No, Singaporean-owned businesses do not have to abide by Singapore’s business laws after expanding abroad, assuming they’ve formed a separate legal entity there.
There are many ways of expanding business abroad. You may set up a new company there, in which you can decide between a branch, subsidiary, related company etc.; or you may use your existing Singapore incorporated company to conduct business abroad through a representative office, or as a foreign company there.
Adherence to Singapore Business Laws After Expansion Abroad
Here are the rules of thumbs:
- Your company follows Company Laws wherever it incorporates.
- In operation and doing business, your company adheres to the business laws in that jurisdiction
- You adhere to local taxation laws in all jurisdictions you operate in.
For example, a Singapore Pte Ltd company expands abroad by setting up a Malaysia Sdn Bhd:
- Singapore Pte Ltd company must comply with Singapore company and business laws. E.g. Compliance to ACRA (Accounting and Corporate Regulatory Authority), Annual General Meeting and Annual Returns requirements.
- Malaysia Sdn Bhd must comply with Malaysia company and business laws. E.g. Compliance to Suruhanjaya Syarikat Malaysia (SSM) Annual Returns requirements.
Another example, a Singapore Pte Ltd company expands abroad by doing business in Malaysia without setting up an official company or separate legal entity:
- The company must also adhere to Malaysia business laws like proper business licensing and understand if there are any withholding tax or double tax implications.
Important Business Laws of Singapore
1. Competition Law
The business laws of Singapore are of utmost importance for all who plan to start a business in the country. One of the most important business laws which exists in Singapore is the Competition Law which bans businesses from participating in activities deemed to be anti-competitive through information specified in Sections 34, 47, and 54.
This law has been in place since 2007. The Competition Commission of Singapore (CCS) enforces and administers it. CCS also assesses instances of potential Competition Law violations and punishes businesses or business owners found to have violated this law.
2. Employment Act
Another important law to be followed by all businesses based in Singapore is the Employment Act of 1968. This employment law is the primary piece of labour legislation existing in Singapore today. It was created in order to raise the standards of employment practices in Singapore as well as to improve the working conditions experienced by employees in the country.
Most, but not all, workers who are based in Singapore are protected by the Employment Act. Those to whom the Employment Act does not apply must determine the rights to which they are entitled by engaging in a discussion with their respective employers.
3. Electronic Transactions Act
All electronic transactions performed by businesses based in Singapore are governed by the Electronic Transactions Act. The Electronic Transactions Act came into force in 1998 and was amended in 2010. Apart from electronic transactions, it also governs various other digital services in Singapore.
Such digital services include electronic contracts, electronic signatures, e-commerce, and maintenance of electronic records. The Electronic Transactions Act ensures that when a business is involved with any of the preceding activities, those activities are conducted in a way which is proper and legal.
Business Expansion via Market Readiness Assistance (MRA) Grant
If you’re a Singapore company with at least 30% of local shareholding, you’re automatically eligible to apply for the MRA grant by Enterprise Singapore. Successful applications will receive up to 70% subsidy on eligible costs, capped at S$100,000.
You can check under our more Business Insights sections or you can contact to us for find out more.
FAQs
A private limited company in Singapore offers limited liability protection, separate legal entity status, scalability for growth, access to government incentives, and ease of attracting investors.
The main business structures in Singapore include sole proprietorship, partnership, private limited company, branch office, subsidiary company, and representative office.
S$5,755, the breakdown is illustrated as below:
|
PACKAGE FOR FOREIGN ENTREPRENEURS OPERATING OVERSEAS |
|
|
COMPANY INCORPORATION WITH 1 YEAR NOMINEE DIRECTOR |
|
|
Company Registration |
S$800 |
|
Acra Registration Fee |
S$315 |
|
Appointment of Company Secretary (for 1 year) |
S$600 |
|
Nominee Director (for 12 months) |
S$3,800 onwards |
|
Registered Office Address (for 1 year) |
S$240 |
|
TOTAL |
S$5,755 |
Singapore’s corporate tax rate has fallen dramatically over the past two decades. After peaking at 26%, the Singaporean government enacted many reductions to the corporate tax rate in the ensuing years. Today, Singapore’s corporate tax rates stands at just 17%.
Due to the unique characteristics of sole proprietorships and partnerships, IRAS does not consider them to be companies. Therefore, they are ineligible to receive any tax exemptions.
Ordinary business partnerships, limited partnerships, and limited liability partnerships differ in fundamental ways. The methods in which they are to be run contain significant differences. Therefore, these partnerships have to be classified separately.
Once re-domiciliation is completed in Singapore, it can no longer be undone. The Companies Act does not provide for re-domiciliation back to the original place of incorporation.
No, you can use a different name for your subsidiary company.
Many companies in Singapore require additional business licenses before they may begin business operations. However, this is not necessarily true of every company in Singapore. This is because the licenses required, if any, differ from industry to industry.
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