Doing business in Singapore
All local and foreign companies in Singapore – including foreign branch offices – are governed by the Singapore Company Law 2016. The Companies Act was overhauled by the Companies (Amendment) Bill passed in October 2014 and the changes implemented over a two-year period. The latest amendments came into effect on January 2016 and included the following:
- Merging the memorandum and articles of association into a single constitution.
- Extending directors’ disclosure obligations to the chief executive officer (CEO).
- Extending the prohibition against the company providing loans to (or furnishing security for loans to) its directors.
Being one of the world’s easiest place accessible to the labour market, and ever-growing suburban estates, this Republic is rapidly becoming home to premium facilities and modern luxury items.
Whilst a small majority of people might think that the Singaporean Law, be it for a strong pool of locals, foreigners, customers, or corporation might be stringent, many businesses are moving to Singapore to be a global business. Many believe these laws and regulations that will help businesses develop and grow at an extraordinary pace.
Being one of the easiest places to do business (as quoted by the World Bank), Singapore is open to foreigners for any types of business. However, the Broadcasting and News Media industry is restricted for all foreigners’ shareholding limits.
Here is a quick walk through of the basic requirements to have your company registered.
What are the most common forms of business vehicle used in the jurisdiction?
- Private limited company (recommend)
- Partnership (including a limited liability partnership and limited partnership).
- Sole proprietorship.
Registration, formation, and incorporation
With the world moving (or have moved) to a digital era, Singapore is no different. For the ease of everyone, registration is fully computerized and managed by the Accounting and Corporate Regulatory Authority (ACRA). A company can also be registered online using Paul Hype Page & Co’s pending patent iBizFile system.
However, this can only be done with a valid SingPass, which means it is only accessible by:
- Singapore citizen.
- Permanent resident.
- Individual with a SingPass.
Points to be taken is, Singapore regulation requires foreign individuals and their entities to engage the services of registered, and licensed corporate service provider. In this case, it is us, Paul Hype Page & Co.
Your Singapore Company registration involves two prior processes:
- Applying for approval of a proposed name for the company, and
- Filing a request for incorporation.
In accordance with the regulations, types of businesses that will be governed by the local authorities (for example, financial service providers and legal consultants) will need consent from their respective agencies.
Your company can begin doing business as soon as it is registered with ACRA, unless your activities need further business license or approval from other government agencies.
Regulation on Reporting Requirements
All Singapore companies must comply with these rules:
- Decide on their financial year end,
- Appoint an auditor like Paul Hype Page & Co within three months of incorporation (unless exempted),
- Hold their annual general meeting within 18 months of incorporation,
Have their accounts audited.
The Inland Revenue of Singapore (IRAS) role in the incorporation
- A form declaring its revenue and estimated chargeable income with within three months of the end of the financial year.
Annual tax return (with IRAS) by 30 November each year.
Information to be filed with ACRA:
- Annual return within one month of a company’s AGM.
- Statement of particulars within 30 days of creating a charge over your company’s property
- Details of all changes to directors, secretaries, and shareholders
A company can be incorporated with a share capital of S$1, which can be increased any time after incorporation.
Rights/ set of rules attached to shares
The Companies Act 2016 defines a private company as one in which:
- The right to transfer its shares is restricted. A restriction on the transfer of shares (for example, a transfer is subjected to the approval of the directors) will satisfy this requirement
- The number of shareholders does not exceed 50 individuals
Any other set of rules or rights can be set out in the constitution of the company or the relevant shareholders’ agreements. It can also include the right of pre-emption in the event of a proposed share transfer by any one shareholder.
The board of a private company must comprise at least one director who is a natural person ordinarily resident in Singapore. A director must be at least 18 years of age. However, there is no maximum age limit for directors.
If you are incorporating a company and want to be the director, you will need to apply for an Employment Pass beforehand. In the meantime, we can assist you with a nominee director.
All foreigners who intend to work in Singapore must have a valid work permit before they begin.
There are various types of work permits for different salary ranges and qualifications. This can be obtained via the Ministry of Manpower (MOM).
Gains or profits from any employment are subject to income tax in Singapore under the Income Tax Act if the employment is acted in Singapore.
If you fulfill these basic requirements, then starting a business in Singapore might be easier than you think. Unlike other countries, there are respective departments for licensing and specific procedures in Singapore, added to that the strict transparency protocols help ensure that the entire procedure will be as simple as it can be!
If you want a convenient solution to starting your own business in Singapore, be sure to give us a call!
Categories: Singapore Incorporation and Company Registration