Did you know Singapore is the second-best place after New Zealand to do business according to a report from World Bank? Yes, with a score of 86.2 out of 100, Singapore offers a fast and easy way to start a business. And, isn’t it what every business owner wants?
Substantial investment and trade are what makes Singapore one of the most competitive countries in Asia to make your business expand. With strong government support and a relatively low tax rate, Singapore is undoubtedly a thriving financial hub. On top of that, Singapore has a myriad of opportunities for foreigners as well as the locals.
So, if you are about to expand your business and taking it to Singapore, this post is for you. We will guide you through the system of opening your business in the financial hub.
Requirements for Setting up Your Company
You can register your business in Singapore as:
- Private Limited Company
- Limited Liability Partnership
- Sole Proprietorship
Taking scalability into account, many new companies register themselves as “Private Limited Company” with Accounting & Corporate Regulatory Authority (ACRA). Also, in this option, shareholders are not liable for losses and debts apart from their share capital.
Since the Singapore Companies Act governs the private limited company, it should comply with its laws under the Inland Revenue Authority of Singapore (IRAS) and ACRA.
Following are the requirements for the establishment of a company:
- Directors: You must employ at least one director who should reside in Singapore.
- Company Name: You need a company name, which must be approved by the ACRA.
- Shareholders: You will need no less than one shareholder if you want to set up your business in Singapore.
- Company Secretary: You must have a company secretary, who should be a resident of Singapore.
- Paid-up capital: You will need at least S$1.00 of paid-up capital.
- Registered Address: To establish a business in Singapore, you will need a physical office address.
Once a new company has been setup, you can purchase a Business Profile from ACRA. It is an electronic report that includes relevant information about your business. It will show the registration date, registration number (UEN), details of shareholders, etc.
This report is normally used to open a corporate bank account, apply for loans and grants applications and is required for most official transactions.
Do I have to be physically there?
No, for establishing a business in Singapore, your physical presence is not required. However, to open a corporate bank account, some banks may ask you to be physically present.
How to open a Bank Account
In Singapore, opening a bank account is quite easy. Most of the banks will generally require the company’s majority directors and the account signatories to be present there to sign the paperwork.
But if you cannot be physically in Singapore, we have contacts at banks that can do remote bank account opening for our clients. Due to the increasing stringent nature of the Anti-Money Laundering (AML) requirements, a bank account will take up to 14 days to open.
Singapore’s Tax Regime
Singapore has an excellent and business-friendly tax exemptions and incentives. If you open a company in Singapore, you have to pay an 8.5% tax on your first S$300,000 of annual profits and only 17% after that.
Additionally, there is no dividend or capital gains tax. Singapore also has double tax avoidance treaties with numerous countries to prevent double taxation.
Post-Business Registration Formalities
- Certificate Of Incorporation
- Business Profile
- Licenses And Permits
- GST Number
- CPF Registration
- Custom Registration
You will get an email from ACRA confirming the successful integration of the company. Since it includes the registration number of the company, it would be treated as the official certificate of incorporation in Singapore.
You can also obtain a soft copy of the business profile of your company, which will include registration number and name of the company, registration date, business activities, registered address, paid-up capital, and details of directors, shareholders, and secretary of the company.
Several companies need the approval of a license from government authorities, including private schools, travel agencies, video companies, money lenders, banks, liquor distributors, childcare centers, financial advisers, and importers, retailers, and wholesalers of liquor.
You should get the appropriate permits and licenses before commencing the operations of the company.
You should also get a goods and services tax registration if the expected turnover of your company is more than S$1 million per year.
You should also register yourself with the Singapore Central Provident Fund (CPF). In this compulsory pension fund scheme, the employer and the employee (Singapore citizen/permanent resident) contribute a percentage of the monthly salary to this fund.
Also, register your company with Singapore’s customs if your business involves exporting or importing.
So that was a lot of information about establishing your business in Singapore. It will be really good if you can visit Singapore as it’s a lovely country to stay in and not just to do business. If you still have questions unique to your situation so you can drop us a note. and we will assist where we can.
Lastly, if you wish to have an efficient and fuss free Company Incorporation, please take a look at our incorporation packages.