Singapore’s position as a global business hub is well-established, making it an attractive destination for entrepreneurs. Known for its efficient regulatory environment, competitive tax incentives, and strategic location, Singapore simplifies the process of company formation. This guide delves into every aspect of setting up a company in Singapore, ensuring entrepreneurs are well-equipped to begin their business journey.
Why Form a Company in Singapore?
Strategic Global Position
Located at the heart of Southeast Asia, Singapore serves as a gateway to the Asian markets, offering businesses vast growth opportunities in the region.
Pro-Business Climate
Singapore is celebrated for its robust economy, stable political environment, and policies that promote entrepreneurship, consistently ranking highly in global ease of doing business indexes.
Favorable Tax System
Entrepreneurs benefit from one of the lowest corporate tax rates in the world, capped at 17%, alongside various exemptions and incentives, particularly for new startups.
World-Class Infrastructure
Singapore provides state-of-the-art infrastructure and connectivity, both physical and digital, facilitating efficient business operations and global trade.
Pre-Formation Planning
Decide on a Business Structure
The Private Limited Company is the most popular choice among foreign and local entrepreneurs due to its credibility and limited liability to shareholders.
Select a Company Name
Choose a unique name that complies with the guidelines provided by the Accounting and Corporate Regulatory Authority (ACRA) and is not similar to existing entities.
Define Business Activities
Clearly outline your business activities, as this will determine the specific licenses and permits required and influence your tax obligations.
Determine Shareholders and Directors
You will need at least one shareholder and one local resident director to comply with Singaporean law. The director must either be a Singapore citizen, permanent resident, or a holder of a valid employment pass.
Prepare Necessary Documentation
Gather all required documents such as the company constitution, identification details of directors and shareholders, and proof of address for the registered office in Singapore.
The Formation Process
Step 1: Company Name Registration
Register your company name with ACRA through the BizFile+ portal. This step is typically quick, provided the name does not require additional vetting.
Step 2: Submit Incorporation Documents
Once the name is approved, submit the incorporation documents to ACRA, including:
- Company Constitution
- Details of shareholders and directors
- Registered office address
- Description of business activities
Step 3: Register with ACRA
Complete the registration process through BizFile+. If your documentation is in order, the incorporation can often be finalized within hours.
Step 4: Post-Formation Requirements
After the company is legally established, undertake the following:
- Open a corporate bank account.
- Apply for the necessary business licenses and permits.
- Register for Goods and Services Tax (GST) if expected turnover exceeds S$1 million annually.
Compliance and Ongoing Management
Annual Compliance
Maintain regular compliance with ACRA by holding annual general meetings, filing annual returns, and ensuring accurate financial records are kept.
Tax Obligations
File corporate tax returns annually with the Inland Revenue Authority of Singapore (IRAS). Consider hiring a tax advisor to manage your filings and optimize tax liabilities.
Regular Monitoring
Stay informed of any changes in legislation that might affect your business operations or compliance status in Singapore.
Conclusion
Forming a company in Singapore can open doors to lucrative business opportunities in Asia and beyond. By following the detailed steps outlined in this guide and staying vigilant about compliance requirements, entrepreneurs can leverage Singapore’s dynamic economic landscape for business success. Engaging with local experts and utilizing government resources can also provide valuable support throughout the process of setting up and running your new business in Singapore.
