Setting up Business in Singapore
Entrepreneurs love to try innovative business ideas in Singapore. It is currently 2nd best place in the world that they consider to set up a new company. Singapore is a highly developed market. It’s per capita GDP is higher than a number of developed countries. The business owners opt for the business incorporation in Singapore because of the ‘Ease of Doing a Business’ in this country.
Why Entrepreneurs Opt for Singapore Business Incorporation?
Its simple legal formalities and simple Singapore business incorporation procedure attract entrepreneurs. In addition to that, the government has implemented various schemes for new startups and is developing new infrastructure for the development of the country.
Under the startup tax exemption scheme, the new local businesses in Singapore can claim tax exemption for the first 3 consecutive YA. They can claim:
- 75% tax exemption on their first S$100,000 normal chargeable income
- 50% tax exemption on, their next S$200,000
Singapore levies no capital gain tax. It means, Singapore companies, after paying their company tax, can distribute tax-free dividends to their shareholders. It is one of the reasons why Singapore continues to attract Foreign Direct Investment (FDI). In the Q3 of 2020, during COVID-19 disruption, it attracted $15billions in FDI.
The professionals, business owners, & investors favour Singapore for its low tax regime.
- Singapore personal tax rates are progressive and range from 0%-22%
- The corporate income tax ranges from 0%-17%
- Due to the tax benefits offered, the majority of Singapore companies pay effective tax in the range of 8.5%-9.5%
Pre-Incorporation Requirements for Your Singapore Company
In Singapore, you can register a Sole Proprietorship, Limited Liability Partnership, or a Private Limited company (Pte Ltd). Majority of business owners choose to incorporate Pte Ltd.
Pte Ltd has separate existence and credibility. It can easily raise funds for its expansion. Most importantly, it limits its shareholders’ liability to their investment in its shares. Their personal property is not used to pay for the company’s debts or losses.
Before you opt for business incorporation in Singapore, you should be ready with:
- Minimum initial paid-up capital of S$1
- At least one shareholder (maximum of 50 individuals or companies)
- At least one local or resident director
- At least one company secretary
- registered local office address
Procedure for Business Incorporation Singapore
Singapore company registration procedure is easy and online. It can be initiated on ACRA’s e-portal BizFile+. It is easy for the Singapore residents as they can visit the portal using their Singapore ID.
If you are a foreigner, you need to hire a reputed provider of Singapore business incorporation services. You need to complete only two steps:
- Get company name approved from ACRA
- Apply to ACRA for the registration of your company
You need to be careful in choosing the name for your proposed company. It should not be vulgar, black-listed, reserved for someone, or identical to any existing company in Singapore. ACRA, the Company Registrar, has the right to reject such names. And, then, you will have started the process all over again.
Appoint a Registered Filing Agent
- Submit a list of 3-5 names to your provider
- Their experts will check to register the available company name
- Submit all your incorporation documents to the provider
- They will apply to ACRA to set up your company on BizFile+
ACRA takes about 1-3 days to process the application. If it gets referred to higher authorities, the approval may take up to 2 months.
- ACRA charges S$15 for registering the company name for your use
- ACRA charges S$300 for Singapore business incorporation
Singapore Work Visas/Passes
Singapore government offers a range of work visas/passes to the individuals who want to work in Singapore. Without these documents, you cannot work in Singapore. Depending on your situation, your company secretary can apply to the MOM for an employment pass, entrepreneur pass (EntrePass) or Tech Pass for you.
Foreigners who wish to start their business in Singapore have two kinds of visa options. The employment pass is a work visa for foreign corporate management. It is used for relocating the staff to Singapore. If you do not want to work in Singapore, you do not need any pass.
The employment pass is given to qualified and certified professionals. If you do not have paper qualifications, you will not be able to get this pass. However, if you have a long entrepreneurial or investment track record, you can go for EntrePass. You can also apply for Tech Pass if you fit the bill.
Why MNCs & SMEs Come to Singapore?
By establishing their international or regional HQ here, companies benefit from Singapore’s network of more than 60 comprehensive Double Taxation Avoidance Agreements. They also benefit from Singapore’s many free trade agreements and the Investment Guarantee Agreements during cross-border trading.
After setting up your company, check if you need any business licenses or permits. Singapore government offers industry-specific business licenses. Apply, pay the required fees, and acquire them before starting your business activities.
Singapore has strict laws for protecting intellectual property. You can rely on these to protect your creative business ideas Singapore from copycats.
An upcoming entrepreneur can start a new company to be active in electronic, manufacturing, FinTech, apparels, healthcare, pharmaceutical, E-commerce, real estate, entertainment, restaurant, hotel, catering, Etc. The sky is the only limit.
SBS Consulting is a registered filing agent in Singapore. If you have questions related to Singapore business incorporation, contact us on +65-6536 0036 or email us at firstname.lastname@example.org for expert assistance.