Overview

Nested in southeast Asia, Singapore has grown into the most advanced nation in the world. It is touted for its world-class infrastructure, robust governance, liberalized policies, and tax-friendly environment. Anyone seeking to start a new venture here must fulfill underlying legal requisites, which essentially means legalizing the entity and securing industry-specific approvals. Let’s take a closer look at the requirements concerning company registration in Singapore and related regulations.

Legal Structures for Company Registration in Singapore

Singapore is a tax-heaven nation brimming with endless growth opportunities. It is the best fit for those looking to churn consistent profit without messing up with massive compliances. Let’s take a glance at the following legal structures suitable for company registration in Singapore.

Private Limited Company (Pte. Ltd.)

The Private Limited Company, aka Pte. Ltd., is a popular legal structure in Singapore. It offers several benefits, such as limited liability, transparent hierarchy, risk diversification, etc. It can have as many as 50 shareholders. At least one director in this entity should be of native origin. Such entities are entitled to raise capital via equity.

Limited Liability Partnership (LLP)

LLP is a famous legal structure that provides for risk diversification and better control. Although it is not as robust as a private limited entity, it offers some degree of flexibility. Two or more people can constitute this structure through a binding document boasting mutually agreed norms. The members are not liable to address entire business-related losses. The member shall only render the mutually agreed amount to compensate the company’s losses. However, losses occurring from misconduct require the personal contribution of the defaulter.

Sole Proprietorship

A sole proprietorship offers 100% control to the owner owing to comprehensive ownership. However, it lacks transparency and flexibility, unlike other structures. Also, it does not boast limited liability, presenting a risk to the owner’s assets in crisis. Another big pitfall of using this structure is the possibility of higher tax rates with no exemption whatsoever.

Subsidiary Company

It serves as an aid for the parent company and is primarily used for share management. It attracts applicable corporate taxes and incentives. The parent company is not liable to adjust losses arising from such an entity.

Branch Office

A branch office is a part of the overseas parent entity; hence, it does not hold individual legal status. Losses encountered by BOs shall be the responsibility of the parent organization. Unlike subsidiary companies where tax benefits are prominent, no such liberty is available to BOs since they fall under a non-resident entity.

Representative Office (RO)

A representative office (RO) can cater to limited scope of operations. ROs have no tax and legal status. They essentially promote a company’s offerings or conduct market research. ROs are not entitled to perform commercial undertakings or enter into contracts.

Compliances for incorporating new venture in Singapore

• The presence of at least one shareholder is the first fundamental requirement for company incorporation in Singapore. The upper limit in this context is 50.

• The Singapore corporate structure supports 100% overseas shareholding with no restriction on nationality.

• You can set up an entity with capital as low as 1 Singapore dollar. The capital can have additional funds after securing approval from the registrar.

• An indigenous entity can have one foreigner and one local resident as directors.

• A local company must have a Company Secretary belonging to native origin. A CS oversees the regulatory affairs of the company and keeps it compliant.

• The company must have legal premises in Singapore for carrying out business operations. This should be the place for managing the statutory documents.

Tax Structure for Entities in Singapore

The standard corporate tax rate applicable to registered entities in Singapore is 17%. Partial taxes shall be imposed on the first income of  SGD 300,000. Essentially, the tax exemption shall look like the following:

• 75% of the first SGD 10,000 - No taxes
• 50% of the next SGD 290,000 - No Taxes

Singapore also leverages the value-added tax system, widely known as Goods and Services Tax. It is clocked at 7% in the status quo. GST primarily imposes taxes on end-users services and goods. The imported goods also fall under the GST regime.

However, dutiable goods are subjected to specific tax rates. GST applicable to such goods is computed based on CIF, and the last selling price provided the dual sale has taken place with duties and charges.

Mandatory Paperwork for Company Registration in Singapore

Individual Shareholder Documents

• Passport copy
• ID proof concerning Singapore-based members
• Residential address proof, such as rental agreement and utility bill
• Professional background details

Corporate Shareholder Documents

• Certificate of incorporation
• Details of parent company’s operations, capital, and shareholding.
• Document reflecting parent company’s UBO, which stands for Ultimate Beneficial Owners

Board resolution authorizing the subsidiary company incorporation.

Guide to Secure Company Registration in Singapore

The following guide entails all the steps concerning the company registration in Singapore:

Step 1: Select the corporate structure

Selecting the corporate structure that can align with your goals and requirements can be tricky. There are numerous factors to consider before finalizing the structure, such as compliance threshold, tax arrangement, management hierarchy, risk diversification, business expansion, etc.. Look out for a structure that seamlessly aligns with these factors and offers sustainability and flexibility you are looking for.

Step 2: Reserved Company Name

The next tricky step is the company name reservation, which requires moderate research and legal drill-down. Initially, you may come across names that are either trademarked or in use. As a best practice, avoid selecting such names and go for the one that is unique, non-offensive, and unregistered.

Step 3: Authorization of Incorporation Documents

Upon name reservation, head to the Accounting and Corporate Regulatory Authority (ACRA), a company registrar, to authorize the documents cited in the erstwhile section.

Step 4: Online Application Filing

The next step is all about the online application filing. For this, you must visit the ACRA portal and complete the incorporation application. The details in the form should be accurate and free from any factual error. The authority will thoroughly vet these documents and proceed to the next step.

Step 5: Grant of Incorporation and other documents

Upon document vetting, the authority shall grant the following deliverables:

e-Certificate of Incorporation

This is the digitized version of the incorporation form boasting details like company name, incorporation date, and unique identification number. This is the official grant of company registration in Singapore.

Business Profile

This document reflects what legal structure the company has adopted. Also, it shows details like business activities, shareholders' and directors' info, registered addresses, and shareholding structures.

Adviso: Go Global With Confidence and Clarity

At Adviso, we pay attention to every detail which could hinder your global ambition. Our strength lies in holding onto factors that can make and break your business. Our unprecedented command over regulations allows us to deliver exceptional results for clients. If you want prompt establishment of your dream venture or secure company registration in Singapore in one go, look no further than Adviso.

Here’s why you must join Adviso

• Guaranteed end-to-end support for your global ambition
• An impeccable grasp of overseas regulations
• Ensure prompt settlement of disputes, if any
• A robust network of professionals for handling complicated legalities