A Guide To Starting, Maintaining & Expanding A Business in Singapore

Starting a business can be a life-changing experience. There might be many reasons for wanting to start your own business, like capitalising on an opportunity, fulfilling a need in your community or just wanting to escape the daily 9-to-5 labour. It is also a leap of faith that requires pushing yourself out of your comfort zone and trying out something new.  

Starting from scratch is hard work and certain risks are involved, but the potential for success and rewards could be significant. You get to climb your own ladder, set a pace that suits you best, and make your mark on the world. If you have a bright idea or a burning interest, here are some good reasons why you should start your business today. 

You will be motivated every day in the office – When you are working for someone else, it can be quite difficult to find the motivation to do your best because no matter how hard you work, ultimately, the owners of the company reap the benefits. Being your own boss means putting your dreams first and taking control of your own success. The day-to-day vitality of your business depends on you, so you’ll be motivated to make each day as productive as you can. 

You’ll be following your passions – Most entrepreneurs start their own businesses to follow their dreams and fulfil their passions. With your own company, creating your brand from the ground up becomes your responsibility, allowing you to shape it into something you can be proud of. You might even be able to pass it on to the next generation as a continuation of your legacy. 

You can achieve financial independence – Most people want to start a business with the dream of achieving financial independence. Although the beginning processes might be a little rocky, the ultimate goal of being your own boss cultivates your own financial comfort. With determination and hard work, your business will prosper and thrive. 

You’ll have true job security – The stress of climbing the corporate ladder is competitive and real. You will never know if you will be promoted or handed a termination letter as these life-changing decisions are in someone else’s hands and beyond your control. With your own company, you know you are investing in yourself, the future and your own job security. You decide your own destiny!

Now with a better understanding of the benefits of being your own boss, you need to know how to start and maintain a business. One of the best places to start your business is definitely in Singapore. Compared to other countries that are considered business hubs, Singapore offers one of the easiest and quickest processes to register your business, attracting investors from all over the world. Its high GDP per capita of 61,000 USD is an added advantage for businesses to set up operations in the city-state.

Here is a guide that contains key facts on everything you need to know about Singapore company incorporation. 

Requirements to Register a Company in Singapore

Before starting a business in Singapore, you need to:

1. Select your preferred business structure (Private Limited Company, Sole Proprietorship, Partnership)
2. Register your company with the Singapore Company Regulator (ACRA)
3. Open your corporate bank account

Note: ACRA refers to The Accounting and Corporate Regulatory Authority, a statutory board under the Ministry of Finance. They are the national regulator of business entities, public accountants, and corporate service providers in Singapore.

To begin your business registration in Singapore with ACRA, you will need:

1. A company name – Every business needs a company name as special as the business itself. It must not be used by others and have to be unique. Your company’s legal name and trading name can be different but do ensure that the trading name doesn’t cause a trademark issue. 
2. Shareholders – All businesses in Singapore need at least one shareholder (with a maximum of 50) and there is no limitation on who can be one. In fact, the law here even allows for complete foreign ownership of Singaporean businesses. 
3. Directors – All Singaporean businesses require at least one local director. This individual can be a citizen, a PR or an Employment Pass (EP) holder. You can also appoint a Nominee Director who will have no say and is only hired to meet the requirements. 
4. Corporate secretary – It is compulsory for every company to have a secretary. This individual will track changes in your company, prepare and fill all the necessary documentation and keep the company compliant to regulations. 
5. Paid-up capital – The minimum paid-up capital for a company to register in Singapore is S$1 or equivalent in any currency. Any time post-business registration, the share capital can be increased.
6. Registered address – Every Singaporean company must have a registered address. This can’t be a PO box. It needs to be an actual physical address.

Types of Companies/Business Structures in Singapore

Before you register your company with ACRA, you will have to decide the type of business structure you would like to follow. 

1. Private Limited Companies (Pte Ltd)

A private limited company is the most common type of business in Singapore and can be characterised by

• Having less than 50 shareholders
• Not having their shares shared with the public. 

Shareholders from a Pte Ltd can be from other companies, individuals or a mixture of both. This structure limits your liability, makes it easier to raise finance and gives your business credibility.

2. Sole Proprietorship (SP)

This business structure is riskier as the owner will be personally liable for the company. As the owners trade under their own name, they do not need to register, and tax is simpler. But liability is unlimited, i.e. the person and the company are not separate. Only Singapore citizens, Singapore permanent residents or EntrePass holders are allowed to register a sole­ proprietorship business. 

3. Limited Liability Partnership (LLP)

In a limited partnership in Singapore, at least one partner is a general partner with unlimited liability, but one or more partners are ‘limited partners’, with limited liability. Singapore also allows limited liability partnerships (LLPs), where all partners have limited liability.

Required Documents to Register a Business in Singapore

To start your business registration in Singapore, you will need to provide these documents to file with ACRA Singapore. 

• Company name
• Brief description of activities & SSIC Code
• Shareholders’ details and KY information
• Directors’ details and KYC information
• Registered Singaporean business address
• Share capital details
• The company’s constitution

Steps to Register a Company in Singapore

Once you’ve submitted your documents, your Singapore company incorporation will be completed within 1 to 3 working days, as long as there are no delays and documentation problems. But before submitting these documents, there are 2 important steps you have to follow to register your company in Singapore. 

1. Reserving the company name

The name that you proposed for your company should be approved or rejected by ACRA within a day. However, if the name that you suggested contains specific words like media, bank, law, finance or education, the relevant external governmental authorities may be required to review and approve the name. 

To increase the chances of the proposed name being approved immediately, do ensure it is not:

• Similar to any existing company in Singapore
• Vulgar or obscene
• Already reserved

Approved company names will be reserved for 60 days from the date of your application. If you wish to extend it for another 60 days, you can do so by filing for an extension just before the initial date expires. 

2. Registering the company

Once your company’s name is approved, the next process is filing the paperwork and obtaining approval from ACRA which can be done in one day. Do ensure that all your documents are ready and have been signed by all the directors of your new company. 

At Paul Hype Page, all Singapore company incorporation documents are prepared and signed digitally via our patented platform to reduce the hassle of physical paperwork.This means that you don’t have to be physically present in Singapore to register the company. 

Post-Incorporation of a Company in Singapore

Once the business registration process of your company is completed, here are some things that would happen post-incorporation. 

• You will receive a Certificate of Incorporation via email notification from ACRA confirming the registration of your company. This will be your official Singapore Company Incorporation Certificate which will include your business registration number. 
• You will receive a Business Profile (Bizfile) from ACRA which is free of charge. The business profile will act as an identification card for your new company. 
• You will be able to open a corporate bank account with any bank in Singapore. 
• You will have to complete your Business Licences Application based on the activities your business would be performing and handling. You should complete this process after registering your company and before starting your business. 
• You will have to register for Goods & Service Tax (GST or value-added tax or VAT in other countries) if you expect the annual turnover for your business to exceed S$1 million. If you think your annual turnover will be lower than this amount, you will not be required to register for GST. 
• You will need to hire a Corporate Secretary or appoint a professional company secretary services in Singapore within 6 months after incorporation. The secretary should be a Singapore citizen, permanent resident or Singapore Employment Pass/ EntrePass/ Dependant Pass holder. This individual must also possess at least one of the following qualities
  • At least 3 of the 5 years of secretarial experience immediately before appointment as secretary
  • Qualified person under the Legal Profession Act, Cap. 161
  • Public accountant registered under the Accountants Act, Cap. 2
  • Member of the Institute of Certified Public Accountants of Singapore
  • Member of the Singapore Association of the Institute of Chartered Secretaries and Administrators
  • Member of the Association of International Accountants (Singapore Branch)
  • Member of the Institute of Company Accountants, Singapore

Singapore Company Registration for Foreign Business Owners

Foreigners who are interested in establishing their company in Singapore would also need to consider these factors:

• You will need to hire local help to set up your company – The Singapore government does not allow any foreign individuals to self-register their company so you would need to hire a professional to incorporate your business on your behalf. 
• You do not need to travel or apply for a visa to register your company – If you plan to open your business in Singapore without relocating, applying for specific travel visas is not required. You can visit your company in Singapore on a visitor visa whenever the need arises. 
• You will need to hire a local nominee director – According to ACRA, hiring a local director is a must if you wish to register your company in Singapore. You can get help from professional service firms that offer incorporation services including resident directorship. 
• You may need to travel to set up a corporate bank account – Depending on the bank that you choose, some banks require the physical attendance of directors and/or shareholders to approve the bank account in Singapore. 
• You can apply for an EP under your new company – If you wish to work and stay in Singapore, you can apply for an Employment Pass under your newly registered company for yourself and your foreign employees. 

Hiring Talents in Singapore

After setting up a company in Singapore, hiring employees is the next most important step you should take that involves some important decision-making. The hiring process should adhere to legal protocols set by the Ministry of Manpower (MOM). 

Here are some requirements to hire local employees. 

Apply for a CPF Submission Number (CSN) 

Your CSN is a unique identifier used by employers to transact with the CPF Board. This includes making CPF payments and requests relating to employment matters. The CSN is made out of Unique Entity Number (UEN) or NRIC/FIN (if you are trading under your own name) and CPF Payment Code. 

The CPF Payment Code in your CSN identifies the different types of payments that should be made by employers to the Board such as CPF contributions, Voluntary Contributions, and MediSave Contributions under the Additional MediSave Contribution Scheme. 

Write Up an Employment Contract

The employment contract defines the employer-employee relationship, including the terms and conditions of employment. The contract must include key employment terms (KETs) and essential clauses like hours of work and job scope. 

Employers must issue KETs in writing to all employees who meet all the following conditions:

• Enter into a contract of service on or after 1 April 2016.
• Are covered by the Employment Act.
• Are employed for 14 days or more. This refers to the length of the contract, not the number of days of work.

Items that should be included in the KETs are:

• Full name of employer and employee
• Job title, main duties and responsibilities
• Start date of employment
• Duration of employment
• Working arrangements such as working hours, number of working days per week and rest day
• Salary period and basic salary
• Fixed allowances and deductions
• Overtime payment period and rate of pay
• Other salary-related components such as bonuses and incentives
• Types of leaves
• Other medical benefits
• Probation and notice period
• Place of work

Get Relevant Compensation Insurance 

As an employer, you are required to purchase work injury compensation insurance for:

• All employees doing manual work, regardless of salary level.
• All employees doing non-manual work, earning a salary of S$2,600 or less a month, excluding any overtime payment, bonus payment, annual wage supplement, productivity incentive payment and any allowance.

Statutory Filings Per Employee

Every employer must adhere to the relevant mandatory statutory contributions requirements for each employee, subject to certain qualifying criteria. This includes:

• Central Provident Fund (CPF) – An employer is required to make CPF contributions at monthly rates based on the employee’s annual salary as stated in the CPF Act. They can then recover the employee’s share of the contribution by deducting it from their salary. 
• Skill Development Levy (SDL) – Employers are required to make SDL contributions for all employees.This fund is used in supporting workforce upgrading programmes and provides training grants. The SDL must be paid by the employer and cannot be deducted from the employee’s salary. 

Hiring Foreign Employees in Singapore

Most companies in Singapore hire foreign talents to diversify and supplement their local workforce. Some hire foreigners to fill in the gap in certain industries like IT, Business and Finance and R&D companies that face a shortage of highly skilled local talent. Similarly, certain laborious jobs such as construction work and domestic help are not preferred by locals, leaving no option but to hire foreign employees. 

According to the Employment Act by the Ministry of Manpower, a foreigner working in Singapore must have a valid Singapore work visa. So, if you wish to hire a foreigner, you will have to apply for a specific work pass on their behalf but do take note that some work passes have certain limitations and quotas. 

The foreign talents in Singapore can be categorised into three main groups:

• Skilled professionals (software engineers, doctors, consultants, etc) who are issued an Employment Pass. 
• Semi-skilled professionals (technicians, chefs, administrative professionals, etc) who are issued the S Pass.
• Unskilled professionals (construction workers, domestic help, etc) who are issued a work permit. 

Requirements to Hire Foreign Employees

To hire a foreign employee, you will need to:

• Set up a work pass account – Depending on the type of work visa your employee will need, you can apply for them on the Work Pass Account Registration (WPAR) portal.
• Take note of all the rules on hiring foreign employees – Including Dependency Ceiling Ratio, Foreign Worker Levy and Fair Consideration Framework 
• File for Taxes – IR8A, Appendix 8A, Appendix 8B and IR8S

Foreign Worker Levy

Companies registered in Singapore are required to pay Foreign Worker Levy (FWL) for their Work Permit and S Pass holders. This levy is introduced to regulate the foreign manpower numbers in the country. 

The total amount of FWL to be paid for each employee is determined by the sector that individual belongs to, their educational qualification and the skills they possess. 

Types of Work Permits for Skilled and Semi-Skilled Professionals

Singapore Employment Pass and S Pass are two separate work passes meant for professionals with high-level qualifications and skills and technicians with mid-level skills respectively. Though both are work passes, there are many differences between these two based on the following criteria

Payroll Management in Singapore

Singapore is one of the few countries in the world without a minimum wage requirement. But, if your business is growing and you need to hire professional talents locally and internationally, here are some factors you would need to know about payroll management in Singapore. 

1. Salary

Salary is the basic remuneration paid to employees for their work done under a contract of employment. It does not include travelling, food or housing allowances as well as pension, expenses incurred during work hours and retrenchment benefits. According to Singapore’s Employment Act, an employee’s salary must be paid at least once a month or at shorter intervals based on the company’s policy and regulations. It has to be paid within 7 days after the end of the salary period and non-payment is a serious offence in Singapore. 

2. Pay Slips

As stated in the Employment Act as of 1 April 2016, all employers must issue an itemised slip that should include details such as the date of payment, basic salary and allowances, overtime pay, salary period and compulsory deductions made. Failure to do so can result in a fine. 

3. Employment Records

Employers are required to keep a detailed employment and salary record of all their employees for 2 years. Records of ex-employees must also be kept for one year after their contract has ended. 

4. Pro-Rated Salary

For employees who are unable to work an incomplete month, they are entitled to the pro-rated portion of their salary for the days they worked. Here’s how the calculation would be done.

Monthly rate of the employee’s salary  X  Days the employee worked in that month

Working days in a month

5. Mandatory Levies, Contributions And Statutory Requirements

Besides Central Provident Fund (CPF) contributions, here are the other mandatory payments employers are required to make. 

• Ethnic Funds such as CDAC, ECF, MBMF and SINDA
• Skill Development Levy
• Foreign Worker Levy

Corporate Income Tax In Singapore

Singapore is one of the top investment destinations for many companies because of its accommodating tax regime. The rate for corporate income tax for both local and foreign companies in Singapore is 17% and the legislation is pretty straightforward. Some companies will also be able to enjoy added incentives in the form of partial exemption from tax on the first S$ 200,000 of taxable income as well as tax rebates that are exclusively available to resident companies in Singapore. 

As Singapore has a single-tier tax system, which means once the company is taxed, the distributions to shareholders in the form of dividends are free from tax. Any dividends paid offshore are not subject to withholding tax. 

If a company incurs a tax loss in any particular year, that tax loss can be carried forward and be offset against any future chargeable income made by the company. There is no limit on the number of years that the damage can be carried forward. 

Company Audits and Annual Business Reporting

All Singapore companies are required to follow certain legal requirements every year regardless of their size or business structure. Here, we explain the annual filing requirements you need to fulfil to comply with the Company law in Singapore. 

Annual Filing Requirements

To stay in compliance with the law, your new company must file yearly as required by these two government bodies:

• ACRA – The Accounting and Corporate Regulatory Authority that works as the national regulator of business entities in Singapore
• IRAS – The Inland Revenue Authority of Singapore that is in charge of collecting taxes and specifies the annual filing requirements. 

Annual Return Filing

The Annual Return must be filled by every company with ACRA to refresh their information and keep it current. The return contains these information:

1. Company Name and Registration Number
2. Principal activities
3. Registered Office Address
4. Details of company officers (directors, secretary)
5. Shareholder details, share capital, etc.

It must be signed either by the director of the company or an appointed company secretary. Keep in mind these key points when filing your annual return. 

• A company must attach its audited financial statements when it submits an Annual Return with ACRA.
• The deadline for filing the Annual Return is 30 days from the date of the Annual General Meeting (AGM). In certain cases, a company can file its Annual Return without conducting its AGM.

Company’s Audit Requirements

Company audits are important as it ensures the business’s financial statements are true and fair. As mandated by Singapore’s Companies Act, company audits can only be conducted by a registered accounting professional who observes the SSA (Singapore Standards on Auditing). Like all countries worldwide, private companies’ financial statements undergo a legal audit annually unless exempted due to the company meeting specific criteria.

Appointment of Auditors

The directors of your company are required to assign an auditor within 3 months of incorporating your company in Singapore and only public accountants or accounting firms can act as company auditors. You can also hire professional audit services to audit your company. 

Auditors will hold office from the time of their appointment until the conclusion of the company’s next annual general meeting (AGM) where the company will appoint a new accounting officer or reappoint the same officer to act as an auditor. 

Role of Auditors

An auditor’s role is to inspect and report whether the company’s financial statements:

• Comply with the financial reporting requirements.
• Provide a fair view of the company’s financial position and performance. 

An auditor can legally access the company’s accounting records or obtain any information and explanation as required by the auditing requirements. 

Auditor Remuneration

During the AGM, your company is required to disclose auditor remuneration only if a request for details of all payments paid to or received by the auditor is made by 

• At least 5% of the total number of member in the company
• Shareholders who hold at least 5% of the total number of issued company shares. 

Companies Exempted From Audit

Companies that are classified as ‘small company’ for a particular financial year or ‘dormant’ are exempted from audit requirements and do not need to appoint an auditor to have their financial statements audited for that financial year. 

Small Company

A company is considered a ‘small company’ if it is a private company throughout the particular financial year and fulfils any of these 2 requirements:

• The company’s annual revenue does not exceed $10 million
• The value of the company’s total assets does not exceed $10 million
• The company does not have more than 50 employees.

Small Companies that are Part of Groups

Small companies that are part of groups (as part of a parent company or a subsidiary) will only be exempted from audits if they are part of a ‘small group’. To be considered a small group, the company has to satisfy any of the 2 following requirements for 2 financial years consecutively.

• The group’s consolidated revenue does not exceed $10 million
• The value of the group’s consolidated total assets does not exceed $10 million
• The group does not have more than 50 employees.

Dormant Company

A company will only be exempted from audits if:

• It has been dormant from the time of its formation; or
• It has been dormant since the end of the previous financial year.

Even if a company is exempt from audit requirements, the company may still be required to lodge its audited financial statements and report if the company has breached laws relating to the:

• Keeping of accounting records
• Laying of their financial statements at their Annual General Meeting

Once your business starts to profit and grow, it is time to expand globally and here’s how to do it!

Market Readiness Assistance (MRA) Grant

The Singaporean government encourages local companies to grow their business over the borders by launching the Market Readiness Assistance (MRA) grant. A government agency, International Enterprise Singapore (IE Singapore) was set up to help incorporated companies in Singapore establish a global presence. This grant provides funding for companies who wish to internationalise and grow!

The main purpose of the MRA grant is to help local Singaporean companies with their expansion budget when they enter a new foreign market. The grant provides government funds to companies that incur costs on qualifying activities like market entry, marketing expenses, and overseas business development expenses when they venture overseas. The total available support for the grant is 70% of total eligible costs per new market, capped at S$100,000.

MRA Grant Requirements

To be eligible for this grant, your company should fulfil the following criteria:

• The company must have its global headquarters in Singapore and
• The annual turnover of the company must be less than S$100 million annually (according to the latest audit report for the company)
• At least 30% of local shareholding 
• Total sales for the target market you choose to enter cannot exceed more than S$100,000 in each of the last 3 preceding years

Qualifying Activities to Claim the MRA Grant

Here are the activities that a business can use to claim the MRA grant. 

Overseas Market Set-Up which includes:

• Market assessment (market research, market feasibility, legal and tax advisory, etc)
• Market entry (name search, Intellectual Property (IP) search, import-export licences, etc)

Overseas business partners that includes:

• Business matching (identifying business partners, joint venture partners, agents and distributors, etc)
• Outsourced business development services

Overseas market promotion which includes:

• Overseas marketing and PR activities (promotions, road shows, trade conferences, etc)
• Participation in overseas trade fairs (space rental, booth design, etc)

How to Apply for the MRA Grant? 

If you want to apply for the MRA grant, here are some steps you should follow. 

1. Request for a cost quotation – request for a quotation from the third-party service provider that you appointed for the qualifying activities. 
2. Apply through the Business Grants Portal – apply for your grant through the Business Grants Portal or engage the services of a professional service provider.
3. Letter of Offer – Wait for the offer letter from IE Singapore
4. Submit the Claim – Once you’ve received your offer letter, do complete the required project within 6 months and send in your claim for disbursement to IE Singapore. 

Expanding into a new market can be daunting and challenging for every business. But with the MRA grant, you don’t have to worry about funding and the extra expenses your business might incur. 

As one of Singapore’s leading MRA grant consultants, we provide end-to-end services covering the scope of the entirety of the grant. From market set-up, and business development services to overseas market promotion, you can reach out to

Frequently Asked Questions

1. Do Singapore companies need to be audited? 

Every registered company in Singapore is required to file their financial statements and have their records officially audited every year, unless they are exempt from audit. 

2. What do I need to do to hire a foreign worker in Singapore? 

Based on their qualifications, you would have to apply for a valid work pass or permit on their behalf before they can work in Singapore. 

3. What is the minimum salary for an Employment Pass in Singapore? 

The minimum salary to apply for an EP in Singapore is at least S$5,000 which increases progressively with age. 

4. How long can an S-Pass holder stay in Singapore? 

The S-Pass is valid for 2 years.

5. Can foreigners set up a company in Singapore? 

A foreigner can open a company in Singapore and get it incorporated only if they hire a local nominee director for the company or apply for an Employment Pass under their newly formed company.

Conclusion

Singapore has been consistently ranked highly with regard to the ease of establishing a business here. Even if you are a foreigner, the requirements to start a business in Singapore are much more straightforward as compared to many other business hubs all over the world. 

So, if you wish to start your own business and are not sure where to begin, we are here to help you ease the process. At Paul Hype Page & Co, we provide complete business solutions, from Singapore incorporation services, Singapore work visa and employment pass to post-incorporation services. Do leverage our expertise for your business solutions from starting your company registration to any other incorporation services. 

Kickstart your business dream today with a call with our consultant and let us handle the rest!