Singapore is one of the most attractive destinations for businesses due to its strategic location, robust economy, pro-business environment, and transparent regulatory framework. Whether you’re a local entrepreneur or a foreign investor, setting up a company in Singapore can be a straightforward process if you follow the right steps.
This guide will walk you through the essential steps to establish your business in Singapore.
1. Choose a Business Structure
The first step in setting up a company in Singapore is deciding on the type of business structure that best suits your needs. The most common types of business entities in Singapore are:
- Private Limited Company (Pte Ltd): This is the most popular and flexible business structure in Singapore. A Private Limited Company is a separate legal entity from its owners, providing limited liability protection to its shareholders.
- Sole Proprietorship: This is the simplest form of business structure, where the business is owned and run by a single individual. However, the owner is personally liable for all the debts and liabilities of the business.
- Partnership: In a partnership, two or more individuals or entities come together to conduct business. There are two types: General Partnership (where all partners are equally liable) and Limited Partnership (where liability is limited to the amount invested).
- Limited Liability Partnership (LLP): This structure combines the benefits of a partnership and a private limited company. Partners in an LLP have limited liability, and the LLP is a separate legal entity.
- Branch Office or Subsidiary: Foreign companies can set up a branch office or a subsidiary in Singapore. A subsidiary is a separate legal entity, while a branch office is an extension of the parent company.
2. Reserve a Company Name
Once you’ve decided on the business structure, the next step is to choose and reserve a company name. The company name must be unique, not identical or similar to an existing entity, and not contain any offensive or restricted words. The name reservation is done through the Accounting and Corporate Regulatory Authority (ACRA) and typically takes one to three days for approval.
3. Appoint Directors and Shareholders
A Singapore Private Limited Company must have at least one director who is a resident of Singapore. A resident director can be a Singapore citizen, a Permanent Resident, or someone holding an EntrePass, Employment Pass, or Dependent Pass with a local address. There is no maximum limit on the number of directors. The company must also have at least one shareholder, who can be an individual or a corporate entity, and there can be up to 50 shareholders in a private limited company.
4. Registered Office Address
Every company in Singapore is required to have a registered office address where all official communications and notices can be sent. The registered address must be a physical location in Singapore, and it cannot be a P.O. Box. The office must be accessible to the public during normal business hours.
5. Prepare the Required Documents
To incorporate a company in Singapore, you will need to prepare the following documents:
- Company Constitution: This document outlines the rules and regulations governing the company. You can use the standard constitution provided by ACRA or create a customized one.
- Consent to Act as Director and Secretary: Each director and the company secretary must provide written consent to act in their respective roles.
- Identification and Address Proof: For all directors, shareholders, and company officers, you will need to provide copies of identification documents (such as passports) and proof of residential address.
6. Incorporate Your Company with ACRA
With all the necessary documents and information in hand, you can proceed to register your company with ACRA through the BizFile+ portal. The incorporation process is typically completed within a few hours, provided all documents are in order and there are no complications. Once your company is successfully incorporated, you will receive a Certificate of Incorporation and a Unique Entity Number (UEN).
7. Appoint a Company Secretary
Within six months of incorporation, a Singapore company must appoint a company secretary. The company secretary is responsible for ensuring that the company complies with all statutory requirements, including filing annual returns and maintaining proper records. The secretary must be a natural person who is ordinarily resident in Singapore.
8. Open a Corporate Bank Account
After incorporation, you will need to open a corporate bank account to manage your company’s finances. Singapore has a wide range of local and international banks offering corporate banking services. To open a bank account, you will typically need to provide the company’s incorporation documents, the directors’ resolutions, and identification documents for the signatories.
9. Register for GST (If Applicable)
If your company’s annual revenue exceeds SGD 1 million, you are required to register for Goods and Services Tax (GST) with the Inland Revenue Authority of Singapore (IRAS). Once registered, your company must charge GST on the sale of goods and services and file regular GST returns. Even if your revenue is below the threshold, you can choose to voluntarily register for GST.
10. Obtain Necessary Licenses and Permits
Depending on the nature of your business, you may need to apply for specific licenses or permits before commencing operations. For example, if you are opening a restaurant, you will need a food shop license. If you are in the finance or healthcare sector, additional regulatory approvals may be required. The type of licenses needed can vary significantly based on your industry, so it’s essential to check the requirements specific to your business.
11. Comply with Ongoing Regulatory Requirements
After your company is set up, it is crucial to comply with Singapore’s ongoing regulatory requirements to avoid penalties or legal issues. These requirements include:
- Annual General Meeting (AGM): A Singapore company must hold its AGM within six months after the end of its financial year.
- Annual Returns: The company must file its annual returns with ACRA within seven months after the end of its financial year.
- Financial Statements: Companies are required to maintain proper accounting records and prepare financial statements in accordance with the Singapore Financial Reporting Standards (SFRS).
- Tax Filing: Corporate tax returns must be filed with IRAS annually, along with any applicable GST returns.
Setting up a company in Singapore is a relatively straightforward process, thanks to the country’s business-friendly environment and efficient regulatory framework. By following these steps, you can establish a strong foundation for your business and take advantage of Singapore’s strategic location, skilled workforce, and pro-business policies. Whether you are a local entrepreneur or a foreign investor, Singapore offers a wealth of opportunities for growth and success.
