Singapore has consistently ranked as one of the easiest places to do business globally, thanks to its strategic location, favorable tax regime, and efficient legal framework. Whether you are a budding entrepreneur or a seasoned business professional looking to expand into Asia, incorporating a company in Singapore can be a game-changer.

At Fairgood Advisors, we understand that setting up a business in a new country can feel daunting. This guide will walk you through every step of the process and explore the different types of business entities you can establish in Singapore. By the end of this article, you’ll have a clear roadmap to start your business and operate successfully in one of the world’s most vibrant economies.


Advantages of Registering a Company in Singapore

Before diving into the specifics of the registration process, let’s explore why Singapore has become such a magnet for businesses globally:

  1. Pro-Business Environment: Singapore consistently ranks at the top of the World Bank’s “Ease of Doing Business” index. The government is supportive of entrepreneurship, providing an ecosystem where businesses can thrive.
  2. Strategic Location: Positioned at the heart of Asia, Singapore offers excellent connectivity to major economies such as China, India, and Southeast Asia, making it a hub for international trade and logistics.
  3. Favorable Tax Structure: Singapore offers one of the lowest corporate tax rates in the world. The government also provides tax exemptions and rebates for new businesses to encourage growth.
  4. Robust Legal System: Singapore’s legal system is renowned for its transparency and enforcement of contracts, giving investors and business owners peace of mind.
  5. Highly Skilled Workforce: The city-state boasts a highly educated workforce, particularly in sectors like finance, technology, and healthcare.

With these benefits in mind, let’s now look at the practical steps you need to follow to register a company in Singapore.


Step-by-Step Guide: How to Register a Company in Singapore

1. Choose the Right Business Structure Selecting the correct type of business structure is a critical first step. Singapore offers several options depending on the scale, nature, and goals of your business. We’ll cover the different types of companies later in the guide, but it’s essential to align your choice with your business objectives.

2. Register Your Company Name with ACRA The Accounting and Corporate Regulatory Authority (ACRA) oversees the registration of all companies in Singapore. Your first task is to ensure that your company name is unique and complies with the guidelines set by ACRA. Certain words, such as “bank,” “education,” or “insurance,” may require additional approval from relevant authorities.

  • Tips for Choosing a Company Name:
    • Ensure it reflects your brand identity.
    • Check for domain name availability if you plan to have an online presence.
    • Avoid names that are similar to existing companies to prevent rejection.

3. Appoint Key Officers Every Singapore-registered company must appoint:

  • At least one resident director: This can be a Singapore citizen, a permanent resident, or someone with a valid work visa such as an Employment Pass or EntrePass.
  • A company secretary: This must be done within six months of incorporation. The secretary should be a resident of Singapore and ensure compliance with corporate governance standards.
  • An auditor: Appointing an auditor is mandatory unless the company is exempt as a “small company” under the law.

4. Prepare the Required Documents For the registration process, you’ll need the following:

  • The company’s constitution (previously known as the Memorandum and Articles of Association).
  • Signed consent to act as a director and company secretary.
  • Identification documents of shareholders and directors.
  • Proof of registered office address.

All documents can be submitted online through ACRA’s BizFile+ portal.

5. Submit Your Application Online After ensuring all documents are in order, the application is submitted to ACRA via BizFile+. The approval process is typically swift, taking only a few hours to a couple of days.

6. Obtain Necessary Licenses Some businesses require specific licenses depending on their industry. For instance, companies in the financial, healthcare, or education sectors may need to apply for additional regulatory approval. The GoBusiness Licensing Portal is an excellent resource for determining the exact licenses required for your business.


Types of Companies in Singapore

Singapore offers several types of business structures, each suited to different needs. Let’s break down the most common ones:

Private Limited Company (Pte Ltd)

The Private Limited Company, or Pte Ltd, is the most popular business structure for both local and foreign entrepreneurs.

  • Separate Legal Entity: The company is legally separate from its shareholders, which means the owners are not personally liable for the company’s debts beyond their investment.
  • Tax Advantages: Pte Ltd companies enjoy attractive tax rates and can take advantage of various government incentives.
  • Scalability: A Pte Ltd structure is ideal for businesses looking to scale up, as it allows for more shareholders and can raise capital through equity funding.
  • Legal Requirements: A Pte Ltd must have at least one shareholder, one director (who must be a Singapore resident), and a company secretary.

Sole Proprietorship

For entrepreneurs who prefer to start small and don’t mind personal liability, a Sole Proprietorship may be a suitable choice.

  • Full Control: As a sole proprietor, you own 100% of the business and make all the decisions.
  • Unlimited Liability: However, this also means you are personally liable for all debts and obligations, which can be a significant risk.
  • Simple Setup: The registration process is straightforward and less expensive, but growth potential is limited.

Partnership

If you plan to run the business with one or more partners, you can choose between different types of partnerships:

  • General Partnership (GP): All partners share unlimited liability for the business.
  • Limited Partnership (LP): This structure allows for both general and limited partners. General partners have unlimited liability, while limited partners are only liable for their investment.
  • Limited Liability Partnership (LLP): This combines the flexibility of a partnership with limited liability for the partners. Each partner is responsible for their own legal and financial obligations but not those of the others.

Branch Office vs. Subsidiary

If you are a foreign company looking to establish a presence in Singapore, you have two primary options:

  • Branch Office: A branch office is considered an extension of the parent company, which means it is not a separate legal entity. The foreign company is responsible for the branch’s debts and liabilities.
  • Subsidiary: A subsidiary, on the other hand, is a separate legal entity. It can be a Private Limited Company in Singapore, and the foreign parent company is only liable up to its investment in the subsidiary.

Representative Office

For businesses that want to explore the Singapore market without fully committing to setting up operations, a Representative Office can be a good option. This is a temporary setup, usually allowed for up to three years, and is used primarily for market research or liaising with local contacts. However, it cannot engage in revenue-generating activities.

Legal and Regulatory Requirements

After choosing the type of company structure and completing the basic steps for company incorporation, it’s essential to ensure that your business complies with Singapore’s legal and regulatory framework. Singapore is known for its strict but transparent regulations, making it a great place to do business if you adhere to the rules.

Appointment of Directors, Secretary, and Auditor

Every company in Singapore must fulfill specific roles with designated personnel:

  1. Directors:
    • At least one director must be a resident of Singapore (a Singapore citizen, permanent resident, or an individual holding an EntrePass, Employment Pass, or Dependent Pass).
    • Directors are responsible for managing the company’s affairs and ensuring that the company complies with statutory requirements.
    • A director must be at least 18 years old and cannot be bankrupt or convicted of any criminal offenses related to dishonesty.
  2. Company Secretary:
    • A company must appoint a secretary within six months of incorporation.
    • The company secretary must be a resident of Singapore and must ensure that the company complies with the necessary filing and reporting obligations under Singapore law.
    • The secretary is also responsible for maintaining statutory registers and preparing minutes of meetings.
  3. Auditor:
    • Appointing an auditor is mandatory unless your company qualifies for the “small company” exemption. To qualify, your company must meet at least two of the following criteria:
      • Total annual revenue is less than SGD 10 million.
      • Total assets are less than SGD 10 million.
      • The company has fewer than 50 employees.

Constitution of the Company

The Constitution of the company (formerly referred to as the Memorandum and Articles of Association) is a crucial document that outlines the company’s rules and regulations, as well as the relationship between the company, its shareholders, and directors. It is filed during the registration process, and any amendments made after incorporation must be approved by shareholders.

The Constitution typically includes:

  • Company name and registration details
  • Shareholders’ rights and obligations
  • Powers of the directors
  • Procedures for holding meetings and voting

Registered Office Address and Compliance

Every Singapore-registered company must have a registered office address in Singapore. This is the official address where all legal documents and communications from the government are sent.

  • The office must be operational during regular business hours.
  • It cannot be a PO Box; it must be a physical location in Singapore.

A proper registered office also ensures your compliance with the Companies Act in Singapore. Failing to maintain an accurate registered office can lead to penalties.

Filing and Reporting Obligations with ACRA

Once your company is registered, ongoing compliance with ACRA (Accounting and Corporate Regulatory Authority) is crucial. Key obligations include:

  • Annual General Meeting (AGM): Every company must hold an AGM annually. The first AGM must be held within 18 months of incorporation.
  • Annual Return: After holding the AGM, companies must file an annual return with ACRA. This must be done within one month of the AGM.
  • Changes to Company Details: Any changes to the company’s information (e.g., registered address, directors, or shareholders) must be reported to ACRA within specific timeframes.

Taxation in Singapore

One of the most significant advantages of incorporating a business in Singapore is its favorable tax regime. The government has structured its tax laws to encourage business growth, investment, and innovation.

Corporate Tax Rates and Tax Incentives

Singapore offers a flat corporate tax rate of 17%, one of the lowest in the world. However, new companies can benefit from various tax exemptions and rebates that make the effective tax rate even lower.

  1. Start-Up Tax Exemption (SUTE):
    • Eligible new start-ups can enjoy full tax exemption on the first SGD 100,000 of chargeable income for the first three consecutive years of assessment.
    • A further 50% exemption is provided on the next SGD 200,000 of chargeable income.
  2. Partial Tax Exemption:
    • Even if your company doesn’t qualify for SUTE, all companies can enjoy a partial tax exemption on the first SGD 200,000 of chargeable income:
      • 75% exemption on the first SGD 10,000.
      • 50% exemption on the next SGD 190,000.

Goods and Services Tax (GST)

If your company’s annual revenue exceeds SGD 1 million, you are required to register for Goods and Services Tax (GST). GST is a consumption tax levied on the supply of goods and services in Singapore. The current GST rate is 8% (set to increase to 9% by 2025).

GST registration can be voluntary even if your revenue is below the threshold, and it may be beneficial if you expect substantial expenses where you can claim back GST input.

Withholding Tax and Foreign Company Taxation

If your Singapore company makes certain payments to non-residents (e.g., royalties, interest, or technical service fees), you may be required to withhold a portion of the payment as withholding tax. The rate depends on the nature of the payment and any applicable tax treaties Singapore has with the foreign recipient’s country.

  • Withholding tax rates for non-residents vary but typically range from 10% to 15% depending on the service or payment.

Foreign companies operating in Singapore should be aware that double taxation agreements (DTAs) between Singapore and other countries may significantly reduce or eliminate the need for withholding tax.


Licenses and Permits

Depending on the type of business you plan to operate, you may need to obtain certain licenses and permits before commencing operations. While some companies can start right after registration, others require industry-specific approvals.

Industry-Specific Licensing

Here are some examples of businesses that require special permits or licenses:

  1. Financial Services: If you are starting a bank, insurance company, or any business dealing with financial services, you will need to apply for a license from the Monetary Authority of Singapore (MAS).
  2. Healthcare: Medical clinics and pharmaceutical companies must obtain approvals from the Ministry of Health (MOH) before they can start operations.
  3. Education: Private schools and institutions require approval from the Committee for Private Education (CPE) to operate in Singapore.

General Licenses

Some general licenses and permits may be needed by most businesses, such as:

  • Employment Passes for hiring foreign talent.
  • Central Provident Fund (CPF) registration for companies employing local staff.
  • Business licenses for retail operations, especially if you are selling goods to the public.

Applying for Licenses Through the GoBusiness Portal

Singapore has streamlined the process of applying for business licenses through the GoBusiness Licensing Portal, which is a one-stop platform where you can check if your business needs specific licenses and permits. The platform also allows for the submission and tracking of applications.


Opening a Corporate Bank Account in Singapore

Once your company is incorporated, opening a corporate bank account is one of the next steps. Singapore is home to many reputable local and international banks, offering a range of services tailored for businesses.

Requirements for Opening a Bank Account

Most banks in Singapore require the following documents:

  • Certificate of incorporation from ACRA.
  • The company’s constitution.
  • Resolution from the board of directors approving the opening of the account.
  • Identification documents of directors, signatories, and beneficial owners.
  • Proof of registered office address.

Top Banks and Their Services

Some of the leading banks for corporate accounts in Singapore include:

  • DBS Bank: Offers a range of corporate accounts tailored for SMEs, with competitive fees and extensive online banking services.
  • OCBC Bank: Known for its excellent customer service and comprehensive suite of business banking products.
  • United Overseas Bank (UOB): A solid option for businesses with international transactions, offering multi-currency accounts and robust global banking services.

For foreign entrepreneurs, it’s important to note that most banks require the directors or authorized signatories to be present in Singapore to open the account. However, some banks allow for remote opening through video conferencing, depending on the situation.


Common Challenges When Setting Up a Company in Singapore

While Singapore’s business environment is friendly, entrepreneurs should be mindful of certain challenges:

  1. Navigating Regulatory Requirements:
    • The regulatory landscape is stringent, and compliance with ACRA, IRAS (Inland Revenue Authority of Singapore), and other authorities can be time-consuming. Missing deadlines or failing to comply can result in fines and penalties.
  2. Understanding Singapore’s Business Culture:
    • Business culture in Singapore is formal and conservative. Building trust is essential, especially in sectors like finance and professional services.
  3. Hiring Talent:
    • Finding the right talent, particularly in specialized sectors such as IT and finance, can be challenging. While the government has opened up employment opportunities for foreign talent through the Employment Pass, the process can still be competitive.

Conclusion

Starting a business in Singapore offers a wealth of opportunities due to the country’s stable economy, supportive government policies, and strategic location in Asia. By carefully following the steps to register and comply with local regulations, you can establish a strong foundation for your business.

At Fairgood Advisors, we specialize in guiding entrepreneurs through the incorporation process, ensuring compliance with Singapore’s legal framework, and providing ongoing business support. Whether you’re a local entrepreneur or a foreign company looking to expand, we can help make the process seamless and straightforward.

Ready to start your business journey in Singapore? Contact Fairgood Advisors today for expert guidance.