Singapore Corporation Setup

Generally, most foreigners choose to setup a Singapore private limited company as it offers several benefits. Some of the common reasons behind the popularity of the Singapore private limited company structure are as follows:

1. Since Singapore allows 100% foreign shareholding of a company, most foreign entrepreneurs find it convenient to set up a Singapore private limited company and own 100% of the shareholding.
2. The Singapore private limited company is separate legal entity that is distinct from its members.
3. The liabilities of the Singapore company do not extend to the its members. In the event of debts or liabilities of the private limited company, members' personal assets remain protected.
4. It is easier for a Singapore company to raise capital as compared to other business structures.
5. Since the business is incorporated as a Singapore private limited company, it qualifies as a local resident entity and can benefit from Singapore's low tax rates and other tax incentives.

You will be happy to know that there are very minimal and basic requirements for registering a Singapore company.

You will require the following documents and information for registering your Singapore corporation:

• The approved name of your Singapore corporation;
• A brief about the proposed business activities that your Singapore corporation will engage in;
• Particulars of the Singapore corporation's directors, shareholders and company secretary (such as name, address, citizenship, etc.);
• The corporation's Memorandum and Articles of Association (MAA);
• Passport copies or Singapore Identity card (IC) copies of proposed shareholders and directors;
• Residential address proof of proposed non-resident shareholders and directors; and
• Details of the parent company if the shareholder is a corporate body.

The documents must be in English or officially endorsed English translated versions.

• Incorporating a Singapore corporation is an easy and quick process involving minimal formalities.
• The Singapore corporation can be registered online with the Companies Registrar simply with the click of a button. Normally, a Singapore corporation can be set up in a day's time.
• There are only two steps involved in registering a Singapore corporation:
  • Securing name approval by filing an online application with the Companies Registrar, and
  • Submitting the incorporation documents once the name is approved.
    • Name approval can be secured within a few hours of filing the application, provided there are no objections to your proposed company name.
    • Company incorporation notification will also be e-mailed to you within a few hours of documents submission, provided the authorities find your application to be complete.
• Note that if you are residing overseas and have appointed a professional services firm, it might take a little longer than a day to incorporate the company, taking into account the time required for you to deliver the necessary documents to the service provider. Occasionally, the Companies Registrar may request for additional information regarding directors or shareholders. In such cases, the company incorporation time-line is likely to take a  few days. At the most, it may take 1-2 weeks to incorporate a Singapore corporation.

Yes. Singapore adopts a liberal foreign ownership policy, permitting 100% of the shareholding of the corporation to be foreign owned. Additionally, there are no restrictions on the fields of business activity foreigners can engage in. What's more, no prior approval is required from the Singapore authorities if a foreigner wishes to do business in Singapore.

Yes. If you do not wish to relocate to Singapore to operate your Singapore corporation you can continue to reside in your current country of residence and visit Singapore as and when required on a Visitor Visa. Note however, that you need to appoint a Singapore resident director for your company. For this requirement you can appoint a nominee director via a professional services firm such as our company.

Yes. Singapore has adopted an open and liberal immigration system, making it easy for foreign entrepreneurs to relocate to Singapore. If you wish to move to Singapore to operate your Singapore LLC, you can do so by applying for either one of the two following Singapore work visa schemes, depending on which scheme you qualify for:

1. Singapore Employment Pass: For business owners and business professionals with a Universtity education, good professional experience and a minimum monthly salary of S$2,500. For details, refer to Singapore Employment Pass.
2. Singapore Entrepreneur Pass: For business owners who possess a good business background but lack the requisite educational qualifications and are unable to qualify for the Employment Pass.  Note that there are other eligibility criteria that need to be satisfied for the EntrePass. For details, refer to Singapore EntrePass.

One of the biggest advantages of incorporating a Singapore LLC is that the liability of its members is limited only to the investments they have made in the corporation. The liabilities of a Singapore corporation do not extend to its owners. In the event of the corporation running into debts, the personal assets of the company owners will remain protected.

As per Singapore company law you must appoint at least one local resident director in order to register a Singapore LLC. A local resident director can be a Singapore citizen, Singapore Permanent Resident or a foreign Singapore work pass holder. Note that (s)he must be at least 18 years of age. Corporate directors are not allowed. You can also hire a nominee director to satisfy this requirement. Please feel free to contact us if you require the services of a nominee director.

No. The good thing about hiring the services of a nominee director is that you don't have to give him/her an ownership stake in the company. Furthermore, the nominee director need not be involved in the management of the Singapore corporation and neither does he/she have to be involved in the corporation's banking matters.

• If you are a foreigner and wish to register a Singapore corporation you must engage an incorporation agent i.e. a professional services firm, such as ours, to incorporate the Singapore LLC. This is because Singapore law does not allow foreign individuals or entities to self-incorporate a Singapore corporation. Do contact us for further details on Singapore corporation setup.
• If you are a local resident (i.e. a Singapore citizen, Singapore Permanent Resident or Singapore work pass holder) you can choose to self-register a Singapore corporation. Note that if you are self-registering a Singapore corporation, all the directors, the company secretary and shareholders must either be Singapore citizens, Singapore PRs or Singapore work pass holders. It is usually advisable to hire an incorporation agent who will help you satisfy all the statutory requirements and help you set up your Singapore LLC with ease. Feel free to contact us for your Singapore incorporation needs.

• For registering a Singapore corporation: You are not required to be physically present in Singapore at the time of incorporation of the Singapore LLC. Your incorporation agent will incorporate the corporation on your behalf.
• For opening a corporate bank account: Most banks in Singapore require you to be physically present at the time of opening the account. However, some banks may make an exception on a case-by-case basis.

Upon successful registration of your Singapore corporation you can immediately proceed to open a corporate bank account with any of the major banks in Singapore. It may take anywhere between 2-15 days to open an account, depending upon the amount of due diligence that in undertaken by the bank.

The following documents are required for opening a corporate bank account in Singapore:

• Duly completed account opening application;
• A certified copy of your Singapore corporation's 'Incorporation Certificate';
• A certified copy of your Singapore corporation's Memorandum and Articles of Association (MAA);
• A certified copy of the directors', signatories' and ultimate beneficial owners' passport or Singapore identity card;
• A certified copy of residential address proof of the directors, signatories and ultimate beneficial owners;
• A personal bank reference letter;
• A certified copy of Company's Business Profile issued by the Companies Registrar;
• An extract of the board resolution approving the opening of a corporate bank account and authorized signatories.

Note that the document copies must be certified by either the company secretary or one of the directors.

Since Singapore is a major international finance center, Singapore corporations have a broad choice of world-class local and foreign banks for opening an account.

Usually small to medium sized enterprises prefer banking with the local banks owing to lower minimum deposits and lower service fees as compared to foreign banks. Most banks in Singapore offer a wide-array of attractive features such as multi-currency accounts, internet banking, credit cards, trade financing, freedom to move funds across countries, etc. All banks have minimum balance requiremens that varies from S$500 to S$50,000. If the balance falls below the minimum balance, banks levy a monthly charge ranging from S$15-S$50. Note that credit card facilities are not automatic and are subject to approval on a case-by-case basis.

The major local banks in Singapore are:

1. Development Bank of Singapore (DBS);
2. Oversea Chinese Banking Corporation (OCBC); and
3. United Overseas Bank (UOB).

The major foreign banks in Singapore include:

1. Citibank;
2. HSBC; and
3. Standard Chartered Bank.

Yes. Every Singapore corporation must file tax returns annually by November 30 of each Year of Assessment (YA). The tax returns include a declaration of income in a prescribed format, a complete set of audited accounts (unless the corporation is exempt from the audit requirement), and a tax computation statement. For details refer to Singapore Company Taxation.

No. It is not necessary to rent a physical office space in Singapore for registering your Singapore corporation. However, you will require a local registered address to which communication can be sent to. You can use the registered address service of a professional services firm such as ours. Should you require more information about the registered office service, please feel free to contact us.

No. There is no such requirement. However, a Singapore corporation must appoint a local resident and well qualified company secretary, apart from the director. We provide company secretarial services to our clients. Please feel free to contact us for details. Besides the company secretary requirement you are free to engage any number of local staff or foreign professionals. If you wish to hire foreign professionals, you must apply for a Singapore Employment Pass for each of the staff you intend to hire.

• Whether or not you require a business license depends upon the nature of your business.
• Only certain business activities require a license in Singapore. For instance, if you intend to set up a restaurant in Singapore, start a Singapore trading company, establish an employment agency, form a travel agency, set up a retail shop, start an event management company, set up a shipping business, register an educational establishment, or start a financial services company you will require a business license.
• Business licenses must be obtained only after registration of your Singapore corporation.
• You cannot commence business operations unless you have obtained the requisite license.
• For more details, refer to Business Licenses in Singapore.

Yes. Unless specifically exempted, you are required to appoint an auditor for your Singapore Corporation within 3 months of incorporation.

Which companies are exempt from appointing an auditor in Singapore?

Small private companies with no corporate shareholders, <20 shareholders, and an annual turnover of <S$5million; and corporations that are deemed "dormant" due to the absence of accounting transactions during the financial year are exempt from appointing an auditor.

Many sole proprietorships often take the decision of upgrading their business to a Singapore LLC structure, owing to the many advantages of incorporating a Singapore LLC.

The steps involved in converting a sole-proprietorship business to a Singapore corporation are as follows:

• Step 1: Incorporate a Singapore corporation with the Singapore Companies Registrar, ACRA.
• Step 2: Transfer your existing business assets to the new Singapore corporation by converting it into paid-up capital.
• Step 3: Close existing bank accounts and open a corporate bank account in the name of the Singapore corporation.
• Step 4: Draw up a new rental agreement for lease of office space under the name of the Singapore LLC.
• Step 5: Re-draft business contracts or other agreements under the new entity's name.
• Step 6: Apply for new business licenses for the Singapore corporation, as the existing business liceneses are generally considered non-transferable.
• Step 7: Terminate the sole-proprietorship within 3 months of Singapore incorporation with ACRA.

If you are considering upgrading your existing business or sole-proprietorship to Singapore corporation, feel free to contact us for any assistance.

The company secretary is an important node in the Singapore corporation and is regarded as the Chief Administrative Officer of the corporation. The company secretary is responsible for:

• Arranging meetings;
• Preparing minutes of meetings of the corporation;
• Maintaining statutory books;
• Filing statutory returns with the Companies Registrar;
• Ensuring compliance with statutory requirements;
• Registering share transfers; and
• Other administrative matters.