Singapore Business Registration for Local Entrepreneurs
Singapore business registration for the local entrepreneurs is easier than it is for foreign entities. A local entrepreneur does not need a work pass or to appoint a local nominee director. According to the Singapore Companies Act, Chapter 50, any person whether it is a foreigner or a local, above the age of 18 years can incorporate business in Singapore.
Business Structures in Singapore
The rules and regulation set by the Singapore government for the foreign entrepreneurs is quite liberal and open than any other nation. The general guidelines are the same for both the individuals. The company incorporation for local residents in Singapore is a bit easier. They can use the following business structures to set up a company in Singapore.
A local entrepreneur needs to register a sole proprietorship with Accounting and Regulatory Authority (ACRA) of Singapore. It takes ACRA only 15 minutes to verify the application and register the new business firm.
- The owner of the Sole Proprietorship has the full control
- He can take quick decisions
- The Sole Proprietorship has no legal existence from its owner
- The owner is responsible for the losses and debts of a Sole Proprietorship
- The owner pays personal income tax on the income generated by his sole proprietorship
Limited Liability Partnership (LLP)
A group of 2 or more individuals or corporates can come together and register a limited liability partnership in Singapore and start their business activities. An LLP reduces the liabilities of the partners to some extent.
- It requires minimum of 2 partners to form an LLP
- A partner pays for the LLP’s losses or the debts occurred due to his or her own negligence, mistake, action or the inaction.
- It is required for an LLP to file its financial statements on annual basis
- The individual partners pay personal income taxes on the income received from the LLP
- A corporate that is a partner in an LLP pays corporate income tax on the income received from it
- An LLP needs to appoint at least one Singapore resident manager
Private Limited Company
This business structure really protects the personal assets of its owners or shareholder. Their liabilities are limited to the capital they have invested in the shares of the company. Most of the entrepreneurs prefer to register a private limited company for its scalability and robustness.
- A private limited company has a legal identity and the rights of a natural person
- The number of its shareholders ranges from 1-50
- A corporate can be its sole owner by owning 100% of its shares
- A private limited company has perpetual existence.
- Like a natural person, a private limited company can buy real estate and property for its use
- The company is responsible for its losses and debts accruing because of its business activities
- Its liability is discharged by using its property
- Shareholders can recover their capital invested in the company by selling their shares.
- A private limited company can easily raise capital for its expansion by selling shares to the investors.
Exempt Private Company (EPC)
- The business structure of an EPC is based on that of Limited Liability Company
- Its features are very similar to the private limited company
- The number of its shareholders, though, is restricted to between 1- 20
- The benefit of incorporating an EPC is that these companies are exempted from audit requirements if their annual turnover is less than S$5 million.
Features of Local Singapore Company Registration
- Pick a Unique Company Name: You need to choose a unique name for your company and get it approved by ACRA before the registration of the company can occur. The name has to be decent and must not infringe any copyright law.
- Paid-up Capital: The minimum initial paid-up capital required at the time of incorporation is S$1. The amount of capital can be increased at any time after the completion of Singapore company registration process.
- Get a Registered Physical Address: You have to enter a local address for the company’s office on the application form. It is mandatory for the business owner. The address cannot be a PO Box address. Being a local resident, you can easily produce a physical address for your business formation.
- Appointment of a local director: It is mandatory for a company to appoint a local resident director (who is a Singapore citizen, Singapore permanent resident, or, the Employee or Depended pass holder). The individual must be above the age of 18 years. A Singapore company can appoint as many directors as it wants.
- Shareholders:The shareholders are the owners of the company. Minimum of one and maximum of 50 shareholders can form a private limited company in Singapore. A shareholder can also act as the director of the company. A shareholder can be a person, company, or a trust.
- Company Secretary: Every company must appoint a professional company secretary within the 6 months of its incorporation. As per Singapore Companies Act, a sole director, and shareholder cannot hold this position. The company secretary must be a local resident of Singapore. The company secretary has the charge of all the statutory books and registers of the company. The individual is responsible for informing all directors and shareholders about the due dates for ACRA filling.
Favorable Tax structure
The income earned outside of Singapore is not subjected to the Singapore taxes, subject to certain conditions. The dividend earned is capital gained and is not taxed. By registering for the Goods and Services Tax (GST), a Singapore Company can claim the refund on its input tax.
There are certain post-registration formalities to be completed by the company owner;
- Obtain certificate of Company Incorporation
- Order Company Seal and Stamps
- Open a corporate bank account
- Applying for the business licenses and permits
- Apply for CPF Submission Number (CSN) and CPF Payment Code
- Use CPF e-Submit@web to know your CPF contribution details
Singapore is one of the neatest cities in the world and offers the best living conditions in Asia. It offers excellent health care system, education system, and high-class housing facilities. Singapore is a safe country to live in because of its very low crime rate.