Singapore ranks second in the world when it comes to the ease of doing business, so it is to be expected that the process of starting a company is fairly straightforward in the lion city.
In this guide, we’ll take you through a comprehensive overview of the Singapore company registration process including the documents you need, the amount of startup capital required, and the different types of company structure.
How to Start a Business in Singapore
The Accounting and Corporate Regulatory Authority (ACRA) is the main government body that oversees company registrations in Singapore. It will check whether you are in compliance with all local laws and procedures before granting approval.
Before you get started, you must decide on a company name that is separate and distinct from any other business in Singapore. You can use ACRA’s company search feature for this purpose and submit the application electronically via BizFile+, its online filing and information retrieval system. You can only go ahead with company incorporation once the application is approved.
You can access ACRA’s database here to check whether the name you want is available.
Minimum Requirements to Start a Business in Singapore
The requirements for new businesses in Singapore are as follows:
There has to be a minimum of one and a maximum of 50 shareholders. It is acceptable to have 100% foreign shareholding in the case of private limited companies.
The minimum paid-up capital to start a company is 1 SGD. Companies are allowed to inject additional capital whenever they want.
While both Singapore residents and foreign residents can be directors of a company in Singapore, at least one must be a local resident. This can be a Singaporean citizen, permanent resident, or Entrepass holder.
It is mandatory for companies in Singapore to employ a qualified company secretary within 6 months of incorporation. The secretary must be a resident of Singapore.
- Every new business registered in Singapore must have a local address. This cannot be a PO Box number.
Types of Businesses in Singapore
In this section, we’ll provide an overview of the types of companies you can register in Singapore.
Private Limited Company
A private limited company is one of the most common types of companies registered in Singapore. Such businesses are legal entities that are considered wholly separate and distinct from shareholders and directors. Shareholders of a private limited company are not liable for debts and losses of the firm. What’s more, the shares are not available to the general public and are held privately. A maximum of 50 shareholders are allowed under the Singapore Companies Act; they can be other companies, individuals, or both.
A sole proprietorship is easier to register but carries more risk for the owner. That’s because the owner of the company is personally liable for any debts that the business might incur; creditors have the legal right to go after the owner’s personal assets in the case of default.
Foreign ownership is not allowed for sole proprietorship. Only Singapore citizens, permanent residents, or Entrepass holders are allowed to register a sole proprietorship. Such companies must pay taxes at personal income tax rates and do not get access to tax incentives. It’s harder to raise outside capital and hire staff under such an arrangement.
Limited liability partnerships (LLP)
LLPs combine features of companies and partnerships. The advantages of an LLP is that the legal liability of individual partners is limited in the same vein as a private limited company. There must be at least two partners to set up an LLP and a maximum of 20.
LLPs are usually registered by professional services firms such as attorneys and accountants. Foreign ownership is not allowed in the case of an LLP; the partners must be Singapore citizens, permanent residents, or Entrepass holders.
Procedure to Register a Business in Singapore
Once you have decided on the type of company you wish to register and settled on a name, there are 3 main steps that follow after. First, you must get approval on your chosen name. Then you need to prepare all the documents you need. And finally, you have to formally register with ACRA.
The company registration fee is 300 SGD and the name approval fee is 15 SGD.
Step 1: Company Name Approval
We mentioned earlier about how your company name must not conflict with existing businesses in Singapore, but there are a few additional requirements too. Your chosen name should not be obscene or vulgar and cannot include trademarks. Additionally, if your company name includes business terms such as ‘broker’ or ‘finance’, it might incur extra processing time.
Generally speaking, if everything checks out then the process of name approval should only take a few hours. Once approved, the applicant has up to 120 days to register a company under that name. If they fail to do so, the name can be reserved by someone else.
Step 2: Company Registration Documents
ACRA requires specific documents in order to register your company. These are:
- The company constitution
- Description of business activities
- Signed consent forms for each director
- Signed consent form for the company secretary
- Identification and address details for each shareholder
- Business address
- Paid-up capital information
Step 3: Formal Registration Process
After you are confident that everything is in order, you can go ahead and formally apply with ACRA to set up your company. It should take anywhere between one to three business days for approval but the process could be extended if ACRA requires further vetting.
Additional Information for Foreign Shareholders
Individuals that are not residents of Singapore can also apply to set up a business but are not allowed to initiate the process themselves. Such people or companies must hire a local professional to file on their behalf. It is also recommended to be physically present in the country at the time of filing the application, especially when setting up the bank account.
When your application is approved, ACRA will send you a certificate of incorporation. This document effectively confirms the registration of your new business and includes your business registration number. Certificates of incorporation are usually emailed to the address provided but a hard copy can be requested for an additional fee.
ACRA will also send you a Business Profile (Bizfile) which is essentially the identity card of the company. Now you can open a corporate bank account, apply for business licenses, and register for Goods and Service Tax (GST).