Moving to Singapore for Company Incorporation: An Expat’s Guide
Moving to a foreign land is not an easy feat to accomplish. But it can be adventurous and exhilarating one when you are considering a nation like Singapore that has immense opportunities to offer. Considering the fact that Singapore business is easy to incorporate, a large number of expats move to this South Asian nation on a yearly basis.
Singapore business incorporation process involves few straightforward procedures to perform and thus, you can open company without facing any major hurdles. But, the nation has imposed a set of strict laws and regulations in order to the maintain the reputation it holds as ‘one of the least corrupt country in the world’. This guide will help you get acquainted with the some compliance matter along with general information on starting a business in Singapore.
Secure A Valid Work Visa- Employment Pass (EP) or Entrepreneur Pass (EntrePass)
A foreign individual who is planning to start a business set up in Singapore must have a valid work visa (Employment Pass or Entrpass) which allows the expat to live and operate a business in its soil. Employment pass and EntrePass are issued by the Ministry of Manpower (MOM) based on certain eligibility criteria.
Employment Pass, also known as EP, is a type of work visa issued to foreign professional employees, managers, and owners/directors of Singapore companies with a minimum salary threshold of S$3,300 per month.
The expats having at least a 30% share in the company that has a minimum paid-up capital of $50,000 is eligible to apply for EntrePass (Entrepreneur Pass).
Employment Pass (EP) and Entrepreneur Pass (EntrePass) are issued for 1-2 years at a time and can be renewed later. Both of these Work visas are eligible to apply for Permanent Resident (PR) in due course. By having either of these two passes, you are allowed to bring your spouse and unmarried children under 21 years to Singapore through Dependant Passes.
Which Business Structure to Choose- Sole-proprietorship or Private Limited Company?
A sole proprietorship is easy to set up and manage. It is the simplest business structure that has only one owner who is responsible for all decisions, assets and liabilities. This type of business is taxed at personal tax rates.
A private limited company is a locally incorporated company where a foreign entity or an individual can have 100% ownership. It enjoys the separate legal entity status and is the most preferred registration option for small to mid-size foreign businesses seeking to mark their presence in Singapore. A private limited company, also known as a subsidiary company, is considered to be a local tax resident and can avail the benefits and incentives that Singapore tax authority has to offer.
In Sole-proprietorship, the owner is personally liable for debts and losses of business whereas, in private limited company members are not personally liable for debts and losses of the company.
Keeping in view the advantages of setting up a private limited company in Singapore, you are advised to choose this type of company formation.
How to kickstart your business in Singapore?
Regardless of its size, every Singapore company has to be registered with the ACRA (Accounting and Corporate Regulatory Authority). The process of company incorporation involves two steps: 1) company name approval and 2) filing of incorporation documents. It takes hardly an hour to get the name approved and the registration could be completed just in a day or 2. All applications must be submitted online using the BizFile system of ACRA.
There are a few minimum requirements for incorporating a private limited company. You must appoint at least 1 resident director, a minimum of 1 or a maximum of 50 shareholders and 1 company secretary. You have to furnish one registered company address (it must be a physical address, not PO Box one). The minimum paid-up capital required for company registration Singapore is S$1. Please note that 1 director and the company secretary must be a Singapore citizen, PR or a holder of Employment Pass or EntrePass or Dependant Pass.
Once registration in done, you are allowed to conduct business activities. The first Annual General Meeting (AGM) of the company must be held within 18 months of the date of company incorporation.
What else should You know before Singapore Business Incorporation?
In a bid to attract more global investors into its land, the Singapore government has rolled out several funding initiatives. These initiatives enable the businesses to gain access to funding in the form of cash grants, government-backed equity financing schemes, business incubator schemes, debt financing schemes, and tax incentives.
You can refer to the websites of Singapore Government such as EDB (Economic Development Board), Standards, Productivity and Innovation Board (SPRING), ACRA, EnterpriseOne, International Enterprise Singapore (IE Singapore) for more details on funding initiatives. Such scheme might help you to add wings to your dream of starting a business in Singapore.