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International enterprises and entrepreneurs may choose to establish a company in Singapore for a variety of reasons:
It is Asia’s leading innovation hub, the second-easiest place to do business in the world, and enterprises may be established in as little as 15 minutes (fastest in Southeast Asia).
We’ve outlined the three basic processes for launching a business in Singapore for anyone considering taking the plunge.
Step 1. Choose the Correct Business Structure
While a limited liability company is the most common business structure in Singapore, there are a variety of alternative possibilities.
Before you start a business in Singapore, you should think about all of these possibilities.
The following are the most common forms of business structures in Singapore:
A sole proprietorship, also known as a sole trader, is a business owned and controlled by a single individual.
In Singapore, as well as most other nations with legal systems derived from the British legal system, the sole proprietorship is the default business structure.
Under the legislation, there is no distinction between the entrepreneur and the firm as a sole proprietor: this means that the entrepreneur bears unlimited personal obligation for the company’s operations and is taxed at personal income tax rates.
A general partnership is formed when two or more people join forces to run a business.
Profits are divided among the partners according on the level of their partnership stake, and partners are jointly and severally liable for the business’ activities.
Limited partnerships & limited liability partnerships
Limited partnerships and limited liability partnerships are two types of limited partnerships (LLPs).
In a limited partnership, one or more partners have unlimited liability while the others have limited liability.
All partners in an LLP are limited in their liabilities.
Limited companies in Singapore come in a number of different forms.
- Between 1 and 20 shareholders make up an exempt private company, which is exempt from many of the regulatory and tax restrictions that apply to bigger corporations.
- Between 20 and 50 shareholders make up a private company limited by shares.
- A public limited company must be formed if there are 50 or more shareholders.
Step 2. Prepare and Submit the Necessary Documentation
Once you’ve decided to start a business in Singapore, you’ll need to figure out a few things.
This involves determining your initial share capital, stockholders, and the name and address of your business.
Here’s some areas you might need to back up with documentation:
Shareholders contribute capital to the start-up of a company in exchange for a share of the company’s ownership.
A single ownership stake is known as a ‘share,’ and the group is known as ‘shares’ or ‘stock.’
At general meetings, each ordinary shareholder has a vote, and together, shareholders can appoint and change directors, as well as wind up the company.
A minimum share capital of S$1 is required, and at least one share must be issued.
The contribution of share capital can result in a payout for shareholders if the firm is wound up (though they stand in line behind all creditors)
The board of directors is in charge of the company’s overall operations.
You can appoint anyone to your Singapore company’s board of directors as long as they meet the following requirements:
- A natural person who is at least 18 years old and has full legal ability.
- A minimum of one director must be a Singapore resident with the appropriate citizenship or visa status.
Note that in Singapore, bodies corporate/companies cannot appoint themselves as directors.
Within Singapore, you must establish a permanent address for your firm.
Company address must be a physical address; a PO Box will not suffice.
You must submit an application for your company’s name to be approved.
It will not be able to pay for the name of any existing Singapore corporation.
It’s important to note that approval of your company’s name does not entitle you to a trademark in that name.
Submit documentation to ACRA
The Accounting and Corporate Regulatory Authority (ACRA) must receive all required papers, including a company constitution (outlining the company’s main regulations), director consent to act forms, and shareholder information.
When there are corporate shareholders involved, information on the company’s original registration and ownership structure is essential.
All of information should be included with the incorporation application form.
Step 3. Organize Ongoing Compliance
Following the incorporation of a company in Singapore, you can take the following steps:
- You can establish a bank or business account, as well as appoint a ‘company secretary’ (within six months of the company’s formation, a secretary must be appointed). In Singapore, company secretaries are in charge of the company’s main administrative and governance functions, as well as serving as the company’s primary point of contact with regulators. They must be based in Singapore and possess the required qualifications.
- Every year, companies must file audited financial accounts and annual returns (unless explicitly exempted from the requirement to do so under the Companies Act 1967).
- The company should also check for any other registrations that may be required for a business of that nature. Financial services businesses, for example, require a financial services license to operate in Singapore.
- The business should also determine whether it is required to register for the goods and services tax (GST), which is a 7% indirect tax. Companies with a projected or actual yearly income of above $1,000,000 must generally register for GST.
Singapore is a reasonably simple country to establish a local business.
We’ve outlined the important steps you’ll need to do in order to do so: One, consider the proper business structure; Two, gather documentation and submit an application for incorporation. Three, set up a system for ongoing compliance.
If this feels like it’s still a little tough to deal with, register your company with Air Corporate, and our experts will simply the whole process for you as well as give you access to the resources you need to register your company quickly.
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