The Lion City, Singapore, is truly a formidable giant in terms of its economy and technology. A supportive government, welcoming tax laws and suitable intellectual property laws with transparent policies have made Singapore one of the most sought-after business havens.
This small island nation has minimal red-tape for doing business and is one of the least corrupt countries in the world. It has a well-developed infrastructure that can meet all the demands of the business industry. The pro-business environment has encouraged investors around the globe to venture out in this country.
The majority of the businesses are registered and recognized as private limited companies in Singapore. Any local or foreign investor can legally start a business in Singapore after fulfilling regulatory requirements.
What are the requirements to register a company in Singapore?
To register a company in Singapore as a foreigner, you have to hire a registered Singapore company incorporation service. The Singaporean government, particularly the Singapore Accounting and Corporate Regulatory Authority (ACRA) requires this for non-residents. The ACRA is the Singaporean government agency that handles application approvals. If you try to self-register, the Singaporean government will not entertain you.
Your company incorporation service provider is responsible for dealing with the ACRA on your behalf. Your part is to furnish your company incorporation service provider with the required documents so that they can submit them to ACRA for you. The documentary requirements are discussed under “What documentation do you need to register a company in Singapore?”
The following are the prerequisites which need to be fulfilled before starting a company:
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Company name - Before opening a company, its name should be approved. For quick approval, ensure the name is unique, relevant to the industry you are targeting, not reserved by any other firm and does not violate any trademarks.
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Company Address - A local national address is a must before starting a company in Singapore. The address cannot be a P.O. Box number, it has to be either commercial or residential.
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Directors - At least one person who is a Singaporean resident must be appointed as the Director of the company. According to Singaporean Company Law, a resident is either a Singapore citizen, Permanent Resident, a person with a Dependent’s Pass, or an EntrePass Employment pass. The person should be at least 18 years of age and should not have been convicted in any legal cases in the past or be bankrupt. As such, there is no requirement that the Director has to be a shareholder of the company as well. A non-shareholder can be appointed as the director.
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Shareholders - The shareholders may be local or foreign nationals. A company needs to have a minimum of one shareholder and a maximum of 50. Singaporean companies can have 100% local or foreign ownership.
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Company Secretary - As per Section 171 of the Singaporean Companies Act, every company must appoint a qualified company secretary within 6 months of incorporation. He or she should be a national resident. In the case where only one person is serving as both Director and shareholder, they cannot act as the company secretary.
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Paid-up Capital - The minimum paid-up capital or share capital for registration of the company is S$1. This capital can be increased anytime after the incorporation of the company.
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Taxation - Singapore beats all other countries with its super tax-friendly nature. Singaporean companies enjoy attractive tax exemptions and incentives which is the main reason why foreign businesses wish to invest in the nation.
Your company incorporation provider can also arrange for your meetings with law services and local banks.
Opening a bank account is the most important step in starting a company in Singapore. Open a bank account thereafter you incorporate. Accounts may be opened at any of the local or international banks.
Here’s how to open a bank account in Singapore.
If the company you’re registering in Singapore will regularly be banking and transferring money abroad, there are ways to cut on conversion costs and transfer fees. Banks charge above the mid-market rate, the actual currency rate they use to move money from one bank to another.
Whereas if you transfer money through a virtual bank account by B2B Pay, you save a significant amount of these costs as well as get your money as soon as 24 hours depending on the bank. With a virtual bank account, you can secure your own European IBAN you can use to transfer money to 212 countries in 32 currencies using the same low rates.
Legal structures
These are the three ways companies can be legally structured in Singapore:
Private Limited Company
Many new companies register as ‘private limited companies’ with the Accounting and Corporate Regulatory Authority (ACRA), due to its scalability. Companies are separate legal entities from their owners. Hence they are not personally responsible for any of the company’s debts or losses beyond their share capital. As designated, the company is recognized as a taxable entity. A private limited company can have as many as 50 shareholders.
Listed Company
To raise capital, a listed company can issue shares and bonds to the public once it has approval from the local government authorities. This type of company entity can have 50 or more shareholders.
Singapore Branch of a Foreign Company
Instead of putting up an incorporated company, an existing foreign company can just set up a branch in Singapore.
Best industries to open a company in Singapore
The appropriate sectors to open a company in Singapore include:
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Trading, one of the most thriving industries in Singapore at the moment.
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FinTech, the most successful industry which has developed in Singapore in a short timeframe.
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Technology, often preferred by the youth for its attractive perks and competitive salaries.
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Health and fitness in Singapore have evolved drastically over the past few years.
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Telecommunications, Singapore is the telecom hub of the Southeast Asian region.
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Travel and tourism, one of the largest contributors to the Singaporean economy.
Apart from these, Singapore offers tremendous scope for investment in many other industries such as education, medicine, manufacturing, beauty, electronic goods, online marketing, and real estate.
What documentation do you need to register a company in Singapore?
Once your company name is approved, prepare the following documents prior to applying for company registration with ACRA.
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Company Constitution (formerly referred to as Articles of Association) - You have the option to take on the standard company constitution in Singapore which you can obtain from ACRA. It is up to standard for most companies and embodies provisions that are deemed to be equitable for all parties involved in the incorporation.
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Consent to Act as a Director (individual document signed by each director)
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Consent to Act as a Company Secretary (signed by the company secretary)
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Identification and residential address specifics of each company officer and shareholder.
ACRA also requires your Corporate Service Provider or CSP to carry out a Know Your Customer (KYC) due diligence. This is to comply with the international Anti-Money Laundering regulations.
The following are the standard minimum requirements to validate the information you gather:
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Documents to verify identification and address
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Professional credentials of the proposed company’s officers and stakeholders
Depending on their internal procedures, the documentary requirements may vary from one CSP to another.
Things to take note of:
- Make sure all your documents are in English or officially translated to English.
- Check for special licensing when opening a company in Singapore. In Singapore, it is required to attain some special licenses depending upon the nature of the business you intend to open, which applies mostly to insurance, banking, stockbroking, firecracker production, and cigar manufacturing.
How long does it take to register a company in Singapore as a foreigner?
As long as they have the necessary documents ready, foreigners can set up your company in Singapore within a day. Thanks to the country’s openness to investment, this unbelievable turnaround is made possible.
That said, registration may take 2 weeks to 2 months if the need to refer the application to the appropriate government agency for approval arises. However, the registration can be disapproved under the Companies Act if the proposed company is foreseen to be:
- Damaging to the welfare, peace and good order towards the people of Singapore
- Used for illegal activities
- Conflicting with the national security or interest of Singapore
Nonetheless, the applicant can make an appeal to the ministry who notified them of the decision within 30 days of the date of the disapproval.
With its pro-business landscape, anyone can easily and quickly register a company in Singapore - even foreigners, especially with the help of a competent company incorporation service provider. From the reservation of your preferred company name to filling up forms and submitting them to the registrar of companies, it’s possible to accomplish this in one day.
Additional Resources for Companies Doing Business in Singapore
If your business is related to fintech, check out this article to find out why Singapore has become the new destination for European fintechs.
If your business is involved with B2B export from Singapore to Europe, you may want to check out this article to find out more about permission to export, transshipping goods, and legal requirements to export goods into the EU.
To save on crossborder money transfer fees for your newly-registered company in Singapore, discover how global companies with business transactions in Europe solve the problem of slow, expensive, and frustrating international banking using a virtual bank account by B2B Pay.