Setting up a company in Singapore
1. What are the key things to note?
To set up a company, you must ensure that there should be a minimum of 1 director and shareholder. Also, a minimum of 1 director must be a local resident of Singapore, be it a Singapore citizen, permanent resident or an employment pass holder. You must also note that a local registered address is needed as well as an appointed local qualified company secretary.
2. Benefits of setting up a company in Singapore
Singapore known to be the 3rd richest nation in the world and 3rd most globalized economy. Also, by setting up your company in Singapore, there are no taxes for estates, inheritance, death, dividend as well as capital gains. All personal tax rates begin at 0% and a maximum of 20% above S$320,000. All corporate tax rates are estimated to be 8.5% and a flat 17% above S$300,000.
3. What are the essential documents?
For all shareholders or directors that are non-residents, you are required to have a duplicate of your passport, bank reference letter as well as a proof of your residential address in Singapore.
For all shareholders or directors living in Singapore, you are required to have a duplicate of your Singaporean Identification Card and for foreigners; you are required to have a duplicate of your passport.
If the shareholder is a separate legal entity, you will require a duplicate of the certificate of incorporation of your main company as well as official documents showing the directors of the main company’s and registered address.
*Do note that all documents that are not in English are required to be translated to English.
4. Must I be a Singaporean?
You do not need to be a Singaporean, but your company should at least have a director that is a resident in Singapore.
5. Can I set up a company if I’m a foreigner but holding a pass in Singapore?
You are able to, but you’ll have to incorporate your company in Singapore first and following that, apply for an Employment Pass or Entrepreneur Pass from MOM (Ministry of Manpower).
6. How long do I have to wait to incorporate my company?
You will only need to wait 1 day to have your company approved and registered with ACRA (Accounting Corporate Regulatory Authority)
7. What do I need to do after incorporating my company?
You will need to set up your company’s bank account in Singapore, and register for GST (Goods & Services Tax) if your company’s annual income is more than S$1 million. You will need to get any licenses that your business requires before you can start any business activities.
If your company needs to import or export any goods, you will need to get a Central Registration (CR) number. If you plan to employ foreigners, you will need an Employment Pass for each of the foreign employees. They are not ready for employment until the pass has been approved by MOM (Ministry of Manpower).
8. What is a Virtual Office?
They basically provide phone and fax numbers and services that generate an automatic greeting and recoding of message which will then be forwarded to you. For all other documents that needed to be forwarded as well as receipts, you will receive it via fax.
9. How many directors are needed?
You company will require a minimum of 1 director that is living in Singapore.
10. Is it possible to appoint local director for my company if I’m not a resident in Singapore?
11. Why choose Private Limited over Sole Proprietorship?
Private Limited (Pte Ltd) Companies are also known as Limited Liability Companies (LLC). LLC have its own legal entity, which means that it is separate from shareholders and directors. Directors and shareholders will only be responsible for their own liabilities.
Sole Proprietorship on the other hand does not have its own legal entity, which means that the sole proprietor and its business are one and the sole proprietor will be responsible for all liabilities of the business. Thus, it will be better to have a Private Limited Company, if your company will be having many directors and shareholders, as it has separate legal entity which will not bind the whole company but only the individual.
12. Why choose Private Limited over Limited Liability Partnership?
Private Limited companies are easier to raise capital. This is because they are able to add partners, business funds etc. As there is separate legal entity, investors are also more likely to invest in Private Limited Companies.
However, a Limited Liability Partnership is usually limited by the partners’ contributions to the business. Thus, it is more difficult to raise capital as compared to Private Limited Companies due to the limitation of partners’ contributions as well as private finances.
13. What is paid-up capital?
Paid-up capital is total amount of money that shareholders put in the business which is meant to purchase shares.
14. What is minimum amount for paid-up capital?
To set up a company in Singapore, the minimum paid-up capital is S$1.
15. What is the difference between a virtual office and a physical office?
Virtual Office provides a local as well as international telephone number of the company and it can be used anywhere. On the other hand, a physical office does not provide international telephone number, which means that your telephone number is only available locally and cannot be relocated as and when you want.
16. Who can become a shareholder of a company?
Anyone and anybody can become a shareholder, as well as companies.
17. What is the difference between shareholders and directors?
Shareholders are part of the company and they are given rights to the company’s profits. Directors are the ones that will operate and manage the company and to deal with the day-to-day responsibilities.
18. What is the eligibility to be a director?
Anyone who is 18 years and above and they must be a Singaporean Citizen, Permanent Resident or a foreigner that has the Employment Pass or Entrepreneur Pass.
19. What are the duties and responsibilities of a director?
They are responsible for the day-to-day operations as well as the decision-making process of the company.
20. Am I able to open a corporate bank account in Singapore?
Yes, you are able to open a corporate bank account once you have incorporated your company.