How to Incorporate a Company in Singapore - Guide for Entrepreneurs
Are you ready to incorporate a company in Singapore? What comes to mind when you think of establishing a company in Singapore? Are you a Singapore local resident running your firm? Or are you a foreigner thinking of incorporating your own company in Singapore?
Singapore is one of the world's leading commerce and trade centers, with plenty of opportunities and possibilities. This means more competition for all the companies here. So, how will you establish and grow your business in such a competitive market? This article will then assist you in making proper plans when contemplating how to incorporate a company in Singapore.
Having a Business Idea
Planning is vital when doing business in Singapore. As such, you need to have a well-defined business plan before you embark on incorporating your very own company. A decent plan lays the foundation for future business. Below are some benefits that an organised plan provides:
- Reduce your risk.
- Uncover your business's potential.
- Determine your financial needs.
- Manage your business better.
- Understand your market and set a marketing strategy.
As a result, the first step to incorporating your company in Singapore is to have a clear business idea. Suppose it's your first time starting a business. In that case, you will have to research to see whether your idea is viable and in the right direction for your business.
Understand Your Paid-Up Capital
It would be best to choose your company's share capital before incorporating it in Singapore. Your company's constitution must include information about the share capital of your firm which consists of the issuance of shares and the various classes of shares.
According to law, all Singaporean businesses must keep share capital on hand. Share capital, especially paid-up capital, is essential for startups during the early stages of operation. By doing this, you will make sure your business can survive those crucial first few months. Paid-up capital is a measure of a company's financial health and liquidity in addition to its initial source of funds. Any unused paid-up capital may become the property of creditors in the sad event that a firm fails, and it indicates funds that are not owing, such as a loan.
You can incorporate your company in Singapore with just a S$ 1 minimum paid-up capital. Singapore accepts any form of legal currency as paid-up capital. There isn't a set minimum paid-up capital requirement if you apply for an Employment Pass (EP) and Entrepreneur Pass (EntrePass). Still, mentioning a reasonable sum to support your case is a good idea that can increase your company's credibility. We encourage you to have a higher paid-up capital, such as S$ 50,000.
What Must You Know Before Incorporating Your Company in Singapore?
Before incorporating a company in Singapore, you must be aware of the following requirements:
- Before registering, your company name needs to be approved.
- Must appoint at least one resident director. Might appoint additional resident or non-resident directors indefinitely. Both resident and non-resident directors must be at least 18 years old, in good financial standing, and have never been accused of malpractice.
- You may have 1 to 50 shareholders, who may or may not also serve as directors. Both local and foreign individuals or businesses are allowed to possess 100% of the shares held by shareholders. Shares in a Singapore business can be freely issued or transferred at any time after incorporation.
- Within six months of your Singapore company's registration, you must appoint a qualified resident as company secretary. The company secretary cannot be a sole shareholder or a director.
- To form a Singapore business, you must have a minimum of S$1 in paid-up capital, sometimes called share capital. After incorporating your company, you can always increase this sum.
- The registration address of the corporation must be a local, physical address in Singapore. Residential or business addresses are acceptable for the registered address, but a P.O. Box is not.
- Registered companies are eligible for enticing tax exemptions and incentives. Your business pays less than 9% of the first S$300,000 in profits you generate each year, with a fixed rate of 17% applied after that. Companies based in Singapore are exempt from capital gains and dividend taxes.
What Documents Required to Incorporate a Company in Singapore?
Understanding the various business entities before starting a business in Singapore is also important. After you have decided on your business entity, you must submit the following documentation, per ACRA requested:
- Business name
- A brief explanation of the company activities
- Shareholders' particulars
- Directors' information
- Official address
- Company secretary information
- Constitution of the company
- Company's proposed financial year-end
If you are hiring third-party service providers like Sprout, you may need to provide the following documents:
- Non-residents: a copy of your passport, your overseas residential address, and any further supporting documents need.
- Citizens of Singapore: a copy of your identity card from Singapore
- Shareholders of corporate entities: a copy of the registration documents.
- Any documents not in English shall be accompanied by translations duly certified.
How Long Does it Take to Incorporate a Company in Singapore?
Step 1: Approval of the Company Name
New company names are frequently approved or disapproved in less than an hour. The proposed name contains words (such as bank, finance, law, media, etc.) that may need to be evaluated and approved by a relevant government entity. In that case, it might occasionally cause a delay to the approval procedure by a few days or weeks. In general, to get approval for your proposed company name, make sure that your business name complies with these:
- Your business name cannot be obscene
- The name of your business cannot violate existing trademarks.
- Your business name cannot be the same as another Singaporean firm that already exists.
- No other business already reserved your company's name.
Assuming you comply with that simple criteria, The Accounting and Corporate Regulatory Authority (ACRA) can authorise your business name in less than an hour. If your business is in a field that requires a license, such as law, medicine, or finance, it may take a few weeks for the name to be approved. Following approval, ACRA will keep your company name for 120 days. But if you let it expire, someone else might be able to use it.
Step 2: Company Registration
If the name is already approved and the required paperwork is signed correctly. In that case, you can complete your business registration within a few hours of submitting the incorporation request. In very unusual circumstances, authorities may ask shareholders or directors of particular nationalities for additional information.
Your company registration service provider must also perform "Know Your Customer" due diligence on your business under anti-money laundering rules (KYC). It should be straightforward because your chosen Singapore company incorporation provider will guide you through the registration documents. The completion and approval of these registration documents must occur within one day.
Will I Know When My Company is Incorporated?
The Accounting and Corporate Regulatory Authority (ACRA) will validate your Singapore company's registration by sending an official email notification. In Singapore, the email notice serves as the official certificate of incorporation and contains the company registration number.
The certification of incorporation is no longer automatically issued in physical copy. However, if you require one, you can submit a request online to ACRA for S$50 per copy following registration. The ACRA office will have hard copies of the certificates of incorporation available the following day. By submitting a request online and paying a small application fee, you can get a PDF copy of your company's business profile and certificate of incorporation. Within an hour of the request, the business profile of the company is often accessible for download and includes the following significant information:
- Name of the business and its registration number
- Previous names of the business, if any
- Date of incorporation
- Business activities
- Paid-up capital
- Registered office address
- shareholders' information
- Directors' information
- Company secretary information
If you're contemplating how to incorporate a company in Singapore, you should consider the above information to manage it efficiently and effectively. It is also an excellent way to gain a competitive edge over your competitors. You can also take advantage of the innovative business environment in Singapore, which offers you various benefits, such as tax exemptions for foreign investors and government grants for business startups. With all this information, we hope it will help you make the right decision to incorporate your company.
Sprout with Us
Contact Sprout Asia today if you need to incorporate your company in Singapore. We will gladly guide you through the whole process. In addition, we can assist you in taking care of your accounting and other administrative tasks. Visit our website today to learn more!