Ready to turn your entrepreneurial vision into reality? Check out the essential steps and expert insights in our comprehensive guide to incorporating and registering a company in Singapore.
These are the essential steps to incorporating a business in Singapore:
- How to start a business in Singapore?
- How long does it take for a business incorporation?
- Choosing the Right Business Structure
- Legal Requirements and Eligibility Criteria
- Company Name Registration and Approval
- Appointment of Directors, Company Secretary, and Key Personnel
- Registered Office and Address Requirements
- Statutory Compliance and Reporting Obligations
- What Happens After Business Incorporation / Moving Forward
How to start a business in Singapore?
To embark on your entrepreneurial journey in Singapore, you should follow these essential steps:
- Choose your preferred business structure: Begin by selecting the most suitable legal structure for your enterprise.
- Complete company registration: Register your company with the Accounting and Corporate Regulatory Authority (ACRA), Singapore’s official regulatory body responsible for overseeing business entities, public accountants, and corporate service providers in the country.
- Set up your corporate bank account: Ensure you set up a dedicated corporate bank account for your business transactions.
How long does it take for a business incorporation?
The timeframe for registering a Singaporean company can fluctuate, ranging from several hours to a few days. The primary factor affecting this timeline, especially when working alongside a company secretary, is the promptness with which each shareholder and director can provide their personal documentation (e.g., proof of identification, residential address) to the company secretary for verification.
Choosing the Right Business Structure
When incorporating a company in Singapore, you have the option to choose from seven different types of companies. It is important to specify the appropriate company type when submitting your company name application.
Private Limited Companies (Pte Ltd)
A private limited company, also known as a Pte Ltd. company, is a separate legal entity from its owners. It offers limited liability protection to shareholders, meaning their personal assets are generally not at risk. It is characterised by having less than 50 shareholders and not having its shares accessible to the public. A private limited company has more regulatory requirements and is subject to stricter compliance rules compared to other business structures. It is the most common structure for start-ups and small to medium-sized enterprises (SMEs).
Sole Proprietorships (SP)
This is a straightforward business as it is owned and operated by a single individual who has complete control over the business. The owner assumes unlimited personal liability for all debts and losses. Apart from Singapore citizens and permanent residents, foreign individuals who hold a Dependant’s Pass, Overseas Networks & Expertise (ONE) Pass, or a Letter of Consent are eligible to register a sole proprietorship in Singapore.
Partnerships
A partnership is formed when two or more individuals (up to 20 partners) come together to run a business. They share the profits, losses, and responsibilities according to the terms of the partnership agreement. Partners can be personally liable for the partnership’s obligations.
Limited Liability Partnerships (LLP)
An LLP combines features of both a partnership and a company. It offers limited liability protection to its partners, meaning their personal assets are not at risk. LLPs must have at least two partners, and they must file annual returns with the Accounting and Corporate Regulatory Authority (ACRA).
Each company type has its own distinct features, requirements, and legal implications. The choice of structure depends on factors such as the nature of the business, the number of owners, liability concerns, tax considerations, and growth plans. Unsure which business structure suits you the best? Get in touch with our professional advisor or company incorporation service to determine the most suitable business structure for your specific needs.
Legal Requirements and Eligibility Criteria
To register a company in Singapore, individuals who are 18 years or older are required to have a minimum of S$1 in paid-up capital, also known as share capital. This initial amount can be increased at any time after the company is incorporated. Additionally, it is necessary to provide a local physical address in Singapore as the registered address of the company.
Company Name Registration and Approval
To legally operate a business in Singapore, it is mandatory to register your business with the Accounting and Corporate Regulatory Authority (ACRA).
When choosing a company name, it is crucial to ensure that it is not already in use and does not contain any prohibited or undesirable words (i.e. vulgar, obscene, or offensive words). You will be also required to specify the activities of your business by selecting the most appropriate Singapore Standard Industrial Classification (SSIC) code.
Once your business name application is approved, you must complete the incorporation process within 120 days from the date of approval.
Appointment of Directors, Company Secretary, and Key Personnel
Prior to submitting your company incorporation application, it is necessary to gather the personal particulars and contact details of the appointed officers. These include:
- NRIC (National Registration Identity Card) and full name
- Nationality
- Contact information (telephone number and email address)
- Residential address
The key officers of a company include:
Company Director:
A company director is responsible for managing the company’s affairs and defining its strategic direction. They must comply with the Companies Act by maintaining accurate records, preparing financial statements (if applicable), and fulfilling corporate filings and disclosures.
Requirements for a company director:
- At least 18 years old
- Legally capable
- Singapore citizen, Singapore permanent resident, EntrePass or employment pass (EP) holder
- Not disqualified from acting as a director (e.g., an undischarged bankrupt) in Singapore or elsewhere
Company Secretary:
Within six months of incorporation, companies must appoint a company secretary to fulfil administrative responsibilities and to keep the company compliant. The company secretary is responsible for various tasks, including maintaining registers and minutes books, preparing minutes of meetings, and ensuring directors and shareholders are aware of their statutory obligations such as filing annual returns.
Requirements for a company secretary:
- Must be a natural person
- Locally reside in Singapore
Do note that the sole director and company secretary cannot be the same person
Auditor (mandatory unless exempted):
Unless the company is exempted from audit (which is common for most start-up companies), an auditor must be appointed within three months of incorporation.
Registered Office and Address Requirements
When applying to incorporate a local company, it is mandatory to provide an office address. This registered office address serves as the official communication point for the company, where all correspondence and notices are directed.
To comply with regulations, all companies must ensure that their registered office address is accessible to the public for at least three hours during ordinary business hours on each business day, excluding Saturdays, Sundays, and public holidays.
This requirement serves two purposes: enabling public communication with the office when necessary and facilitating the delivery of legal documents.
If you intend to run a small-scale business from your residential premises, you may utilise your home address as the office address under the Home Office Scheme. Before submitting your application to incorporate your company, it is necessary to obtain approval under the Home Office Scheme. This ensures compliance with relevant regulations and allows you to use your residential address as the registered office address.
Statutory Compliance and Reporting Obligations
Setting the Financial Year End Date
The financial year end (FYE) of a company marks the conclusion of its accounting period, during which the business completes its accounting cycle. This period provides valuable insights into the ongoing profitability of the company. Throughout the accounting period, transactions are recorded and reported through financial statements.
Selecting the appropriate FYE is crucial for financial reporting and planning purposes, as it sets the timeline for assessing the company’s financial performance and complying with regulatory requirements.
The accounting period can span either 12 months or over 52 weeks.
Annual Filing Requirements
Company directors have legal obligations under the Companies Act, including conducting annual general meetings and submitting annual returns.
Annual General Meeting (AGM)
Unless exempted, it is mandatory to conduct an AGM. AGMs serve as a means to keep stakeholders informed about your company’s financial status and future direction. They provide an opportunity for stakeholders and company officers to engage in meaningful communication at least once a year.
Annual Return Filing
Private companies are required to submit their annual return within 7 months after the financial year end.
Timely filing of the annual return is crucial as it ensures proper and timely disclosure to all stakeholders. It is important to note that all companies, including inactive and dormant ones, are obligated to file annual returns. Even if your company has been exempted by the Inland Revenue Authority of Singapore (IRAS) from filing income tax returns, as long as its status is “live,” the annual return must still be filed with the relevant authorities.
What Happens After Business Incorporation / Moving Forward
After incorporating your business, several important steps follow:
- Certificate of Incorporation: ACRA will send you an email notification confirming the registration of your company, along with the official Singapore Company Incorporation Certificate. This certificate includes your business registration number. If you require a physical copy, you can request one online from ACRA for a fee of S$50.
- Business Profile (BizFile): ACRA will provide you with a complimentary business profile for your new company. The business profile serves as the company’s identity card.
- Opening a Corporate Bank Account: Once your company is registered, you can proceed to open a corporate bank account. For more detailed information, refer to our concise guide on how to open a Singapore bank account.
- Business License Application: Depending on the nature of your business activities, you may need to apply for specific business licenses. This process is typically completed after registering your company but before commencing business operations. For an overview of the most common licenses in Singapore, consult our comprehensive guide.
- Goods and Services Tax (GST) Registration: If your business is projected to have an annual turnover exceeding S$1 million, you must register for Goods and Services Tax (GST). GST, also known as value-added tax (VAT) in many countries, is not mandatory if your annual turnovers are not expected to reach S$1 million. It is important to assess your business’s turnover and obligations accordingly.
Don’t let paperwork and legal procedures overwhelm you. Our dedicated experts are here to streamline your business incorporation process in Singapore. Contact us today and take the first step towards your entrepreneurial journey, pricing starting from $415!
