How difficult is materializing your dream of starting a company in Singapore? It certainly is not as difficult as most of the people presumed it to be. Although there is no denying the fact that setting up a company in Singapore may involve a very complex procedure and also, you may be totally alien to it, things have got easier than ever before with so many brilliant incorporation agencies around.
If you are still wondering like how to incorporate a Company, all you need to do is find one such reliable incorporation agency. This will make things a lot faster, accurate and also, it will leave you with a lot of space to concentrate on other important aspects of your business.
This post is a perfect guide to help you understand the entire procedure of registration and by the time you reach the end of this post, you will have learned a lot about how the company registration service in Singapore works. This will help you communicate better with the incorporation agency that you hire.
What is your Business Structure?
Before diving into the registration process, it is important to first determine the structure of your business. Business structure can be classified into 3 categories:
While Public companies can have +50 members and are listed on Singapore Exchange, private companies can at the most have 50 members and also, they are not listed on Singapore Exchange.
As per the Singapore Companies Act, one must be above 18 years to register a Private Limited Company for both local and foreign citizens. A Company comprises shareholders and they are the ones who are actually in charge of appointing the Company Director.
Importance of incorporating a Private Limited Company
Needless to say, there are various benefits to registering a Company.
The liability in case of Company is pretty limited for the owners since companies and owners are separate entities. This is the reason that the owners of a Company, personally, are not really liable for its debts. Also, they are not even liable for legal actions against the Company if any. This is where a Company is a lot different from a Sole Proprietorship or Partnership.
However, in the case of a Company, it is important to fulfill comparatively more ACRA compliances than in Sole Proprietorship or Partnership. Conducting annual general meetings and submitting annual returns is quite mandatory for a Company. In case a Company fails to do so, the ACRA can take action against such a Company. However, removing a Company from the register takes around 5 months.
As far as the benefits are concerned, it is quite easy to raise capital in case of a Company and above all, transferring ownership can be done with the greatest ease. Also, foreigners can have ownership of 100% of the shares of the Company.
Important points to bear in mind prior to the starting of the registration process
One best thing you can do to keep things easier for you is to jot down the important things that would be required in the process. A lot of people miss out on this and eventually, find it hard to keep up with the process. Here are the important things you ought to bear in mind even before the process begins and it is wise to have most of these ready prior to the starting of the registration process.
Appointing a Director
It is mandatory to appoint a minimum of 1 Director for the registration of a Company. However, in order to be selected as the director of a Company, one must be a permanent citizen of Singapore, or a holder of Entrepass, or a holder of Employment Pass.
As far as the other criteria are concerned, one must not be associated with any malpractices and one must have a very clean track record. Most importantly, one should be 18 years old. However, a Company can have as many directors as it wants. Also, a director can be a shareholder too but again, a shareholder cannot be appointed as a director.
Appointing the Shareholders
A private Company in Singapore can consist of 50 shareholders at the most and a minimum of 1 shareholder for the registration process to commence. A shareholder can be an individual or even a Company or a trust. As far as the aspect of ownership of Company is concerned, it can be 100% foreign or local.
When it comes to the Company shares, a Company can either issue new shares or transfer the existing shares to another shareholder but this can be possible only after the completion of the registration process.
Appointing a Company Secretary
This is another important thing to be aware of before you dive into the registration process and this is pertaining to the appointment of the Company Secretary. As per the Singapore Company Act, it is mandatory for a Company to appoint a Secretary for the Company in 6 months from the date of its incorporation.
Also, it is important for the Company Secretary to be a permanent citizen of Singapore. Another important thing that one needs to bear in mind is that in case a Company has only one director or shareholder, one cannot perform the duties of a Company Secretary.
Paid Up Capital
Registering a Company in Singapore takes a paid-up capital of at least S$1. However, it can be raised after the completion of registration.
Registered Company Address
It is mandatory for a Company in Singapore to have a registered office address and it should be an address that is physical and not a post office box address. It can be a space which is either residential or commercial. Also, as per the Home Office Scheme of HDB, one can even use an address that is residential as one’s Company office address. However, it is important to ensure that the public can find it during regular working hours.
As far as Singapore’s rate of corporate tax is concerned, it is 17%. However, registered companies in Singapore can have excellent incentives and tax exemptions. Also, there is no tax on capital gains or dividends.
Important Documents required in the process
There are different documents that will be required as you finally register your Company online by login into BizFile+. It is pretty usual for most of you to be completely oblivious to it but don't you stay unaware for much longer.
Even if you have the best incorporation service agency to assist you, they would not be able to proceed unless you help them with the required documents.
Hence, your awareness relating to these documents will help you accomplish the incorporation quickly. Here are the documents that would be required in the process of Singapore company registration:
Steps involved in the incorporation of a Company in Singapore
The process of company incorporation in Singapore is done online and can be completed within 2 to 3 days. All one has to do is log in to BizFile+ by entering the number of identification and the SingPass. In case, one doesn't have a SingPass, one could hire an agent that can do the filing on one's behalf.
Choosing the name of the Company
To begin with, an application can be submitted with ACRA to get one's company name approved. To ensure that the selected name is not already in use, you can always have a search on BizFile+. As far as time is concerned, it usually takes about an hour or two for a name to be accepted or rejected by ACRA.
However, it can take at the most a few weeks in case, the selected Company name has words such as finance, bank, law, etc. as it may need additional review. Once a name is approved, you can have it reserved for 60 days from the date when you applied for it.
How to have a Company name quickly approved?
Many people experience a huge delay in the approval of the Company’s name and they actually blame it on the process out of being extremely frustrated with the delay. However, this can be easily avoided provided that you go about it a little carefully.
Here are a few important things to bear in mind while selecting a name for your Company if you want it to be approved in no time…
Once you ensure that, there is hardly any reason for any delay in the name approval process. Submit Company Constitution to ACRA
Another important step of Company registration is submitting the Company constitution to ACRA. The Company constitution means a document that contains elaborate details of the ways in which a company is going to be managed internally. Also, it states the actual structure as well as the rights of the shareholders. Also, you can find model constitutions on the ACRA web portal. The lawyers will review the constitution once submitted.
Register the Company on BizFile+
After you have your registered Company address, name and also, a few more details and documents, you can have your Company registered on BizFile+ by filling in all the details as mentioned in the important documents section of this post. However, for this, you have to pay a fee of S$315. Usually, it takes about 15 minutes and in exceptional cases wherein you might need setting up a school, it may take up to 14 days and sometimes, even 2 months.
Preparing the Shareholder Agreement
The agreement of shareholder is actually prepared to cut down on the possibilities of future disputes among the various members of a Company comprising shareholders, managers, and directors by clearly describing the rules and regulations of the Company. Also, a Company can add any particular regulations that are not covered in the Company constitution.
Documents that ACRA will issue after the registration
After the registration process is completed a couple of documents will be issued by ACRA to confirm the Company Incorporation.
ACRA sends an official notification of the incorporation via email and it will contain the registration number of the Company and the same will act as an important certificate of Company registration in Singapore.
As far as the hard copy is concerned, it is no more sent by default. However, one can request for a hard copy online at a cost of S$50 and collect it from the ACRA office.
Business profile of the Company
The business profile contains many important details of the Company and you can actually get it from the ACRA office by submitting an online request by paying a fee of S$16.50 on BizFile+. The document will be available in PDF format in an hour and here are the details it will include:
Ways in which these Documents can be useful
The documents issued by ACRA right after the incorporation such as the Incorporation certificate and Business Profile Document can be highly useful for various contractual and legal purposes such as subscribing to internet services, opening of a corporate bank account, office lease, etc.
Singapore Company Registration Guide for Foreigners
Singapore Company Registration is equally simple for foreigners as well. In case you are a foreigner looking forward to setting up a business in Singapore, it is absolutely possible to set up your Company in Singapore. There are two ways you can go about it.
Either you can use EntrePass to relocate your business to Singapore or you may hire a nominee director. The corporate tax rate currently is between 8.5% and 17% which is certainly quite lower to that of the other counties.
What all Documents will be required?
As far as the required documents are concerned, they are pretty much the same as mentioned above. However, a foreigner would need to produce a couple of more documents in addition to the ones mentioned above...
The Bottom Line
This is pretty much it and now, you certainly have a very clear picture of company incorporation in Singapore right in front of you. Most importantly company incorporation services in Singapore have got a lot better over the years.
However, it is never a bad idea to do good research of the track record of a certain agency before you hire one. One of the best ways you can find out the track record of a Company is by browsing the internet and going through as many reviews pertaining to the performance of an agency so far as possible.