How Can Foreigners Set Up A Company In Singapore?

One of the more common questions we usually get is “How to register a company in Singapore as a foreigner?”. If you’re asking the same, this article is for you. For starters, you’ll need to know that foreigners can register a company and own 100% of its shareholding.

1. You will need to engage a registered filing agent (such as a law firm, accounting firm or corporate secretarial firm) to submit the application in BizFile+ on your behalf.
2. One of the directors/ authorised representatives/ general partners/managers must be a local resident.

Agents usually provide services, such as:

• Registration of company;
• Provision of Company Secretary;
• Provision of local nominee director;
• Filing Annual Returns with ACRA;
• Maintaining and updating of information with ACRA; etc.

Foreign entrepreneurs or existing Dependant Pass (DP) holders who wish to start a business in Singapore will need to consider:

• Setting up a company with an Employment Pass (EP) or
• Applying for an Entrepreneur Pass (EntrePass)

Firstly, Singapore’s law allows local corporations to be completely foreign-owned. Parent companies that form Singapore-based subsidiary companies can easily enjoy all the benefits of Singapore incorporation.

Secondly, Singapore has an attractive tax regime. Local companies can take advantage of exemptions and tax breaks to pay a far lower effective rate than 17% (which is Singapore’s flat rate).

Thirdly, Singapore has enjoyed consistent social and political stability as a world class business hub. On a political stability scale from -2.5 to 2.5, Singapore is rated at an average of 1.24.

We’ll focus on the whys here and leave the elaboration in our article comparing different types on company structure.

First, let’s establish that a private company limited by shares is the way to go. If this is your first business, you can get straight to registering the company.

A quick overview on the requirements to set up a company in Singapore as a foreigner:

• At least one local resident director who is a Singapore citizen, a Singapore permanent resident, or an EntrePass/Employment Pass/ Dependent’s Pass’s holder with LOC.
• At least one Shareholder
• S$1 paid-up capital
• A physical local address
• A company secretary

After you register a company in Singapore as a foreigner, you will need to get the right visa to live in Singapore and run your business.

There will always be a debate over an EP or EntrePass for foreign business owners. We are advocates of the Employment Pass. Why?

1. Higher application success rate
A qualified individual for EP should have a tertiary or degree certification and a minimum monthly salary of S$4,500. This will be increased in September 2022 to S$5,000.

An EntrePass candidate is intended for serial entrepreneurs, high-calibre innovators or experienced investors whose business in Singapore that is venture-backed or owns innovative technologies. In comparison, the EntrePass is daunting.

2. EP is family friendly
If you’re bringing spouse or kids in, they can apply for dependent passes attached to your EP. The qualifying salary for the EP holder is S$6,000. However, if you’re on an EntrePass, you need a total annual business spending of S$100,000 and meet local employment requirements.

3. No specific requirement for renewal
The renewal of an EP is subjective by nature. The Ministry of Manpower (MOM) looks at the company’s need for the EP holder and their capabilities of engaging him/her for another period.

The EntrePass is has a progressive renewal criteria framework. By the 2nd year, you should plan to hire at least 3 full-time employees (FTE) or 1 local professional, manager or executive (PME). Your total annual business spending by then must be at least S$100,000.

The other new pass is the Tech.Pass. A new work pass initiated in 2021, the Tech Pass is available for top-notch foreign professionals and experts who are keen to launch businesses, head corporate teams, or become a lecturer in Singapore. Example: Top-notch e-commerce, AI, and cybersecurity foreign professionals and experts. While promising, it is still a new area and lacks case studies.

Paul Hype Page & Co. has 14 years of expertise in applying for EPs, we’ve accumulated a high success rate of 93%. Heavily attributed to our insights close working relations with clients. If your EP is important to you, call us for some planning.

1. Work Pass

A foreigner needs an appropriate work pass or visa before legally setting up a company in Singapore.

2. Company Name

The company name must meet a few basic requirements to receive quick approval during application. It must not contain vulgar or misleading words, and it cannot be linked to any national symbols or government organizations. It also cannot be similar to any existing corporate entities.

3. Director

There must be a minimum of 1 locally residing individual acting as a company director. Besides this. There are no limits on the number of local or foreign directors who can be appointed as long as the following conditions are met:

4. Shareholders

At least one shareholder is needed. This person can be a corporate entity, a resident, or a non-resident individual. 100% foreign ownership is allowed in Singapore and a company can have up to 50 shareholders.

5. Corporate Secretary

A qualified company secretary must be appointed within 6 months after the company is incorporated. This person needs to be a naturalized resident.

6. Paid-up Capital

A paid-up capital of at least SGD $1 is required when setting up a new private limited company. However, it is encouraged that a foreigner applying for an Employment Pass offer at least SGD $100,000 in paid-up capital. Not only does this make a strong first impression on any potential clients, but it is also a requirement for businesses working on government projects.

After you register a company in Singapore as a foreigner, you will need a corporate bank account next. Not long ago, back in 2018, bank account openings used to be form-filling task and some administrative efforts. Now, there is strict enforcement of anti-money laundering (AML) frameworks and common reporting standards (CRS).

Some realistic problems you might face include:

1. Grants don’t apply to you

Local government grants generally have a requirement for 30% local shares in a company – one such example is the Market Readiness Assistance (MRA) grant that supports Singaporean companies in expanding overseas.

2. Other forms of financing are also difficult

Without an operational history, bank loans are difficult to get. If you’re founding a startup, the competition to obtain investments by venture capitalists are even more demanding.

3. Work visa renewal

Getting financing is difficult, but if your company is left dormant without revenue, it’s difficult to justify the need for you to stay in Singapore.

Most of the times, directors are not in Singapore to open their accounts. While most banks support remote account openings now, the trouble is in It results in banks wanting to see tax substance in a company.

Doing business in Singapore is generally easy, most general consulting and service businesses don’t need a license. However, watch out for anything that might relate to specific industries like F&B, construction, finance, education, and more.

Co-working spaces are the trend now. Most of them concentrated in the city area. We do have co-working spaces for rent – reach out to us if you ever need a working space.

While hiring, act according to the Fair Consideration Framework of MOM which encourages local hiring before hiring foreigners.

It’s relatively easy in Singapore to maintain your company. If your company doesn’t have specific taxes like goods and services tax (GST) or withholding tax (WHT), your compliance can be done just once a year. Make sure to consult with your accountants or company secretaries for this.

A very easily overlooked matter among the craze of setting up your business in Singapore as a foreigner. Some of the questions that you may have:

We have a whole category of articles to address these issues. Click here to read more about the expat life in Singapore.

All things considered, if you’re looking to register your company in Singapore as a foreigner, having a local service provider heavily involved and supporting your operations would be a definite advantage.

For 14 years, Paul Hype Page & Co. has been coming up with creative solutions for our client’s EP applications, bank account opening and financing.