How to Register a New Company in Singapore
What is the Company?
A Company is a legal entity, exists separately and independently from its shareholders, directors, members.
Types of companies
Private Company
A privately own company can have a maximum of 50 members.
Public Company
(i) Public Company limited by shares
A public company may raise capital by providing shares and debentures to the public. The company limited by shares can have 50 or fewer shareholders.
(ii) Public Company limited by guarantee
A Public Company Limited by Guarantee is usually formed for not-for-profit purposes e.g. charitable cause. Such an entity does not have shareholders but members who guarantee to undertake to pay a fixed sum to the liabilities of the company.
A Company Limited by Shares is owned by shareholders who in turn appoint directors to manage and run the business. They is no limit to the number of directors a company can appoint, but they must be at least 18 years of age, has a local residential address, not bankruptcy and clean in a criminal record.
Companies limited by shares are owned by shareholders, who have certain rights. The shareholders appoint the directors to manage the affairs of the company and providing it with directions.
Why Incorporate a Company?
A Private Limited Company is a separate legal entity independent from its shareholders, directors, members. Hence, shareholders of a private limited company are protected as they are not liable for any debt, loans, etc. incurred by the company beyond the shareholders’ investment in the company’s share capital.
Company registration in Singapore is required to fulfill the statutory requirements to hold an Annual General Meeting and file Annual Return Filing. Failure to do so within the stipulated timeframe is an offense under the Companies Act, Cap 50.
To close down a company and strike off from the register after incorporation, the entire process will take at least 4 months to 6 months.
Entrepreneurs prefer private limited companies for their ease of raising capital and easier transfer of ownership.
A company has more formalities and procedures to comply with Annual Returns must be filed. There are statutory requirements for general meetings. Failure to hold the Annual General Meeting within the stipulated timeframe is an offense under the Companies Act, Cap 50. The entire process to close a company will take at least 4 months for the name of the company to be struck off the register.
Entrepreneurs prefer private limited companies for their ease of raising capital and easier transfer of ownership.
Setting Up a Company in Singapore
Directors
In Singapore, there must be at least one local resident director appointed in a Private Limited Company under the Companies Act. The director must be either a Singapore Citizen, a Singapore Permanent Resident, or an individual who holds a valid Employment Pass in Singapore. The local director must be 18 years of age, has a local residential address, not a bankruptcy, and clean in a criminal record.
A company must have at least one resident director (a Singapore Citizen, Singapore Permanent Resident, an EntrePass holder or an Employment Pass holder).
A director must be above the age of 18 years old, must not have been bankrupt or convicted of offenses involving fraud or dishonesty.
Shareholders
A private company must have at least one shareholder and a maximum of 50 shareholders. A shareholder can be any individual or corporation.
The company may allow new shares or transfer shares.
Secretary
It is mandatory as stipulated by Singapore’s Accounting and Corporate Regulatory Authority (ACRA) that every company must appoint a company secretary within 6 months of its incorporation. A sole director and or shareholder cannot act as the company secretary.
Paid-up Capital
The minimum issued capital is $1. Share capital can be increased.
Registered Office Address
A Singapore address will be required as a Registered Address of the company at the point of incorporation. This Singapore address must be both operational and accessible to the public and can be either at a residential or commercial address. It cannot be a P.O. Box address.
If the residential address is to be used as your business address, prior approval must be obtained from the respective authority (e.g. HDB for public residential address; URA for private residential address).
Corporate Income Tax
Singapore’s corporate tax rate is 17%. However, newly incorporated companies meeting the qualifying criteria shall enjoy attractive tax exemptions for the first three consecutive YA (Year of Assessment):
*Normal chargeable income refers to income to be taxed at the prevailing corporate tax rate.
New start-up companies are given $125,000 tax exemption on the first S$200,000 chargeable income.
Singapore does not tax capital gains.
Generally, dividends are not taxable.
Required information for company registration
To complete the incorporation for company registration, the information required is:
How to Register a Business in Singapore
Company registration in Singapore will be carried out via online submission with ACRA’s BizFile (an electronic filing and information system). With all the required information provided, the entire process takes within 15 minutes after the name application fee is paid. However, the process may require an extended time of at least 14 days to 2 months should the lodged company name be referred to another agency for approval. Hence, we encourage customers to select 2 or more company names apart from your first selection as an alternative to avoid unnecessary time delay should the first choice name be referred.
The step is to choose the name of the company and then to know how to register a business in Singapore.
1. Company name and address
The first step is to choose a name for the company. Application for a new company name may take 3 working day(s) to process. However, the process may require an extended time of at least 14 days to 2 months should the lodged company name be referred to another agency for approval.
ACRA system automatically processes the lodged company name and revert with an outcome. A selected name may be rejected if it is found similar to any existing local business name; or if it infringes any registered trademark, or it is deemed as obscene or vulgar.
An approved name will be reserved for 120 days from the date of approval by ACRA.
2. Constitution
This is a legal document that sets out regulations on how a company will be internally governed, its structure, shareholders’ rights and regulations on the management of a company. Constitutions can be either drafted by shareholders/directors from scratch or obtain a model constitution from ACRA.
3. Complete the incorporation
The registration fee is $315. This transaction will take about 20 minutes to complete.
Usually, it will be no more than 3 working days to process each application. However, should the selected lodged company name be referred to ACRA for further review? The process of incorporation may be extended between 14 working days to 2 months. Hence, we encourage customers to select 2 or more company names apart from your first selection as an alternative to avoid unnecessary time delay should the first choice name be referred.
You will receive an email with a URL to download the following shortly upon successful incorporation:
1. Certificate Confirming Incorporation of Entity
An official email will be sent confirming the setup of the company. However, a hard copy confirmation known as Certificate Confirming Incorporate of Entity can be requested from ACRA at a fee.
2. Free Business Profile
A Business Profile containing the newly setup company and officers’ particulars may be obtained from ACRA will be made available.