Can A Foreigner Register A Company in Singapore?
Registering a Business in Singapore for Foreigners
A foreigner in Singapore can register or incorporate a business and own 100 percent of its shares without any issues, just like a Singapore citizen. Anyone above the age of 18 can start a business as long as he or she hasn’t been convicted of a crime or declared bankrupt. Singaporeans as well as Permanent Residents (PR), holders of Employment Pass, EntrePass, and Dependent’s Pass, can incorporate a company in Singapore and become shareholders.
Why do foreigners incorporate companies In Singapore?
Singapore is one of Asia’s few first-world countries, with a well-developed infrastructure, a stable socio-political climate, a free-market economy, a favorable tax regime for overseas business owners, foreign investors, and international entrepreneurs to start their companies in Singapore.
Being one of the top financial centers and with the world’s busiest port, most foreigners prefer to register or incorporate a company in Singapore for a number of reasons which include robust IP protection, a flourishing start-up ecosystem, a business-friendly regulatory environment, and a very favorable funding and corporate taxation framework. Singapore is also ranked among the top five in the world for starting a company here and has a solid reputation as a financial and regional commercial hub.
Why are foreigners attracted to Singapore?
There are several factors that make Singapore an appealing location for foreigners to set up businesses and register new companies:
- A strong and healthy economy and political stability
- Strategic geographic location with superb infrastructure
- A fair tax system with low rates of taxation
- The simple registration process to incorporate a new company
- A well-educated and well-trained workforce
- Established financial system and capital market
- No restrictions on the outflow or import of capital
- Ranked No.1 in World Bank Human Capital Index 2018
- Ranked No.1 as the most competitive economy in 2019
- Ranked No.1 as Asia Pacific’s most innovative nation in 2020
- Ranked No.1 as a global infrastructure hub in 2021
- Ranked No.1 in economic freedom in 2022
Suggested Reading : Why Singapore is the preferred place to incorporate a business for foreigners
Why do foreign companies choose Singapore?
Numerous MNCs (Multinational Corporations) have selected Singapore as their business headquarters as reported by EDB. The city-state is recognized as an ideal country for business growth by entrepreneurs from all over the world, with many foreigners choosing Singapore to expand their businesses into other Asian emerging markets. Singapore is also widely regarded as the gateway to ASEAN, in addition to having one of the lowest corporate tax rates in the world. Moreover, Singapore has numerous business-friendly policies that make it simple for enterprises to establish and operate businesses here.
Top FAQs for foreigners who wish to start a company in Singapore
1. Is it possible for a foreigner to start a business in Singapore?
Yes, a foreigner can incorporate a business in Singapore using one of the 3 options listed below:
- Apply for an Employment Pass after incorporating a Private Limited Company in Singapore.
- Apply for an EntrePass and incorporate a Private Limited Company in Singapore.
- Appoint a nominee for a local director in Singapore (if relocation is not applicable).
2. Is it possible for a foreigner to register a sole proprietorship in Singapore?
Yes, this can only be done legitimately if he or she appoints an authorized agent to act on his/her behalf. This person must be a Singaporean, a Permanent Resident, or a holder of an EntrePass work visa.
3. Is it possible for a foreigner to register a partnership in Singapore?
Yes, as long as the other partner is a Singaporean who lives there as a resident. Otherwise, like in the case of a Sole Proprietorship, you should have an authorized agent acting on your behalf.
4. Is it necessary for a foreigner to live in Singapore in order to incorporate a Singapore company?
No. If relocation is not an option, then appointing a local nominee director (in accordance with the Singapore Companies Act) is required for the foreigner(s). If there are no plans to relocate to Singapore, an Employment Pass or EntrePass is not required.
5. What steps does a foreigner need to take to get an Entrepreneur Pass in Singapore?
The following criteria must be met in order to be eligible for an Entrepreneur Pass (EntrePass) work visa.
- A foreigner has already filed an application for a private limited corporation with ACRA.
- A foreigner has incorporated the company for not more than 6 months from the date of application.
- A foreigner has met the necessary prerequisites in Singapore as an investor, entrepreneur, or innovator.
6. Is it necessary for foreigners to get a work pass or visa in order to start a company in Singapore?
Yes. It is necessary to obtain either an Employment Pass (EP) or an EntrePass if a foreigner wants to relocate and work in Singapore. This will also allow the overseas applicant to act as a local director of his or her new company. If relocation to Singapore is not an option, a nominee resident director must be appointed to meet the statutory requirement and compliance. To incorporate a company in Singapore, a foreigner can select various entry options, either as a subsidiary, a branch office, a re-domiciliation, or a representative office.
What are the requirements for foreigners to set up a business in Singapore?
Work Pass / Visa
To legally set up a company in Singapore, a foreigner must first obtain the appropriate work pass or visa.
- It is essential to get either an Employment Pass (EP) or an EntrePass if the foreigner wants to relocate and work in Singapore. This will also allow the overseas applicant to act as a local director of his or her new business.
- If relocation to Singapore is not an option for the foreigner, a nominee resident director must be appointed to meet its compliance and statutory requirement.
- To incorporate a Singapore company, a foreigner can choose to have a subsidiary, a branch office, a re-domiciliation, or a representative office as an entry option.
In order to receive quick approval for the name application, it must not contain improper, vulgar or misleading words, it must not be linked to any national symbols or government organizations, and it must not be similar to existing corporate entities.
Other than the requirement that there must be a minimum of 1 locally resident individual acting as a director, there are no limitations on the number of local or foreign directors who can be appointed in a Singapore Company, as long as they meet the following criteria:
- The person must be at least 18 years old.
- There are no bankruptcies on the person’s record.
- The person has never been convicted of a crime on record.
A minimum of one shareholder is required. A corporate entity, a resident or non-resident individual can be a shareholder. There can be up to 50 shareholders in the company. It is permissible to have 100 percent foreign ownership in Singapore.
According to the Singapore Companies Act (Section 171), a qualified company secretary must be appointed within six months after the company is incorporated. This person must be a naturalized resident. A company secretary is not allowed to be a shareholder or a sole director.
Also known as the total amount of the shareholders’ fund. Setting up a new private limited company requires at least a paid-up capital of SGD 1. After the company is incorporated, the total amount can be increased at any moment.
For the following reasons, it is advisable that a foreigner applying for an Employment Pass offer at least SGD 100,000 in paid-up capital:
- A requirement for businesses working on government projects.
- Makes a strong first impression on potential customers.
- Note that a higher paid-up capital does not guarantee or expedite the approval of a foreigner’s work permit application.
Related Content : Singapore Company Registration
Related Content : Why Singapore Remains The Top Choice For Doing Business
Assisting foreigners to incorporate a business in Singapore
Whether you are a local or a foreigner starting or incorporating a company in Singapore, the entire process can be a breeze when you choose a top corporate service provider to work with you.
We have full knowledge and experience in all aspects of setting up your business in Singapore, ranging from company registration to offering corporate secretarial services, accounting and taxation services, and meeting compliance standards. Feel free to contact us to get a free consultation, we can offer you a leg-up in this process seamlessly.