The Comprehensive Guide to Incorporating a Singapore Company
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Arthur Phan
Introduction
Incorporating an offshore company enhances cash flow flexibility for businesses in a fluctuating economy. The current economic recession increases demand to optimize tax obligations; thus, many business owners have considered relocating their businesses to countries with competitive tax structures.
As an ideal jurisdiction with a friendly business environment and one of the lowest corporate taxes in the world, Singapore has established itself as the perfect financial gateway for worldwide enterprises. Incorporating a Singapore company is relatively simple, fast & efficient, given the recent digitalization of company regulatory works by the Singapore government.
What are the requirements to incorporate a Singapore company? Let's explore the blueprint to incorporate a Singapore company as a foreigner.
Overview of Offshore Incorporation Service
The after-effect of the pandemic and the current economic recession have made business owners look for strategic solutions to enhance business cash flow & optimize spending.
Offshore service providers connect businesses to tax haven jurisdictions, including Singapore. With the guidance of a team of experienced financial experts, lawyers, tax advisors, and company professionals, a trusted offshore service provider aims to help clients successfully incorporate an offshore company to reap the economic benefits of operating a business in the country.
To choose a legal and trustworthy incorporation service provider, one should pay close attention to an organization’s price transparency, industry experience, and service implementation. The company’s policies ensure clients comply with Singapore laws and ongoing essential support to maintain the company.
Why is Singapore attractive for businesses?
Singapore is a strategic location where many businesses have relocated their operations to take advantage of its competitive corporate tax rate. In addition to having one of the lowest corporate tax rates in the world, Singapore’s many business-friendly policies and modern-technology infrastructure make it easy for companies to set up and run their businesses in this Southeast Asia country.
Main key benefits of setting up a Singapore company include but are not limited to:
- Attractive tax structure
- 100% foreign ownership & no currency control
- Avoidance of double taxation*
- Ease of incorporation & operation
- Favorable business policies & support for startups
- Advanced legal framework
You can visit the ACRA website for requirements when incorporating a Singapore company. Additionally, the IRAS website updates you on all the latest information about Singapore corporate tax and related company compliance information.
Types of Companies in Singapore
Singapore allows various business structures for diverse business needs. Each company structure significantly differs in the perception of the business, owners’ liability, expansion potential, and tax obligations and compliance duties. A company structure is a critical choice business owners must make to properly set up a Singapore company that fits their business needs.
All types of business entities allowed in Singapore:
- Private Limited Company
- Limited Liability Company
- Exempt Private Limited Company
- Public Company Limited by Shares
- Public Company
- Public Company Limited by Guarantee
- Sole Proprietorship
- General Partnership
- Limited Partnership
- Limited Liability Partnerships
- Variable Capital Companies
However, there are only 2 main types of business structures that foreign owners can choose to register a company in Singapore.
Mandatory requirements to open a company in Singapore
Company Name (How to Choose)
Choosing an appropriate company nameis important in how your brand comes to customers’ minds. Specifically, the business name earns its role as an effective way to express the company’s messages to customers and investors.
Bizfile (Business Filing Portal of ACRA) manages the Singapore business name database and supports registering new genuine names (15$ fee). The common requirements of a qualified business name include the following:
- Not similar to the current-registered name
- Not undesirable name (Learn more about this term in our article)
- Contain mandatory terms such as LTD., PTE.LTD, and LLP. to define the company type
Director/ Nominee Director
Each Singapore company requires a minimum of one local director. This individual must be at least 18 and free from criminal charges and bankruptcy.
If you are a foreigner, you will need the help of a nominee director service to qualify for this eligibility. This representative individual will operate your business on your behalf with an extent of control level.
Shareholder
Singapore company requires at least 1 shareholder with certain rights and responsibilities to the business entity. The maximum number of shareholders will be depended on the registered company type.
Local Secretary
After 6 months from the date of incorporation, the company must appoint a local secretary, which is not the same as the company director. If this position is vacant for over 6 months, the company might face an up-to-1000$ penalty.
Local Registered Address
A Singapore company needs a local physical address to facilitate receiving legal documents and accessible reach for the public people. You must ensure the address is active for at least 3 hours in a business day. The penalty for not adapting to this requirement may be up to $S5000.
Initial Paid-up Share Capital
The initial paid-up capital required to incorporate a company in Singapore is a minimum of $S1. However, regulated-industry businesses might need higher initial paid-up share capital, depending on the major fields. In addition, shareholders can increase the total capital amount after incorporation.
Corppass
Corppass provides a digital profile that allows smooth transactions with the government without tons of paperwork. As a mandatory requirement for local and foreign business entities, the Corppass account has a large network of 200 government agencies to process numerous business transactions.
Filling of RORC
The filling of RORC (Register of Registrable Controllers) is a must-have registration within 30 days of Singapore incorporation. Besides ascertaining Singapore’s prestige, it contributes to good control transparency among owners and other business entities.
What You Need to Prepare After Incorporation
Document Received
After finishing the incorporation process, you will receive two documents that ensure eligibility for all legal and contractual purposes:
- An email contains the new company’s registration number. It will work as the official certificate of incorporation in Singapore without needing issued physical certification.
- Company Business Profile (Including all essential information about your company)
Depending on your company’s needs, you can consider purchasing the following additional kits:
- Share Certificate: An issued document that the company uses to sell shares
- Share Register: A list summarizes the updated information of each shareholder
- Rubber Stamp: It works as a company signature for approving documents and making other decisions
- Company Seal: It embosses the company's signature to increase easy-to-recognize brand identity
KYC Form for Bank Account Opening
Before applying for your Singapore bank account, we will send you a KYC (Know Your Customer) form to collect all the needed directors' and shareholders’ information. Singapore banks will rely on the information provided to authenticate their customers and avoid financial fraud. Depending on the case-by-case situation, each bank will ask you for more documents to complete the process.
Prepare for Bookkeeping, Accounting, and Tax Service
Businesses’ stable development requires proper cash flow management without violating the government’s laws and regulations. Therefore, our team will accompany you with a professional bookkeeping and accounting service to maintain financial data accuracy.
The advantages when outsourcing a specialized team of compliance services:
Bookkeeping : Provide a cost-effective solution for businesses that save more time & resources than manual bookkeeping work.
Accounting : Generate insightful reports and consult effective tax planning to optimize the tax liability for businesses.
Tax Service: Provide the latest tax policy of Singapore and support required forms to meet the tax filing deadline.
SINGAPORE Company Registration’s Blueprint for Foreign Owners
Besides the general guidelines mentioned earlier, here’s some additional information that non-Singapore residents need to consider when incorporating a Singapore company.
Professional registration firm
Singapore law prohibits non-residents from self-registering a company; non-residents must engage a professional registration firm to register a Singapore company.
Generally, the professional registration firm will act as the company's local secretary and Corpass representative. Corpass is the required online company profile used to perform regulatory and administrative procedures of a Singapore company.
Local Director Service/ Nominee Service
Singapore requires at least one resident director; non-resident beneficiaries must find a Singaporean resident or use nominee director service to fulfill this requirement.
Employment Pass or Entrepreneur Pass can be obtained if a foreigner wants to move and work in Singapore. Passholders enjoy the same local resident’s privileges when it comes to company registration.
Being physically present is not needed to fulfill the formality of company registration.
How Much Does It Cost to Incorporate a Singapore Company?
The cost to start a company in Singapore depends on the internal board. Additionally, the complexity of turn-processing documents and consultancy time might account for a considerable proportion of the total fee.
G.O.C offers businesses a customized reasonable price, facilitated by a transparent process to best serve your business needs. Reference our price plans here.
Conclusion
The demand for incorporating a Singapore company has grown tremendously post-pandemic due to the economic benefits of running businesses in the country. Whether your business goal is to further expand your business to the global front or to optimize tax for more strategic cashflow management, let us be your trusted offshore service provider to guide you and your company to satisfactory results.
Contact us for detailed information now. Get started with us and set up your Singapore company today.
Disclaimer: This guide serves as a reference tool and should not substitute legal advice. For tailored guidance, consult G.O.C's customer services.
