The easiest way to set up a new company in Singapore
Singapore is a country where you can set up a company easily even if you are a foreigner. That is because the new company set up requirements are direct and relatively easy to comply with. Furthermore, there aren’t many restrictions on foreigners compared to other Asian countries. A foreigner can own up to 100% of the shares of the company. They can also repatriate 100% of their sales to their home country. In addition, they can get the same tax benefits local business owners enjoy. That is why many prefer to set up company in Singapore.
Another reason why foreign entrepreneurs prefer Singapore over other countries to do business in is because of the relatively easy incorporation process. The business registration is done online and can take about two days if there are no issues. Although starting your business in Singapore seems quite easy, there is still a way to make it even easier. In this article, we will cover how you can start a new company set up in Singapore. We have six simple steps on how you can set up company in Singapore.
Step 1: Choose the company name
The first step in launching your new company set up is by registering your business name. You need to have your company name registered through ACRA. ACRA is the national regulatory body in Singapore that registers and oversees Singapore businesses. They are also the ones who set the rules on what company name is acceptable or not.
When you set up company in Singapore, it is a must that your business name is not identical to another existing business. It shouldn’t contain inappropriate words especially vulgar ones. It should also contain the proper suffixes. For example, if it is a private limited company, it should have “Pte Ltd” at the end of the company name.
Furthermore, if the company name contains the words “bank”, “school”, or “architect”, you need to get approval from other agencies apart from ACRA. In the case of banks and other financial institutions, it needs approval from the Monetary Authority of Singapore. As for schools and other educational institutions, they need verification from the Ministry of Education. Any business name that has the word “architect” in it should get approved by the Board of Architects Singapore.
It will take longer if you need to get approval from another referral authority compared to business names that do not need additional verification. Usually, it will take a few weeks before the company name gets reserved at ACRA for this scenario. Thus, you need to take into account if the business name you have in mind will take longer to get approval. This is so you can plan your time well in preparing to launch your business.
Step 2: Select a business activity type
The next step in starting a new company set up in Singapore is selecting your business type. You need to declare to ACRA what your business activity will be. This process is done by selecting an SSIC code. This code will indicate what your business does and what industry it belongs to. Thus, if you set up company in Singapore, you must research what your enterprise’s SSIC code is.
Another business type that you should clarify with ACRA is the entity type. Is your company only a representative office of a foreign business? Or perhaps it is a branch office or a subsidiary? Or is it a newly-launched company? Whichever it is, you need to declare it to ACRA. It is also recommended that you research the requirements needed for the entity type you choose.
In addition, you need to verify if your company will be a private company or a public company. Each will have its own set of requirements so you should research this carefully. However, typically, most foreign companies register a private limited company. Furthermore, most of the tax benefits are meant for private companies. Thus, if you are still thinking about what type of company to start in Singapore, select the private limited company type.
Step 3: Form the company staff team
A new company set up in Singapore has to fulfill a staff requirement. Every company in Singapore should have at least one shareholder, one Singapore resident director, and one Singaporean company secretary. Both a person or a business entity can become a shareholder in a local Singapore corporation. It can have up to 50 shareholders that can either be locals or foreigners. If you choose to be the sole shareholder, it is alright too since even foreigners can own 100% of the Singapore company shares.
As for directors, you can have multiple directors when you set up company in Singapore as long as one of them is Singaporean. In your business registration application, you need to submit a document containing the details of the director. If you have multiple directors, you need to submit a separate particulars document for each of them. Some foreign business owners acquire nominal services for their directors. These nominal directors are just appointed to meet the statutory requirements of a Singapore corporation. They are not part of the decision-making process of the company but more of a representative of the company to ACRA.
In the case of a secretary, you need to have one appointed within six months from the date of company incorporation. The company secretary is responsible for all the official documents of the corporation. He or she is the one who makes sure that the company is following all its obligations to ACRA and other statutory responsibilities. You can have more than one corporate secretary since the job entails lots of work. However, there should be a main secretary that ACRA will recognize as the corporate secretary.
In addition, the company secretary should be an individual and not a business entity. Although there are corporate secretarial services in Singapore, these firms usually appoint a specific company secretary for your business. Overall, it is important that you already recruited people to fill in all of these roles.
Step 4: Find a physical Singapore address
You must have a physical Singapore address for your new company set up. This is the place where your director and company secretary should be taking office. This address is also where ACRA will be mailing important documents or sending representatives for audits. Thus, it shouldn’t be a P.O. box address or an address overseas. When you set up company in Singapore, find a place where you can set up an office. It can be a small office space or a rented shared office space. That is as long as it is a physical office in Singapore.
Step 5: Plan the paid-capital
In Singapore, you only need SG$1 of paid-up capital to start a new company set up in Singapore. The Singaporean government mandated this to eliminate the financial barrier in starting a business in Singapore. As a result, many Singaporeans are encouraged to set up company in Singapore. Not only them but also foreigners are motivated to invest in starting a business in the country.
However, realistically, SG$1 is not enough to cover the cost of starting a business. In addition, there are businesses under government agencies that require more than the SG$1 capital. Depending on your business’s industry, you must provide more than the required capital amount. That is why you need to plan how much your paid-up capital will be. You can register your capital in a different currency as long as it is equivalent to the SG$1 limit or more. Aside from that, you can increase the capital amount after you officially set up company in Singapore. This will show that your business is growing significantly since the capital amount is rising.
Step 6: Hire a new company set up incorporation team
Foreigners are not allowed to set up company in Singapore on their own. They need the services of a registered filing agency. This filing agency will be the one who will collect the company documents, fill out the application forms, and submit them to ACRA. Locals also prefer to hire a filing agency since it makes the new company set up process easier. In addition, the company incorporation team is an expert with the business registration process. Thus, you can expect that hiring their services will prevent you from making any mistakes so the company incorporation process will run smoothly.
That is how you start a business in Singapore the easiest way. Hiring a good company incorporation firm is proven to be the most efficient solution when it comes to launching a business in Singapore. They provide services that help first-time entrepreneurs to comply with all the Singapore business regulations.