SINGAPORE COMPANY REGISTRATION


WHY SINGAPORE?

Singapore is a thriving and bustling economy, with one of the highest per capita income in the world. It is a leading international financial centre in Asia and one of the best places in the world to conduct business. Various studies have placed Singapore as the world’s 2nd best business hub, just after London.

With its open economy, strategic geographical location and excellent infrastructure, Singapore is a top location to launch pad investments into the region.

Singapore has a high quality and educated workforce. With English as its main working language, and most people also fluent in either Chinese, Malay or Tamil, Singapore makes a logical choice to bridge the cultural and language barriers when doing business with particularly China, Indonesia and India.

Singapore also has a stable and very pro-business government. Its effective income tax rates are among the lowest in the region. Furthermore, it has an extensive network of double tax treaties and international trade agreements which provide Singapore companies with a competitive advantage that set them apart from others.

At APACTRUST, we can assist clients to set up base in Singapore and do business with regional countries.

Advantages of Singapore as a Base to Set up a Company
  • Rated #1 in the world by World Bank for ease of doing business.
  • Rated #1 as the most politically stable country in Asia
  • Rated #1 with the best labor force in the world
  • Rated #1 in Asia for quality of life
  • Ranked the third wealthiest nation in the world by Forbes Magazine
  • Ranked as the third most globalized economy among 60 of the world’s largest economies
  • Low corporate tax rates: about 8.5% tax on up to the first $300K profits and a flat 17% tax thereafter. In addition, newly Singapore set up companies enjoy full tax exemption on the first $100K of chargeable income for their first three years of assessment.[Update – from 2020 onwards:
    about 8.5% tax on up to the 1st $200K profits and flat 17% thereafter
    Newly set up Singapore companies will enjoy a 75% tax exemption on the first $100K of chargeable income for their first three consecutive years of assessment]
  • There are no capital gains taxes in Singapore
  • There is no estate/death/inheritance tax in Singapore
  • Dividends paid by a Singapore Company are not taxable in the hands of the shareholders
  • Low personal tax rates start at zero percent and max out at 22 percent for chargeable income above $320K
  • Generous Government grants, from time to time, provided for investments in technology, training and productivity enhancement solutions.
  • Generous Tax Rebates, granted from time to time[YA 2019: Corporate Tax Rebate of 20%, capped at $10K]
  • Singapore has no restrictions on foreign ownership of business.
  • The repatriation of profits and the import of capital are freely allowed. Shareholders, including investors who receive dividends out of company profits, are exempt from Singapore tax.

Singapore is one of the best places to set up company, run your business and launch pad into Asia Pacific.

Minimum Requirements of a Singapore Pte Ltd
  1. Minimum Share Capital
    • No minimum
    • Any Currency
    • Can be S$1/-
  2. Minimum Number of Shareholders
    • One
    • Can be individual or corporation
    • No local participation required. Can be 100% foreign owned

    For nominee shareholders, click here

  3. Maximum Number of Shareholders
    • Fifty

    (Beyond which a Public company would be required)

  4. Minimum Number of Directors
    • One
    • Must be individual. Corporate directorship is not allowed.
    • At least one director must be a Singapore resident individual

    For nominee directors, click here

  5. Company Secretary
    • One
    • Must be Singapore resident individual

    For Corporate Secretarial Services, click here

  6. Registered Office
    • Required to be an approved address in Singapore

    For Registered office Services, click here

Steps to Incorporation
  1. Provide the proposed Company Name Please provide us with at least 2 preferred choices of name in order of preference.Note:Certain names are not allowed to be registered such as:-
    • undesirable name
    • name that is identical to any existing entity
    • name that has already been reserved
    • name which the Minister has directed not to accept for registration
    • name that infringe upon any trademarks

    We will do an online name check and reserve the name for you if the name is available.

    A reserved name can be held for 60 days from the date of application and can be extended for another 60 days.

  2. Points To Note
    1. Proposed Principal Activities
      Please note that certain activities require licensing or approval from the relevant authorities (e.g. Funds management. Finance company etc)
    2. Share Capital
      • There is no minimum share capital.
      • Share capital can be in any Currency.
      • Share capital can start from as low as S$1/-

      Clients can choose to start with a minimal share capital and then inject in funds to increase the share capital after the company is incorporated.

    3. Shareholders
      • A minimum of 1 shareholder is required.
      • Shareholder can be either individual or corporation.
      • Foreign shareholders are permitted. Foreign shareholders can hold 100% of the shares in a Singapore Company.

      For Nominee shareholder, click here

      • Only individuals can be directors.
      • Foreigners can be directors.
      • However, at least one director must be a Singapore resident individual.
      • An individual holding a Singapore Employment Pass may act as the local director provided it is the Company sponsoring his Employment Pass or a related group Company and subject to approval by the Immigration authorities.
    4. Company Secretary to be provided by ApacTrust
    5. Registered Address  To be provided by APacTrust
  3. Sign all incorporation documents                Upon Receipt of the Incorporation Form, we will prepare all the necessary incorporation documents for your signatures. These include the Company’s Constitution, Share Allotment, Consent to Act etc.Thereafter, please return the signed original documents to us together with payment for our fees for us to commence the incorporation process with ACRA.
  4. Timeline for Incorporation                                If documents are complete and in order, a company may be incorporated within a few hours in the same day.Once the Company is incorporated, we will forward you a copy of ACRA’s Notification of Incorporation which will state the incorporation number and incorporation date of the Company. We will also provide you with a free printed business profile of your newly setup company from ACRA.
  5. “Know Your Client”                                           We are required under the law to conduct due diligence and appropriate ‘Know-Your-Client” process.For this, we would require documents to prove the identity of all directors, shareholders and ultimate beneficial owners (natural persons).Please contact us for details.
Nominee Shareholders and Directors

Overview of Nominee Services

At the time of company registration, the Singapore Companies Act Chapter 50 requires at least one resident director and one resident shareholder. ‘Resident’ is defined as a Singaporean citizen or permanent resident, or someone who are Employment Pass holders or Dependent Pass holders. Nominee services come in handy to facilitate nominee resident director and nominee shareholder for companies till such time as a suitable person can be found. For some reasons, companies do use Nominee services (s) to keep their identity hidden or get anonymity of the beneficial owner from public access.  Another purpose is to keep investment decisions hidden from their competitors and to facilitate the business in the other countries.

Nominee Director

Every Singapore-registered company must have at least one local director as regulated by The Companies Act of the country.  If a foreigner establishes a business in Singapore but lacks a local director, the foreigner can “get” a director for a charge and this director is commonly known as a ND (Nominee Director) or frequently described as a “local director” in the same context. The ND must be a Singaporean citizen or Permanent Resident with a local address.

The ND is usually appointed to satisfy statutory compliance only and has no role in the company’s financial or operational matters.  In other words, the Nominee Director will not sign any personal guarantees relating to the firm’s debts (if any), nor will the Nominee Director sign any documents on behalf of the company.

The need of having a local director in every company in Singapore is compulsory simply because the local authorities require someone to hold accountable in the event if the company does something illegal, such as not paying taxes, breaking any laws or committing a fraud. If Singapore did not impose the ND requirement, the company’s foreign owners may just flee and abandon it.

To avoid this, the Singapore government enacted the local director requirement, assuming that the person who serves as an ND for a company will perform the appropriate due diligence to ensure that the company remains compliant with the law.

As a result, an ND has the same obligations and responsibilities as a normal director under Singapore’s Companies Act. Directors are also responsible for ensuring that the company’s statutory books are kept up to date, the regulatory filings are made on time, accurate accounting records and all annual accounts are well maintained. In addition, they need to ensure that the shareholders’ and directors’ meetings are held in accordance with the law, and that their fiduciary duties to the company are upheld at all times.

Nominee Shareholder

Every company must have at least one or two shareholders, depending on the type of entity, according to Singapore Companies Act. The shareholder must be a Singaporean or a permanent resident in Singapore. However, the legislation also allows foreign investors to appoint nominee shareholders to act on their behalf when setting up companies in Singapore.

In Singapore, the nominee shareholder(s) can be a private or a corporate entity and will be entrusted to hold the shares on behalf of the company’s owner.  The nominee shareholder will generally enter into an agreement with the company owner, also known as a Declaration of Trust, in which he or she will not be able to exercise voting rights or deal with shares without the company’s beneficial owner’s permission. They are usually engaged in service to protect the company’s owners’ privacy and are only allowed to operate on the instructions of the beneficial owners. Nevertheless, the nominee shareholders do not have access to the company’s bank accounts and are unable to make payments on the company’s behalf.

Benefits of engaging ApacTrust Nominee Services in Singapore

Engaging nominee services with us after your incorporation has several advantages:

  • A customizable solution to help you meet ACRA’s regulatory obligations swiftly and easily
  • Access to a knowledgeable professional who will ensure that your business is compliant at all times, including ensuring that all essential documents are filed on time with ACRA and IRAS.
  • A qualified person to carry out director responsibilities and duties with the utmost honesty and integrity.
  • An experienced professional who is familiar with all of the rules, regulations and compliance
  • Provides proof of the company’s local office address
  • Meets Singapore corporate compliance standards and fulfils its requirements

Should you need assistance or would like to find out more about our Nominee Services, talk to us today for a free consultation. Our business development team will be pleased to assist you.

Post Incorporation Compliance

After incorporating your company, there are a number of tasks that need to be completed  before it can start operating. Some of the tasks involved mandatory administration, such as buying a company seal, setting up statutory books, registering for taxes and licenses as well.  Others include opening of bank account(s), insurances as well as setting up an office also need to be sorted and carried out.

So what are the post-Incorporation requirements for a company in Singapore? As stated by the law, a set of statutory requirements will need to be followed by the businesses throughout their existence within the Singapore jurisdiction.

Tasks to be done after Company Registration Singapore:

Issuance of Incorporation Certificate

ACRA will send the e-copy of incorporation certificate via email that needs to be printed and filed. Though the issuance of a hard-copy certificate is not mandatory in Singapore, it could be purchased by paying S$ 50 and the processing period takes at least 5 working days.

Buy Company Business Profile               

After registration of the company, purchase of business profile is required. It will be available for download in PDF format usually within an hour of purchase. In Singapore, the business profile generally contains the company name, registration number, date of incorporation, principal business activities, registered address, et cetera.

Memorandum and Article of Association

Companies are allowed to design their own constitutions or also may choose to adopt by default. Memorandum and Articles of Association (M&A) is the company’s constitution and should contain the following information:

  1. Name of the company
  2. Location of the Registered Office
  3. Liability of the members
  4. Company’s capital structure
  5. Names of the subscribers and the number of shares subscribed by them
  6. Principle activities of the company (optional)
  7. The rules governing the internal management of the company
  8. The set of the article is provided in the Fourth Schedule of the Singapore Companies Act.

Appointment of Company Secretary                     

In Singapore, it is mandatory to appoint a qualified company secretary within six months of incorporation for every private limited company.  He/she must be an ordinary resident of Singapore with requisite knowledge of Singapore Companies Act and experience to handle the function of a corporate secretary. The position cannot be left vacant for more than 6 months.

Appointment of Auditor (if applicable)   

An auditor must be appointed within 3 months of a company having been incorporated unless exempted from auditing. Singapore companies are exempt from appointing an auditor if they satisfy two out of the following three conditions:

  1. The total annual revenue of the company must not exceed S$ 10 million;
  2. The total assets of the company for the financial year end must not exceed S$ 10 million;
  3. The number of full-time employees at the end of the financial year must not exceed 50.

Usually, most new startups meet all the 3 above conditions and are spared from appointing  an auditor.

Setup Accounting System

When a company is set up, accounting services are needed to take care of financial statement compilation and to keep track of the company’s expenses and income. Accounting is essential for financial management, profitability, and tax regulations. To abide by Singapore’s tax laws, it is important to keep accurate track of the income and expenses of your business from its very first day of operations. With this process this will help you to keep track and manage the profitability of your business and it is mandatory that you must maintain accurate records of these transactions. A good accounting system software can manage this function and implementing it is a task that you should not delay. In actual fact, one should set up the accounting system before any business is transacted. Selection of accounting software(s) should also be consulted since most of these systems require training along  with prior familiarity of your staff in order to reduce the learning time significantly. Another alternative is to set up your own accounting system by outsourcing this function to an external accounting firm.

Open Bank Account

Ideally, once the company has been incorporated, a corporate bank account needs to be opened.  In order to open a corporate bank account, a certificate of incorporation, the company’s Constitution, a board resolution sanctioning the opening of the account and proof of identity from the beneficiaries are required. Most banks in Singapore also require the authorized signatories and directors to be physically present for the signing of forms and documents for opening the bank account.  Nevertheless, some banks exceptionally allow the applicant to open the account in an overseas bank in front of a notary public. Once the bank account has been open, the shareholders will need to deposit their investment share capital towards the initial capital of the firm.

Issuance of Business Licenses and Permits

For some industries in Singapore, they are required to obtain business licenses before commencing operations.  The few industry sectors are restaurants, travel agencies, educational institutes, import/export of goods and financial service, all need to obtain business licenses or permits. After company registration, some businesses in certain industries must apply for the license right away and it is notable that a business is not allowed to operate until it obtains the license.

Goods and Service Tax (GST) Registration

In Singapore, the Goods and Services Tax (GST) is a Value Added Tax (VAT). A tax rate of 7% is levied on goods imported into the country and on the supply of goods and services as well. Not all business are required to register for GST except the followings :

  1. Has revenues of more than S$1 million in the last 12 months, or
  2. Is projected to do so in the course of the next 12 months.

Smaller businesses in Singapore that don’t meet the above mentioned are not required to register for GST but can do so on a voluntary basis.

Set up Statutory Books

In Singapore, statutory books are the legal records of any company that need to be kept at its registered office. Since they are public documents, they must be kept up-to-date and available for inspection upon request anytime.  Statutory books should contain:

  1. Updated information on corporate officers such as directors, auditors, and secretaries; the information should appointments and resignations.
  2. A list of shareholders detailing how many shares they own and / or transfers.
  3. Information containing fixed or floating charges and debentures used to secure any borrowing by the company.
  4. Resolutions and minutes from AGM meetings.

Hire Employees

Employment is a regulated area in Singapore with basic rules and regulations especially on  manpower matters, you need to make sure that you are in compliance with the applicable laws.

  1. You must apply and secure a valid work pass first if you are hiring a foreign employee
  2. You must make necessary contributions to statutory funds such as Central Provident Fund, Skills Development Fund for Singapore citizens and permanent residents

When hiring employees, a standard employment agreement might be necessary to ensure it follows the employment regulations of Singapore consistently.  It can also avoid discord and morale challenges among employees that may result from differing employment terms.  For more information, refer to the Employment Act of Singapore.

Other Essentials

There are other essentials that need to be purchased or receive after your company is incorporated :

  1. Share certificates for each shareholder.
  2. Company’s Seal also called as common seal
  3. A Rubber Stamp for the company
  4. Business Cards
  5. Company’s website (domain name registration) and email addresses
  6. Invoice and letterheads or any other official documents of the company must bear its UEN no.

Lastly, to keep your Singapore’s company in good standing, it is important to take care of your post-registration tasks with good practice.

Without professional guidance, these tasks may be daunting to a new entrepreneur, particularly if you are a foreigner who is not familiar with incorporation legislation in Singapore. It may be good to seek help from us that can assist you in incorporating your company smoothly. Give us a call to serve you.

 

Company Secretarial Matters

Every company incorporated in Singapore must have an appointed company secretary to ensure that the company complies with regulatory and reporting requirements. The company secretary must be ordinarily resident in Singapore and the office of company secretary cannot be left vacant for more than 6 months at any given time.

A director can also act as company secretary if he is not the sole director of the company.  In Singapore, a company secretary is entrusted with the authority to validate documents or formal proceedings of the company. The appointed company secretary may be required to execute official documents with a company director under the common seal. In general, a company secretary can also issue certified copies of company resolutions along with any one of the directors as a proof of passing of the resolution.

Though the Singapore Companies Act doesn’t really define the role, duties and responsibilities of a company secretary, the appointed person is the officer primarily responsible for administrative and reporting functions mandated by law. Therefore, it is the duty of the company secretary to assist the company directors in ensuring that the company meets all its regulatory obligations of Singapore.

 Key Roles of a Singapore Company Secretary

In Singapore, the general roles and responsibilities of a Company Secretary can be broadly categorized under the followings :

  1. Roles & responsibilities to company: to ensure all relevant statutory obligations of Singapore are met, good corporate governance is practiced, business interest of the company is always protected and is present recurrently at the company’s registered office address.
  2. Roles & responsibilities to company directors: to serve as an advisor to the directors, share timely information with all the directors during the board meetings and provide the support that is needed.
  3. Roles & responsibilities to company shareholders: to communicate with the shareholders regularly and disseminate financial statements to shareholders at the Annual General Meeting as well as to ensure their interests are protected too.

Additionally, these are the key roles of a Singapore company secretary as per ACRA :

  • maintain the company statutory registers, records and minutes of AGM
  • arrange meetings for shareholder(s) and director(s)
  • lodge and file all necessary documents timely required by law
  • provide administrative support for meetings
  • assist in the implementation of corporate strategies by ensuring that the board’s decisions are properly communicated and carried out
  • stay updated on relevant developments and changes in statutory as well as the regulatory obligations
  • communicate regularly with shareholders at all time
  • advise on legal and compliance frameworks and to ensure that the company meets all its legal obligations

Fiduciary Duties of a Company Secretary

ACRA recognizes a company secretary to be an officer of the company with the following fiduciary duties :

  • never make illegitimate profits from personal dealings for/with the company
  • always act in the best interest of the company
  • always carry out duties with reasonable care and diligence
  • always avoid conflict of interests

At ApacTrust, we will fill in the various roles required of a company secretary as well as advising the Board of Directors on all matters pertaining to your business.  This will allow you to offload your paperwork so that you can focus on other things. Leave the rest to us, let our professional team of company secretaries who can work to understand your business and its needs.  Call us today for a free consultation.

Different Business Entities

There are many business structures to carry on a business in Singapore. One of the most common ways would be to start a Private Limited Company (“Pte Ltd Company”). There are also different business entities like sole proprietorship, general partnership, limited partnership and limited liability partnership.

Sole Proprietorship

A sole proprietorship is the least complex way of starting a business.

In order to become a sole proprietor, one must register the business name with ACRA and comply with the Business Names Registration Act 2014 and the administrative requirements thereafter.

Sole proprietorships are convenient and easy to manage.

The sole proprietor is accountable only to himself and is subject to much fewer regulations. For example, a sole proprietor is spared from preparing statutory audited financial statements. He is only required to maintain accounts for tax purposes. He needs to pay tax on the sole proprietorship profits at his personal income tax level. This may or may not be tax advantageous if his personal income tax rate is higher than the corporate tax rate.

One other significant disadvantage of a sole proprietorship is that the sole proprietor remains personally liable for all the business’s debts. This is because the sole proprietorship is not a separate legal entity from the sole proprietor.

Another major drawback is the sole proprietorship limited access to capital and financing. Most investors may not find investing in a sole proprietorship appealing.

A startup may choose to register a sole proprietorship first and then upgrade it to a Pte Ltd Company at a later date when the business expands.

General Partnership

Like a sole proprietorship, partners in a partnership own the assets of the partnership but will also personally incur all of the liabilities and obligations of the partnership. General partnerships offer no liability protection to the owners. Each partner has personal and unlimited liabilities for all the partnership debts. Each partner may also be personally liable for the actions of the other partners in relation to the partnership. Personal assets of an individual partner can be considered as partnership assets and be used to satisfy partnership debts.

Profits generated by the partnership are taxed at the personal level of the individual partners. Losses suffered by the partnership can be offset against the partners’ personal income. This may or may not be tax efficient to the individual partners as compared to setting up a Pte Ltd Company, especially if their marginal personal tax rates are higher than that of the corporate income tax rate. The prevailing corporate income tax rate in Singapore is 17%. On the other hand, marginal personal tax rates for high earning individuals can reach 18% to 22%.

A general partnership cannot have more than 20 partners. This is with the exception of partnerships for certain regulated professions such as lawyers and public accountants.

A general partnership is formed by registering with ACRA and generally by the partners entering into a Partnership Agreement. The Partnership agreement acts like a “constitution” and will “govern” the relationship between the partners, how the partnership is run, how the profits are to be distributed etc.

Limited Partnership

The limited partnership (LP) is a hybrid of a sole proprietorship and a general partnership. It was first introduced in 2009 in Singapore.

There are two types of partners in a limited partnership: the general partners and the limited partners.

General partners in a LP have similar rights and liabilities as partners in a general partnership. For example, general partners oversee the day-to-day operation of the LP. While they are entitled to take part in the management of the LP, they are also subject to unlimited personal liabilities for the debts and obligations of the LP.

On the other hand, a limited partner in a LP is not personally liable for the debts or obligations of the LP beyond his agreed contribution. This is generally spelt out in the Partnership Agreement. Conversely, a limited partner is not entitled to participate in the management of the LP and is not an agent for the other partners and the LP. However, if the limited partner participates in the management of the LP, he may no longer avail himself of the limited liability protection and may incur unlimited personal liability for the LP as if he is a general partner. Limited partners are basically silent investors not involved in management.

The limited partner has to register under the LP Act or he will be deemed to be a general partner.

LP will not dissolve on the death, dissolution, bankruptcy or liquidation of a limited partner.

Limited Liability Partnership 

A limited liability partnership (LLP) gives owners the flexibility of operating as a partnership while having a separate legal identity like a Pte Ltd Company.

This means that the LLP is seen as a body corporate and has a legal personality separate from its partners. Thus, debts of a LLP remain at the LLP without extending to become the personal liabilities of the individual partners. Partners will also not be personally liable for the wrongful act, misconduct, omission or gross negligence of any other partners in the LLP.

Also, like a Pte Ltd Company:-

  • LLP can sue and be sued in its own name. It has its own legal rights and obligations.
  • LLP has perpetual succession until it is dissolved under the Limited Liability Partnership Act.
  • Any changes in the partners of a LLP will not affect the existence, rights or liabilities of the LLP

However, unlike a Pte Ltd company, a LLP has no directors or shareholders. The partners are the owners who direct and manage the LLP. However, a LLP must appoint at least one manager, who is a natural person, of at least 18 years of age and ordinarily reside in Singapore.

The relative rights and obligations of the partners vis a vis each other and the LLP are generally spelt out in the Partnership Agreement. The Partnership Agreement would also spell out how the LLP is to be managed and how profits are to be split. Matters not covered under the Partnership Agreement will be governed by the first schedule of the Limited Liability Partnership Act.

A partner of a LLP may cease to be a partner by following the terms in the Partnership Agreement or in the absence of a Partnership Agreement, by giving thirty days’ notice of his intention to resign.

Private Limited Company

private limited company is a limited liability company incorporated under the Companies Act in which the shares are held by less than 50 persons (can be individual and/or company) and the shares are not available to general public to acquire. In Singapore, most of the privately held companies are set up as private limited companies with their names end with “Private Limited” or “Pte Ltd”.

A private limited company is the most preferred type of business entity for serious entrepreneurs (as opposed to sole proprietorship or limited liability partnership) in Singapore.

To incorporate a private limited, please contact us.

Branch vs Subsidiary
  1. What is a Branch Office and what is a Subsidiary Company?A branch office is a registered entity that is only an extension of its parent organisation (main/head office). Branch office bears the same name and carries on the same business as that of the parent. It may be located at different areas in the same country or in different countries. Legally, there is no separate legal identity between the branch and its parent.A subsidiary company is a limited liability company incorporated whose shares are held by another company known as the Holding Company or Parent Company. A subsidiary has a separate legal identity from its holding company. It can carry on the same or different business activities as its parent. A subsidiary company may have a completely different name from that of the holding company.
  2. Advantages and Disadvantages of Branch Office versus Subsidiary CompanyAdvantages and disadvantages of both types of organisation are summarised below:
    BRANCH OFFICE SUBSIDIARY COMPANY
    Liabilities Liabilities of the branch extend to the parent. Liabilities are limited to the Subsidiary.
    Ownership Interest A branch is a mere extension of the parent. Hence, the parent “owns 100%” of the branch. The holding company can have varying ownership interest up to 100%.
    Compliance Administration A Singapore branch office owned by a Singapore parent company is easier in compliance administration as there is no requirement to perform separate annual compliance filings and corporate secretarial formalities.

    However, where the branch office is owned by a foreign company, the local branch will have to comply with local corporate secretarial formalities and annual filing requirements including provision of audited financial statements of the Foreign Head Office and the Singapore branch.

    The subsidiary company has to comply with Singapore annual filing requirements and corporate secretarial formalities.
    Taxation A Singapore branch office owned by a Singapore business entity is not taxed under its own name as it is an extension of the local parent. The branch’s profit will be consolidated and taxed at the parent’s level.

    If the branch office is owned by a foreign company, the profits generated by the Singapore branch will be taxed in Singapore. The prevailing corporate tax rate is 17%.

    Branch office usually does not enjoy tax benefits and exemptions meant for local resident companies. Furthermore, they generally cannot access the double taxation treaties entered into by Singapore.

    A subsidiary incorporated in Singapore is taxed under its own name. The prevailing corporate tax rate is 17%.

    It may enjoy tax benefits and exemption if it meets qualifying criteria.

    Generally a resident company is able to access the double taxation treaties of Singapore.

  3. Registration of Branch Office in SingaporeBefore any activity can be carried out in Singapore with a view to generate profit on a regular basis, it has to be registered with the Accounting and Corporate Regulatory Authority (“ACRA”) as a business entity. A foreign company with intention to carry out business activities in Singapore has to register a business entity with ACRA before doing so.Registration with ACRA can be done via engaging the services of law firms, accounting or corporate secretarial service firms. Below are some considerations for registering a branch office:
    Name: Name of the Singapore branch office has to be the same as the parent organisation, unless that name is identical to another existing local business, or is undesirable (vulgar, obscene or offensive in nature) or prohibited by order of the Minister for Finance.
    Officers: The Singapore branch has to appoint at least 1 authorised representative who is at least 18 years old and is ordinarily resident in Singapore (Singapore citizen, permanent resident or a foreigner who has been issued with an employment pass in Singapore).

    Foreign companies could relocate their staff to the Singapore branch office by applying for employment passes for the staff after the successful registration of branch office.

    Registered Address: The Singapore branch is required to have a registered office address in Singapore.

    The documentation needed for the branch office registration is as follows:

    1. Certified true copy of the Certificate of Incorporation of the parent organisation;
    2. Certified true copy of the Constitution (Memorandum and Articles of Association) of the parent organisation (where applicable);
    3. Latest audited financial statements of the parent organisation as required in its country of incorporation;
    4. Particulars of shareholders and directors of the parent organisation; and
    5. Details of registered address in Singapore;

    If any of the above documents are not in the English language, it will have to be translated into the English language by a recognised translator.

    Time taken to complete registration of branch office is 1 to 2 days if there is no necessity to seek approval from relevant authorities for the type of business activities of the branch office. Otherwise it may take 1 to 2 months to complete the registration.

  4. Incorporating a Singapore CompanyThe following summarises the procedure of incorporating a limited liability company in Singapore:
    Name Restriction: There is a need to reserve the desired name of the new company before incorporation. Up to 3 choices of names can be submitted to us to check for availability. Usually the desired name is approved for use unless that name is identical to another existing local business, or is undesirable (vulgar, obscene or offensive in nature) or is prohibited by order of the Minister for Finance.
    Shareholders: At least 1 shareholder is required for incorporation.

    Either an individual or a business entity can be the shareholder. There is no restriction on foreign shareholdings.

    Bearer Shares: No bearer shares are allowed in Singapore.

    However, APacTrust will provide nominee shareholders if required to ensure confidentiality of beneficial ownership (subject to client due diligence).

    Share Capital: No minimum. Share Capital can be as low as S$1.00.
    Directors: A minimum of 1 individual director is required who must be a Singapore resident individual.

    No corporate directorship is allowed.

    Company Secretary: A Singapore resident individual is required to be appointed as the Company Secretary (APacTrust can provide you with such service).
    Registered Office Address: Singapore registered address is required (APacTrust can provide if required).
    Time Frame to Incorporate: For application of name: 1 to 2 hours.
    For incorporation: half a day to 1 day.
    Bank Account: Bank account can be easily opened in Singapore with most major local and international banks.

    APacTrust can assist in providing bank introduction.

Characteristics of a Private Limited Company

Setting up a Private Limited Company (“Pte Ltd Company”) is by far, the most popular and common business form.

A Pte Ltd Company is an artificially created person. It is a separate legal entity from its members and those who manage its operations.

The key characteristic of a Pte Ltd Company is that the company remains unchanged even if the identity of its stakeholders changes.

A company can own property in its own name. Even if one person owns all the shares in a company, he does not own the company’s property or have any equitable interest in the company’s property.

Also, debts and liabilities of the company will remain at the company. Members of a company cannot be held liable for the debts of the company.

A company can open a bank account in its own name. It can also sue and be sued in its own name.

The greatest advantage of having a Pte Ltd company as a business form is the limited liability protection it offers to the owners. Shareholders are not liable for any debts of the company beyond the agreed paid up capital.

Also, a company has much easier and wider access to financing and capital as compared to sole proprietorships or partnerships. New investors can participate easily in many different ways through different types or classes of shares, bonds, financing instruments and structures etc.

A Pte Ltd Company is managed by its directors. Shareholders, who are not directors, cannot participate in the management and operation of the company.

Directors of a Singapore Pte Ltd Company must only be natural persons of at least 18 years of age. Every Singapore Pte Ltd Company must have at least one director who is ordinarily resident in Singapore.

The income of a Singapore Pte Ltd Company is taxed only at the company’s level. The corporate tax rate for Singapore is currently 17%, which is generally lower than the marginal tax rate of high earning individuals, which can run from 18% to 22%.

A Pte Ltd Company can distribute dividends to its shareholders from its after taxed profits, without paying any further taxes such as dividend withholding tax. Dividends from after-taxed profits are not taxable in the hands of the receiving shareholders.

Shareholders of a Singapore Pte Ltd Company can be both individuals and body corporates.

A Singapore Pte Ltd Company can be owned by both locals and foreigners. Foreign ownership of up to 100% is generally allowed in Singapore.

Employment Passes & Visas

The Employment Passes (EP) in Singapore permits foreign professionals, managers and executives to work in the country. Applicants need to earn at least $4,500 a month and have recognized qualifications. Employers also need to demonstrate that they have fairly considered all jobseekers before applying for the EP.

Work passes in Singapore allow all foreigners who intend to work in Singapore and they must have a valid pass (commonly known as a work visa) before they start work in the country. If employers are engaging foreigners to work in Singapore, they must ensure that they hold a valid pass.

Are you a foreign business owner looking to expand your footprints to Singapore or having a local firm here looking to hire from abroad? Visa applications and renewals can be daunting and time-consuming, especially for those who are new to the application procedures.  Just leave your visa applications to us, we are licensed by Singapore’s Ministry of Manpower (MOM) and we help foreign entrepreneurs to open their business and move to Singapore for years. We also help them to navigate Singapore’s immigration regulations and gain employment passes for their employees to work here legally.  You can rely on our professional team for the right advice and to support your visa application quickly and affordably.

Call us today to enquire more.

Directors’ Duties

In Singapore, every company requires directors as well as officers to control and manage its affairs. Singapore Companies Act mandates that a company must appoint at least one director. In addition,  one director of each company must be a local resident of Singapore and the person should be at least 18 years of age and not disqualified by law to act as a director to fulfil their statutory duties as set forth by the Company Law. Likewise, they also need to understand the procedural aspects of their compliance to ensure that no breach occurs. In other words, all directors must abide by the common law and are answerable to the company’s shareholders collectively.

Statutory Books & Filings

Each company in Singapore must keep a register of its members and statutory books at the company’s registered office lodged with the Accounting and Corporate Regulatory Authority (ACRA). Furthermore, minutes of directors and shareholders’ meetings must be properly documented and the minutes of the shareholders’ meeting can only be inspected by the members.  Any changes in the  statutory information must be lodged with ACRA in the tabulated forms within specified time limits as specified by the Companies Act. On top of that, an annual return must be filed with ACRA along with a copy of the audited accounts within a month from the date of the Annual General Meeting  except if it is an exempt private company.  In other words, an exempt private company has an obligation to file an exempt private company certificate which states that it will meet its liabilities as and when they reach the due date and ready before the company at the annual general meeting.

Fiduciary Duties

Directors have a fiduciary duty to their company in Singapore and they must be loyal to the company and should act in its best interest, and not have any conflict in loyalty. He or she  should always act in good faith to benefit the company and exercise his or her duties with utmost care and diligence.

Accounting Records

The directors and officers of every company in Singapore are required to keep proper accounting records to sufficiently clarify the transactions and its financial position. The records must contain entries of all receipts, payments, sales and purchases of goods as well as the company’s assets and liabilities. All accounting records must be kept at the company’s registered office or in a place considered fit by the directors for five years as per required by The Companies Act. These records should be accessible easily for inspection by the directors and failing to comply with this section will render the company and the directors guilty of an offence.

Annual Accounts

The directors must prepare profit & loss accounts as well as the balance sheet to provide a clear view of the state of affairs of the company at the end of the financial year. These financial statements have to be presented to the shareholders annually at the AGM (Annual General Meeting). The initial financial statements need to be submitted within 18 months of incorporation at the AGM and not more than 15 months should pass between any two meetings. The financial statements should be made up to the date of not more than 4 months before the date of the meeting in the case of a public listed company and not more than 6 months before the date of the meeting in the case of any other company.

Appointment of Auditors

The directors of every company in Singapore must appoint an auditor within three months of the company’s incorporation.

Director’s Meeting

Adequate notice should be given to the directors and relevant papers should be circulated together with the notice so that the directors are well prepared for the meeting. The directors should ensure that there are regular meetings to review the company’s financial position and the frequency of the meetings depends upon the nature and scale of the company’s operation as stated below :

  • Statutory Meeting: Every public limited company in Singapore with a share capital has to hold a general meeting called “statutory meeting” within no less than one month and no more than three months from the date of commencement of business.
  • Annual General Meeting (AGM): A requirement of holding an annual general meeting with provision to state that the meeting shall be held once annually and not more than fifteen months should pass between the annual general meeting of the preceding year. The first annual general meeting of a company shall be held within a period of eighteen months from the incorporation date.
  • Extraordinary General Meeting (EGM): The extraordinary meeting of the shareholders of a company is known as the Extraordinary General Meeting (EGM) . Any company can convene this meeting at any time depending on the urgency of the matter that requires shareholders’ approval.  The purpose of the meeting is that the company will convene an EGM whenever an important business matter requires shareholders’ approval.

In order for a company to run efficiently, the directors have to comply with all the statutory requirements as outlined by the law and they should be familiar with their duties and responsibilities. Breach of any duties within the jurisdiction may result in penalties, criminal prosecution and civil action against the directors. To ensure proper compliance with these duties, it will be good to engage the services of a reputable corporate service provider that can guide and assist the directors to execute their duties lawfully.

Auditors

In Singapore, all companies or organizations are required to comply with the rules of carrying out audits compulsorily as per the laws. These audits are carried out to ensure that the value presented in the financial statement is true and fair. The Companies Act of Singapore, all business entities are required to hire an auditor if they satisfy the minimum requirements. Carrying out audits in Singapore is compulsory and mandatory if it is not exempt under any form of law in force. A business requires complying with the norms laid down by the Accounting and Corporate Regulatory Authority (ACRA) and to be carried out by regular audits comes under the compliance.

Appointment of Auditors

For every company in Singapore, the directors are required to appoint at least one accounting unit to be the auditor of the company within 3 months of incorporation. Take note that only public accountants or accounting firms approved by the Accounting and Corporate Regulatory Authority (ACRA) can act as company auditor and they will hold office from the time of their appointment until the next annual general meeting (AGM).  If the directors fail to appoint an auditor for the company, any member within the company may apply to ACRA to have it appoint an auditor in its place.

Auditors’ Role

The role of auditors in Singapore is to report on whether the company’s financial statements are complied with financial reporting standards as well as to provide a true and fair view of the company’s financial and trading positions. All auditors in Singapore are entitled to access the accounting records of the company or obtain any information and explanations from the company’s officers when required during the audit.

Exemption from Audit Requirements

Companies that are considered as a “small company” or dormant for a specific financial year are exempted from audit requirements and do not need to appoint auditors for their financial statements.  For more information, please refer to the latest update on ACRA Small Company Concept for Audit Exemption.

It is a known fact that Singapore is a fantastic business hub and the government does its best to make it a business-friendly country. It is extremely favorable for both local and foreign investors, especially the attractive tax regime in Singapore that serves to be a good pull for business people to come to this country. Having that said, auditing services in Singapore are important for new businesses and foreign entrepreneurs who are not too familiar with the tax legislations in Singapore .  Please feel free to contact us if you have any enquiry on Singapore corporate tax or the audit exemption for small companies.

 

 

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If you have all of your documentation ready, the process of setting up a company in Singapore can be done in a day, but if you’re missing specific paperwork, it could take considerably longer. The process of familiarizing yourself with the entire operation, especially if you are starting from scratch, can be long and arduous. At APacTrust, we  make it simple to get you started on a successful company formation in no time. Our committed team of professionals and specialists can assist you with the incorporation process quickly.

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