If you are going to set up a business in Singapore, your mind must be clouded with numerous doubts and questions as every country has different requirements and different regulations.
In this FAQ post, we have complied a list of questions that we commonly get from our foreign customers.
Can A Foreigner Own 100% Of The Shares In A Singapore Company?
Yes, any foreigner, either a company or an individual, can hold 100% shares in a Singapore company. Singapore Companies Act makes 100% ownership of a company by a foreign individual or a corporation possible.
However, certain conditions, like having a resident director, must be fulfilled. If you are above 18 years of age and have not been held responsible for any bankruptcy or legal offense, you can own 100% shareholding of a company in Singapore.
Can I Hold 100% Of The Shares Under A Foreign Company?
Yes, a foreign company can hold 100% shares in a Singapore company. It is made possible by the Singapore Companies Act. However, there may be tax implications involved as corporate ownership in a Singapore Company will disqualify it from certain tax incentives.
Can I Be The Sole Director If I Am A Foreigner?
You can be the sole director of a company in Singapore if you are resident in Singapore, If not, you must appoint a resident director if you reside outside Singapore. Also, to note that if you are the sole director and shareholder, you will need to appoint a Company Secretary that cannot be yourself.
If you are a foreigner, you will also need to appoint a registered filing agent as you cannot self-register your company in the country.
Can I Draw Salary From My Singapore Company If I Don’t Work In Singapore?
Yes, you can draw a salary as a foreign employee of the Singapore Company even if you are doing your work overseas. You will be glad to know as well that if you perform your job wholly outside Singapore, there will not be Singapore tax on the employment income drawn by you as well.
Are There Any Restrictions On Transferring Funds Into And Out Of My Singapore Company?
No, as long as you are not operating from a sanctioned country under the United Nations Security Council. As Singapore is a member of the United Nations, Singapore will have to comply with any sanctions imposed by the United Nations against its country which may include financial transfers.
Do I Have To Pay Tax When I Transfer Funds Into My Singapore Company
Funds transferred into the Singapore Company bank account either by way of share capital contribution or a loan to the Singapore Company will not attract tax implications. Singapore does have income tax.
Is There Any Difference Between Holding The Shares Under My Personal Name And Under Another Foreign Company wholly owned by me?
The corporate shareholding will disqualify the start up from enjoying the startup tax exemption provided to new companies that lowers the effective tax rate on the first $100,000 of profits to 4.25% and lowers the effective tax rate on the next $100,000 of profits to be 8.5%. One of the qualifying criteria for the start up tax exemption is that all the shareholders should be individuals.
The introduction of additional layers of companies may result in higher scrutiny by the banks when opening a bank account.
Can Another Company Be Named As The Director?
Unlike some other countries like Hong Kong, it is not possible to appoint a company as a director of a Singapore company. In addition, there must be at least one local resident director.
Can I Work In Singapore If I Open A Singapore Company?
No, opening a company alone does not automatically allow you to work in Singapore. An employment pass (EP) is also required, which gives the right to work in Singapore.
Employment pass is a kind of work permit that you will need to reside in Singapore and work. You cannot work in Singapore without the employment pass. The authorities are now more strict on the issuance of employment pass. We can assist to apply and advise on the employment pass.
Do Foreign-Owned Companies Need To Be Audited?
All the companies registered in Singapore need to be audited. However, Small companies whose revenue did not cross $10 million annually or whose assets at the end of the reporting period were less than $10 million are exempted from audits. Also, businesses must hold annual meetings and file financial statements.
Do I Have To Travel To Singapore To Attend Board Meetings If I Am A Director?
Its not required. Especially in the current COVID19 situation, there’s provisions made to hold a virtual meeting or have written resolutions passed.
Do I Have To Travel To Singapore To Open A Bank Account?
No, in view of the recent COVID situation, we have contacts with bankers that is able to do remote bank account opening with video verification of your identity. Without requiring you to travel to Singapore, we can also incorporate the business.
Conclusion
Those were some of the most asked questions by foreigners. If you want answers to more questions, do drop us an email in the contact us form and we will respond within one working day.
