS for anyone to raise objection. If there is no objection raised, the final notification will be given with the struck off date.

    For applications that are not approved, companies will receive an email notifying them. It may be due to the outstanding assets or liabilities, and companies can re-submit its documents for ACRA to re-consider. The entire striking off process will take around six months to be completed.

    How to Set Up an Employment Agency in Singapore?

    An employment agency is a company which act as the middleman to help assist other companies with the process of recruiting and staffing potential employees. Employment agencies are in charge placing both local and foreign candidates to positions in companies ranging from entry-level to top-level executives.


    Procedure for setting up employment agencies in Singapore:

    Step 1: Register a company in Singapore
    To set up an employment agency, applicants must first incorporate their company in Singapore under a business code depending on the type of recruitment activities which the agency carries out. There are 2 main types of business codes:

    78115 – Business activity (For agencies responsible for executive searches and headhunting)
    78114 – Business activity (Applicable for other employment agencies except maid agencies)

    Step 2: Setup a business office

    The next step is to establish an operating business office. Applicants have the option of choosing from various office spaces depending on their budget and business requirements.

    Step 3: Certifications for Key Appointment Holders and Employees

    Employees and key employment holders working in employment agencies need to obtain certification through under the CEI (Certificate for Employment Intermediaries) course. The length of the course varies depending on the positions held. Key employment holders such as CEOs need to attend a 40-hour course while the course duration for regular employees is 32 hours.

    Step 4: Apply for Employment Agency License

    Once the CEI is obtained, the Employment Agency Licence needs to be obtained before applicants can finally start up their employment agency.

    Who needs to apply?

    It is necessary for every company which engages in employment agency activities in Singapore to apply for the Employment Agency License, irrespective of whether the company is located in Singapore or in other countries.

    Employment agency activities include communicating with prospective candidates regarding their job application status and collating resumes of job applicants looking for employment. Moreover, it also includes submitting Singapore Work Visa Applications to the Ministry of Manpower on the behalf of employers or job applicants, as well as facilitating the placement of candidates with employers.

    Types of licenses available:

    Companies can either choose to apply for a Comprehensive or a Select Licence, depending on the type of employment activities the agency deals with.

    The Select License is meant for agencies involved in the recruiting and staffing of candidates whose monthly base salary is S$7,000 and above. Agencies which do not meet the requirements are required to apply for the Comprehensive license instead.

    Fees and Duration of application

    A license registration fee of $400 will be charged for the application of the licenses. The application of Employment Agency License will take 1-3 weeks to be processed. Subsequently, upon approval of the application, applicants will be notified via an email which will also contain the IPA (in-principal-approval) letter attached.

    Other Documents

    Once the IPA letter is received, license applicants must then submit the following documents to be issued the license.

    • Security Bond – to be obtained from a bank in Singapore, in the form of Banker’s Guarantee. To be issued a Banker’s Guarantee, applicants need to open a fixed deposit (FD) account for the said amount with bank. The Banker’s Guarantee should cover 15 months from the start date.
    • Clear copies of applicants’ Singapore ID (for Singapore Citizens and Permanent Residents) or Employment Pass.
    • The latest copy of company business profile (obtained from ACRA)
    • Applicant’s recent passport-sized photograph
    • A copy of applicant’s In-Principle-Approval letter
    • A copy of the approval letter obtained from relevant authorities (For applicants operating under HomeOffice Scheme)
    • A copy of the applicant’s Certificate for Employment Intermediaries (CEI)
    • Completed checklist form

    Once all the relevant documents are submitted, applicants will be notified via email within 7 days of document submission, that their application has been approved. After that, applicants will need to pay a $100 fee before the license is issued and mailed to the applicant’s address.

    The employment license is valid for 3 years from the date of issue and applicants can renew choose to renew the license after that.

    What are the benefits of setting up a business in Singapore?

    Singapore is ranked the number one city with the best investment potential in the world. Singapore has attracted many investors and entrepreneurs to invest and register businesses in the country as there are many benefits of setting up a business in Singapore.

    The benefits of setting up a business in Singapore are as follows:

    Political Stability

    Singapore is a politically stable country without any foreign debt and relatively high government revenue. This has attracted potential entrepreneurs and international business to set up their business here in Singapore. As it is foreseen that Singapore will be stable for a long term basis, this implies that businesses will facing lower business risks and costs.

    Also, businesses are able to draft out future business plans easily as they will not face difficulty in forecasting the industry and business trends in Singapore.

    Pro-Enterprise Government

    To be pro enterprise, the Singapore government has provided different types of business incentives to encourage locals and foreign investors to set up their businesses in the country.

    For example, Singapore provides Productivity and Innovation Credit Claims for businesses to enjoy tax deduction or cash payout. This can help to reduce the heavy taxes and high expenses borne by a local company.

    Low taxes

    Also, Singapore has a low effective personal and corporate tax. Compared to Japan’s corporate tax rate of 38.01%, Singapore charges much lower tax rates of 17%. With a lower corporate tax contribution, business will benefit as they are able to earn a higher net profit in Singapore compared to other countries.

    Skilled Workforce

    Besides political stability, businesses can benefit by setting up companies in Singapore in terms of the high quality workforce available. As Singapore is a knowledge-based country, its labour force is well-educated and professionally qualified.

    Companies will not have difficulty in employing highly skilled labour needed in the different sectors; especially so in the financial and economic sectors. They will also not face problems in searching for a qualified business partners when they are starting up a new company in Singapore.

    Advanced technology and infrastructure

    The technology and infrastructure of Singapore also makes it favorable for businesses. According to the 2012 Mercer Quality of Living Study, Singapore is ranked first in the world based on our infrastructure. Singapore now has a well-established infrastructure, as they have air, sea, land and telecommunication means available around the country to support any mode of transport for companies to overcome delivery and production difficulties.

    The Singapore government not only seeks to develop the physical infrastructure, but to adopt up-to-date technology as well. Companies can benefit from the advanced technology as more businesses use information technology to retrieve information from customers, staff and also shareholders.

    Protection of Intellectual Property

    Protection of corporate intellectual property is a priority. The Singapore government has strict laws to prevent piracy in the country. This encourages business to produce and sell goods that entail valuable assets as they do not have to worry about company’s trademarks and patents. Therefore, by setting up a business in Singapore, businesses can be better protected with the intellectual property laws implemented.

    Singapore has been progressing well in terms of economic growth and political stability. By providing the best investment environment, the country has become an attractive market for various businesses, due to the various benefits of setting up a business in Singapore.

    What are the benefits of setting up a business in Singapore?

    Singapore is ranked the number one city with the best investment potential in the world. Singapore has attracted many investors and entrepreneurs to invest and register businesses in the country as there are many benefits of setting up a business in Singapore.

    The benefits of setting up a business in Singapore are as follows:

    Political Stability

    Singapore is a politically stable country without any foreign debt and relatively high government revenue. This has attracted potential entrepreneurs and international business to set up their business here in Singapore. As it is foreseen that Singapore will be stable for a long term basis, this implies that businesses will facing lower business risks and costs.

    Also, businesses are able to draft out future business plans easily as they will not face difficulty in forecasting the industry and business trends in Singapore.

    Pro-Enterprise Government

    To be pro enterprise, the Singapore government has provided different types of business incentives to encourage locals and foreign investors to set up their businesses in the country.

    For example, Singapore provides Productivity and Innovation Credit Claims for businesses to enjoy tax deduction or cash payout. This can help to reduce the heavy taxes and high expenses borne by a local company.

    Low taxes

    Also, Singapore has a low effective personal and corporate tax. Compared to Japan’s corporate tax rate of 38.01%, Singapore charges much lower tax rates of 17%. With a lower corporate tax contribution, business will benefit as they are able to earn a higher net profit in Singapore compared to other countries.

    Skilled Workforce

    Besides political stability, businesses can benefit by setting up companies in Singapore in terms of the high quality workforce available. As Singapore is a knowledge-based country, its labour force is well-educated and professionally qualified.

    Companies will not have difficulty in employing highly skilled labour needed in the different sectors; especially so in the financial and economic sectors. They will also not face problems in searching for a qualified business partners when they are starting up a new company in Singapore.

    Advanced technology and infrastructure

    The technology and infrastructure of Singapore also makes it favorable for businesses. According to the 2012 Mercer Quality of Living Study, Singapore is ranked first in the world based on our infrastructure. Singapore now has a well-established infrastructure, as they have air, sea, land and telecommunication means available around the country to support any mode of transport for companies to overcome delivery and production difficulties.

    The Singapore government not only seeks to develop the physical infrastructure, but to adopt up-to-date technology as well. Companies can benefit from the advanced technology as more businesses use information technology to retrieve information from customers, staff and also shareholders.

    Protection of Intellectual Property

    Protection of corporate intellectual property is a priority. The Singapore government has strict laws to prevent piracy in the country. This encourages business to produce and sell goods that entail valuable assets as they do not have to worry about company’s trademarks and patents. Therefore, by setting up a business in Singapore, businesses can be better protected with the intellectual property laws implemented.

    Singapore has been progressing well in terms of economic growth and political stability. By providing the best investment environment, the country has become an attractive market for various businesses, due to the various benefits of setting up a business in Singapore.

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