Registering a Company in Singapore

Under the Singapore Companies Act, any person, whether foreign or local, can register a company in Singapore if they are over eighteen. Singapore is known to be one of the most accessible places in the world for registering a business, and it consistently ranks in the World Bank’s ‘Ease of Doing Business’ reports. An attractive tax climate is another reason Singapore attracts foreign investors.

If you are starting a business in Singapore, you may need to register it. Anyone carrying out continuous profit-making activities must register with ACRA (Accounting and Corporate Regulatory Authority).

You may decide that a company is more appropriate for your needs than a sole proprietorship or partnership. Singapore has two main types of companies: public and private. Public companies are listed on the Singapore Stock Exchange (SGX), whereas private companies are not, and have a limit of fifty members.

If you are going to register a company in Singapore, it’s essential to understand the requirements, restrictions, and parameters that impact the company structure. Here are some of the key points to know before you start.

Registered address

A company registered in Singapore must have a registered address within the country. The address must be an actual/physical location rather than a PO Box. It can be a residential property and must be operational and accessible to the public during standard office hours.

Owners or tenants of HDB (Housing Development Board) properties can use their residential address as a business address under the Home Office Scheme. This scheme allows residents to perform administrative activities to support the business and hire up to two non-resident employees. Flat owners or occupiers must obtain permission from HDB.

Directors

There is no cap on the number of directors a Singaporean company can have. However, all directors must be at least eighteen years old and cannot have been convicted of malpractice or made bankrupt. Directors do not have to be shareholders.

At least one director must be ordinarily resident in Singapore, meaning they are either a Singapore citizen or a Singapore permanent resident or have been issued an EntrePass, Employment Pass, or Dependant’s Pass.

If you are a foreign entrepreneur living in Singapore, you can apply for an EntrePass (Entrepreneur Pass) from the Ministry of Manpower (MOM). You can apply for an EntrePass before incorporating a company with ACRA or within a six-month window after incorporation.

If you hold a Dependant’s Pass (DP) and want to start a business, you must apply for a Letter of Consent (LOC) from MOM to do this once you have registered the company with ACRA.

Shareholders

Singaporean companies are permitted to have 100% local or 100% foreign ownership with a maximum number of fifty shareholders. After incorporation, existing shares can be transferred to another person or new shares issued.

Company secretary

Under the Companies Act, every Singaporean company must have a suitably qualified company secretary appointed within six months of its incorporation. The company secretary must ordinarily be a resident of Singapore.

If the company only has one director, this person cannot also act as the company secretary. Smaller companies may appoint a suitably qualified and experienced person from within the business; larger companies often use professional corporate secretarial services. Corporate secretarial services can usually provide a nominee director if there is no Singaporean resident to act as a director, so they are also a good choice for one-director companies.

The post of company secretary cannot remain vacant for more than six months at any given time.

Paid-up capital

You can register a company in Singapore with just S$1; on average, most start with S$100. There may be certain situations where starting with a higher amount of paid-up capital could be advantageous or required. For example, certain regulated industries such as insurance may require a higher amount of paid up capital. Having a higher paid up capital amount may also increase financial stability, credibility, and make access to financing easier. Its a good idea to consult with a specialist if you’re unsure of the suitable capital amount to leverage initially.

It can also be increased easily in the future if needed.

How to register a company in Singapore

Before registration, company owners must gather specific information and documents set out by ACRA. These include:

• A company name
• A registered address
• A brief description of the business
• Directors’ particulars
• Shareholders’ particulars
• Details of the company secretary
• The company’s constitution, that is, the memorandum and the articles of association, is often drafted by a lawyer
• The company’s financial year, including end date

Registering a company in Singapore is quick and easy if you have all the required information, and ACRA usually completes it in a couple of hours. There is a designated website called BizFile+, where applicants can complete the process themselves or use a registered filing agent. Businesses that use a corporate secretarial firm may find this to be one of the services they offer.

What happens next?

Singaporean company law requires that company owners conduct a pre-search with ACRA to see if the proposed company name is available. Applicants should ensure that their proposed name is not too similar to other existing company names, does not infringe on trademarks, has not been reserved by another business, and is not obscene. Generally the system will provide guidance and warnings if they feel your proposed name is likely to conflict or be rejected.

Company owners can search and apply for the name for just S$15. The name is then reserved for sixty days from the date of the application, whilst supporting paperwork and information are prepared.

Once all the information and documents are ready, the application is completed on BizFile+. The fee to apply is S$300. Most companies are registered within one hour.

ACRA issues several documents, including the certificate of incorporation, but ahead of this, an email notification is sent out that includes the company registration number.

The official certificate of incorporation can be purchased via BizFile+ for S$50 and includes the company name, registration number, date of incorporation, and corporate structure. ACRA also offers a free business profile for newly incorporated companies. The certificate of incorporation and the company business profile are the baseline documents for all legal and contractual activities in Singapore.

Why choose Singapore to register a company?

With low tax rates and a transparent structure, Singapore has one of Asia’s most attractive and efficient tax regimes. Singapore’s corporate tax rate is 17%, and registered companies enjoy attractive incentives and exemptions. Some of the advantages include:

• A new Singapore tax-resident start-up company is eligible for tax reductions on the first S$200,000 of income. The first S$100,000 of chargeable income enjoys a 75% tax exemption, reducing to a 50% tax exemption on the next S$100,000 of chargeable income.
• Singaporean registered companies are exempt or can reduce double taxation on any income already taxed in another country, provided that the country is a party to the avoidance of double taxation agreements (DTAs). This benefit works in reverse, so companies may claim a reduction or exemption on income previously taxed in Singapore in a foreign country.
• A Singapore-registered company may be eligible for tax exemptions on foreign dividends, foreign branch profits, and service incomes from foreign countries if that money has already been taxed for corporation tax abroad. Qualifying criteria include the relevant foreign country having a corporate tax of at least 15%.
• Singapore does not have a Capital Gains Tax.

A private limited company is the preferred choice for entrepreneurs in Singapore. The main advantage is that this structure offers limited liability, so shareholders’ personal assets are protected from business liabilities. This credible and flexible business structure allows the opportunity to raise capital through equity. It offers access to tax incentives not offered to a limited liability partnership (LLP) or sole proprietorships.

Here are some other reasons that make Singapore so attractive for a new company:

• Singapore has an excellent digital infrastructure and in 2023 was ranked third in the World Digital Competitiveness report.
• Singapore has one of the world’s most bureaucracy-free business environments and regulatory frameworks. In 2020, Singapore overtook Hong Kong as the world’s freest economy based on the Index of Economic Freedom published by The Heritage Foundation.
• Singapore consistently ranks as one of the most accessible places to set up and run a business, according to the World Bank’s ‘Doing Business Report 2020’.
• Starting a company is quick and hassle-free via the Singaporean government’s online platform.
• Singapore is the world’s fifth-ranked financial centre in terms of competitiveness and is a well-known innovation hub, particularly for FinTech.
• Singapore is a friendly location for start-ups. The Singaporean government has introduced attractive incentives and programs to benefit local and foreign entrepreneurs. In 2017, the government created a major project called StartupSG, a one-stop shop for entrepreneurs to find access to loans, grants, and funding.

Singapore is known as one of the ‘Four Little Dragons of Asia’ because of its strategic location, robust economy, and attractive tax regime, combined with the speed and ease of incorporating a new company.

Get professional help

JCP Law offers professional guidance and support in advising individuals and companies on registering a company in Singapore. Please reach out for more information and fees associated with our services.