Company Incorporation in Singapore? Now is the Right Time for It
Each year, thousands of entrepreneurs commit their resources to company incorporation in Singapore. The latest reports say that the global economy which includes Developing and Emerging Economies are showing a marked in growth rates. Singapore, the land of business opportunities, has also had better than expected Q1 and Q2 2017.
Time Your Singapore Company Incorporation Carefully
It does not exactly mean that the Global or Singaporean economy is firing on all its cylinders. But it is a clear indication of better things to come. Remember the saying, “Early bird gets the fattest worm!” Well, is this a good enough reason for you to do away with your hesitation and indulge in a Singapore company incorporation and get a toehold in this renowned business hub?
Singapore is a pro-entrepreneur, pro-trading, and stable marketplace that has a well-supported startup ecosystem in place. According to the World Bank report (2017), it ranks second in the list of easy places to do business in after New Zealand. It is a great destination for the offshore business incorporations and for entrepreneurs who are planning to relocate to Singapore. It is also the jurisdiction that permits 100% foreign ownership, lower corporate and personal tax rates.
Startup Ecosystem of Singapore
The easy access to funding, excellent infrastructure, reliable communication networks, air & sea links are integral to the success of any business including the startups. Singapore government has invested healthy in its startup ecosystem. It started with financing programs, incentives, and another initiative. Now, it has a number of accelerator and incubator programs to support its startup companies.
Type of Businesses Entrepreneurs Can Register in Singapore
Anyone above the age of 18 years or more can register a company in Singapore. The local, as well as foreigners, can own 100% shares of their companies. The foreigners need Employment or Entrepreneur Pass to work in Singapore. Following are the types of businesses the individual entrepreneurs can register in Singapore.
- Sole Proprietorship
- Limited Liability Partnership (LLP)
- Private Limited Company (PLC)
- Exempt Private Company (EPC)
A sole proprietorship is the simplest form of business structure the entrepreneurs can register in Singapore. The expert advice to use it to conduct the business activities where the liability is at its minimum.
- The business owner is the master of its own company.
- A sole proprietorship is not a legal entity and has to depend on its owner for its identity.
- The proprietor is fully responsible for the losses or debts of the sole proprietorship.
- Owner’s assets may be called upon to pay the debts.
- The income of the proprietorship is treated as that of its owner. They have to pay personal income tax on it. The tax rates are in the range of 0%-22%.
Limited Liability Partnership (LLP)
A limited liability partnership is one of the forms of partnerships. The other being, General Partnership, and Limited Partnership. However, LLP is a more preferred form of partnership by the business owners in Singapore.
- The business structure underlying these firms allow the two or more professionals having complementary skills to come together and opt for Singapore company registration.
- The partners or members in a partnership need to document the sharing of profits and losses, their duties, hours of business, etc.
- Usually a solicitor to prepare this document.
- In an LLP, the partners are liable for the losses or debts because of their actions, inactions or mistakes. The other partners are absolved from the responsibility.
- Their assets are at risk.
- They have to pay personal tax on their income from the partnership.
Private Limited Company (PLC)
Singapore private limited company is a very dynamic & scalable business structure. A large number of entrepreneurs prefer this business structure for their company incorporation in Singapore
- As per the Companies Act of Singapore, a (Pte Ltd) private limited company is a legal parson and has the rights of a natural born person.
- It does not depend on its owners (Shareholders) for identity.
- It has the right to buy property in its own name.
- It has 1-50 shareholders.
- It limits the shareholder’s liability to the amount invested in company’s shares.
- A Pte Ltd is responsible for its own debts.
- Its existence does not depend on the shareholders who may pass away or transfer shares.
Exempt Private Company (EPC)
- An Exempt Private Company is exactly like a Pte Ltd. However, it cannot have more than twenty shareholders.
- It should not have any corporate as its shareholder.
- EPCs enjoy reduced compliance requirements.
- An EPC is exempted from statutory audit requirements if its annual turnover is below S$ 5million.
- It needs to submit a solvency declaration signed by its company secretary and directors.
Singapore Company Incorporation Services
The first-time business owners may need assistance for selecting the right legal structure for their business. They can turn to Singapore company incorporation services providers like SBS Consulting to know the immense advantages that a private limited company can offer to them and whether it is suitable for their business. These providers have experts who ensure that your company is incorporated as per the provisions specified in the Companies Act of Singapore.
SBS Consulting assists you in completing following tasks;
- Registration of the Name of the proposed company
- Register Company with the ACRA
- Obtain Certificate of Incorporation
- Obtain Company Business Profile
- Opening a Corporate Bank Account
- Applying for Business Permits & Licenses
- Goods and Service Tax (GST) registration
- Annual Filing Requirements
Pre-Incorporation Requirements for Singapore Company Incorporation
- Minimum initial paid-up capital of S$1
- At least one resident director
- At least one company secretary
- At least one shareholder
- Local Registered office address (P.O. Box address is invalid)
Process for Setting Up a Company in Singapore
The process for setting up a company in Singapore, unlike that in other jurisdictions, is a highly simple affair. It has only two procedures in it. The experts appointed by the Singapore company incorporation services a) search for the availability of the desired company name and register it for the client’s use, and, b) Apply to ACRA to register client’s company.
Registering Company Name of Proposed Company
Our expert advice our clients to carefully select the name of the company. As the Company Registrar of Singapore, ACRA has the right to reject vulgar, black-listed, inappropriate, or confusing company names. It also rejects the names that are similar or identical to the existing company names. The reason is to avoid the confusion in the minds of investors and protect their interests. ACRA insists on UNIQUE company names.
We ask our clients to supply us with a list of 3-5 desired names. The name of the company is highly useful in branding it in the eyes of the customers, suppliers, and creditors. It has to be catchy, simple, and easy remember. It should reflect the company’s purpose and business activities. Nowadays, companies also need to maintain an online presence. It means that the business owner should choose a company name that is also available as the domain name.
Normally, it takes no time to register a company name. Once approved it can be reserved by paying ACRA fees for 60 days for the client’s use. However, the names containing terms like Bank, Casino, Educational, or Financial, are forwarded to the concerned authorities for the approval. The approval for such names usually takes time.
Registering a Singapore Company with ACRA
With a registered company name in their hand, our experts initiate the Singapore company registration process. ACRA sends an email containing the Certificate of Incorporation. In Singapore, its soft copy is perfectly valid. We can get its hard copy by paying the required ACRA fees. The ACRA sends it in the printable PDF format. The email also contains company’s unique identification number, business profile, etc.
The foreign entrepreneurs need a work pass to operate in Singapore. They can apply and acquire employment or Entrepreneur pass and can work as the director of their company. They also have the option of appointing a local director or a nominee director to fulfill the requirement.
Why Opt for Company Incorporation in Singapore?
There are plenty of reasons for the entrepreneurs to choose to register their company in Singapore. The following are the most prominent one.
Ranked Second for Ease of Doing Business Index
The Ease of Doing Business report 2017 places Singapore at the second rank on the basis of ease of starting a business, dealing with construction permits, registering property and paying taxes. The report is prepared by the World Bank.
However, Singapore has occupied the top position in the list for the last decade. Singapore has signed extensive Double Tax Avoidance (DTA) treaties with more than 70 trading-partner countries. All in all, it is still the most favored country in the eyes of the entrepreneur for registering their startup.
Singapore: A Thriving Economy
Singapore is one of the most cherished and freest economies in the world. It’s manufacturing industry that is populated by the multinational entities. Its service sector is also the main contributor. Both of these sectors contribute 80% to 85% to its GDP. UN World Investment Report 2016 pegs FDI in Singapore at US$50 billion. In Jun 2017, FDI in Singapore increased by 13.5 USD billion.
Singapore is a trade-based economy. It is now counted among the technologically advanced economies of the world. The major credit rating agencies like JCR, Dagong Global, Standard & Poor’s, Moody’s and Fitch have awarded it the AAA credit ratings. One of the USPs of Singapore company incorporation is that it is easy and takes very less time than one would require in other jurisdiction.
Stable Political Environment
Singapore enjoys political stability and almost corruption less government. It offers the highest standard of living in Southeast Asia. It is one of the factors that stand in its favor when business owners are deciding about the destination for incorporating their businesses.
The political system has played an important role in the success of Singaporean society and economy. It is, along with the New Zealand, one of the least corrupt countries in the world. Its legal system is transparent, and the rules and regulations are frequently updated to accommodate the latest changes in the market. It offers strong IP laws, and the absence of red-tape is a positive factor.
Singapore is a modern city that offers reliable telecommunication system & mass transport system, best medical facilities, safe living environment, dependable sea and air links, & world-class educational system. Singapore levies progressive tax rates. The effective corporate tax rate ranges from 8.5%-17% and the dividends disbursed by the companies are tax-free. The personal income tax rate ranges from 0%-22%. All these factors actually force business owners to opt for company incorporation in Singapore.