A business-friendly country has a high-quality workforce, an appealing tax regime, efficient and well-maintained transit infrastructure, public safety, and a well-functioning justice system.
Singapore is regarded around the world for having an efficient and competitive tax structure. Companies of all sizes can benefit from low tax rates and a variety of tax relief options.
Singapore’s corporate tax laws are pro-market, and foreign-owned businesses benefit from these tax breaks. Open ownership regulations and little limits on cash movement also help foreign-owned enterprises.
Advantages of Doing Business with Singapore
A number of factors make Singapore an appealing location for establishing your new business. Singapore is consistently ranked as one of the best places in the world to do business.
Singapore’s key competitive advantages for businesses are as follows:
- Low taxes and a business-friendly regulatory framework
- Political system that is stable and free of corruption
- An excellent strategic location
- Top class infrastructure
- Low trade barriers and a favourable attitude toward foreign investment
- Economic emphasis on knowledge-based industries
When it comes to the regulatory environment, Singapore has always been pro-business and pro-enterprise. To encourage private-sector initiatives, red tape is reduced to a bare minimum, and a plethora of grants and assistance are made available.
The government has a number of incentive programmes in place to assist businesses in improving efficiency, strengthening capabilities, and exploring new opportunities. Some programmes are designed for start-ups and local businesses, while others are for global corporations with large-scale needs, such as the establishment of regional/international headquarters in Singapore.
Businesses Opportunities in Singapore
Singapore is widely recognised as a regional economic powerhouse and a centralised hub for businesses looking to enter the Asian market. Despite the fact that the pandemic has had an impact on the country, we are excited about what is to come, particularly in the fastest growing industries, where business opportunities are being accelerated by digitalization.
Here are some of the business opportunities in Singapore that have grown and flourished over the years, as well as some that have traditionally been good opportunities but have declined due to the pandemic’s impact:
Booming Opportunities | Opportunities declined due to Pandemic |
|
|
Setting Up a Company in Singapore
Every legal structure has its own set of advantages and disadvantages. Companies must evaluate their business objectives as well as the duration of their presence in Singapore when deciding what is best for them. Before a corporation decides to establish business in Singapore, certain aspects such as tax concerns, different types of liability, and the scope of activities of each entry option should be carefully examined.
Types of business entities | Definition | Suitability of the legal structure |
Private Company Limited by Shares |
| Most advanced and flexible business entity. |
Public Limited Company | There can be more than fifty stockholders, and the corporation can be large. | Suitable for individuals looking to list shares on the city-capital state’s markets. |
Foreign Subsidiary | A foreign corporation may establish a totally owned Singapore resident subsidiary. This entity will function in the same way as any other Singapore corporation. This Subsidiary would be subject to all local compliance laws. | Setting up a subsidiary would be the best option for international enterprises wishing to establish a long-term presence in Singapore. |
Foreign Company Representative Office | A Representative Office is a temporary structure that allows international companies interested in evaluating the possibility of conducting business in Singapore to do so before making any investment choices. They are not permitted to do business on their own or on behalf of their parent corporation. | A representative is the best alternative for organisations that wish to gather market knowledge before deciding on full-fledged, profit-making activity. |
Foreign Company Branch Office | In Singapore, a foreign firm can open a branch office. To file an online application for the establishment of a branch office, a foreign corporation must hire the services of a Registered Filing Agent. | Businesses aiming to gain market share in the short term might consider establishing a branch office in Singapore. |
Sole Proprietorship | A sole-proprietorship is a business owned by one person. | Low risk business to be run by an individual |
General Partnership | A partnership is a corporate entity made up of at least two partners and as many as twenty. | Professional firms like accountants, lawyers |
Limited Partnership (LP) | A partnership with two or more members, at least one of whom is a General Partner (GP) and the other is a Limited Partner (LP). | Where one partner is ready to bear unlimited risk. |
Limited Liability Partnership (LLP) | LLPs allow business owners to operate as a partnership while limiting their responsibility. It combines the advantages of a partnership with the advantages of a private limited company. | — |
Key considerations for choosing the legal structures:
- Nature of the business
- Number of owners
- Investment Capital
- Risk appetite and liabilities
- Long term plans for the business
Company Registration and Key Requirements in Singapore
- Company name: Approved company name and registered with ACRA
- Director: At least one director must be a Singaporean, a Singapore Permanent Resident, or a holder of an EntrePass.
- Shareholders: Minimum of 1 and a maximum of 50 shareholders
- Registered Local Address: For your company’s office in Singapore, you’ll need a local registered address.
- Company Secretary: Within six months of the firm’s registration date, appoint at least one company secretary.
- Initial Paid-Up Capital: Minimum of S$1 in initial paid-up capital
In order to start a business in Singapore, foreigners must also meet the following requirements.
- Recruit a local director (Singaporean, Permanent Resident, or EntrePass holder)
- Employ the services of a registered filing agent (an accounting business, a law firm, or a corporate secretarial firm) to complete the registration process on their behalf.
Steps to register your business in Singapore
Business Name Registration in Singapore:
- First and foremost, you must choose a company name and have it validated in ACRA (the national agency that registers and controls corporations) by your filing agency. In Singapore, no two businesses can have the same name.
- The legal name of your firm may differ from its trading name. Important to ensure the trading name you choose isn’t infringing on anyone’s copyright or trademark
Choose the business type:
- ACRA will ask you to pick a SSIC code that defines the type of business your company plans to set up.
Assembling your team:
- Shareholders: Individuals and corporations alike can become shareholders. There must be no more than 50 of them who own a private Singaporean corporation. Shares can be held by foreign citizens and businesses as well.
- Directors: A foreigner can only occupy the role of director if there is a second resident director. You could nominate a Nominee Director to solve this situation. The Nominee Director will not be involved in decision-making and will just be present to fulfil the criteria.
- Corporate secretary: This person is required in every firm. The company secretary monitors developments in your organisation, compiles paperwork, and submits reports to the government. The law requires you to select a secretary within six months after incorporation, but you may require one sooner.
- Registering a local address: A registered address is required for any Singaporean firm. It must be a valid address where you get mail on a regular basis.
- Setting up $1 paid-up capital: In the vast majority of circumstances, one Singapore dollar per share is sufficient. Other currencies can be used as paid-up capital. After your firm is formed, you can increase the amount and change the currency at any moment.
- Delegate a filing: You cannot form a firm as a foreigner. The law requires you to employ an approved filing agent – a company that will gather your documents, fill out the necessary forms, and send them to ACRA.
Timeline for registration of business:
A new company’s registration process might take anywhere from a few hours to several days. When dealing with a company secretary, the time limit is mostly decided by how quickly each shareholder and director can give the company secretary personal papers for verification, such as confirmation of identity and residence address.
How Much Does it Cost to Incorporate a Company in Singapore?
- In Singapore, the company formation process is totally computerised and completed using the Accounting and Corporate Regulatory Authority’s BizFile+ platform (ACRA). ACRA levies a S$15 name application cost and a S$300 registration fee for business establishment, for a total administrative fee of S$315.
- Foreigners without a SingPass ID cannot register a corporation on their own since the BizFile+ portal requires a SingPass ID. Instead, they must hire a corporate secretarial firm to complete the task for them.
- Citizens of Singapore with a SingPass ID who are forming a company for the first time may also benefit from such external firm assistance. Most corporate secretarial firms in Singapore charge between S$500 and S$1,500 for incorporation packages, depending on the breadth of services required, while more complicated services may cost more.
General Compliance Requirements:
- Accounting: A Singapore business is expected to keep adequate financial accounts and records of its transactions for a period of at least five years. Because these accounting standards might be complicated (especially for first-time business owners), it is strongly recommended that you use an accredited accounting or bookkeeping firm to help you stay in compliance.
- Tax-Filing Requirements: A Singapore firm must file its yearly returns (including financial statements) with ACRA via the BizFile+ platform unless exempted. This is usually done by the company secretary, and the cost of employing one from a corporate secretarial firm will usually include it. The table below provides a rough estimate of costs of setting up in Singapore what ACRA and corporate secretarial businesses might charge for the services:
Services | Cost |
ACRA name application cost | S$15 |
ACRA registration fee for business establishment | S$300 |
Provision of Registered Office Address | S$110 to S$420 per annum |
Nominee Directorship services | S$1,800 to S$2,000 per annum |
Company Secretary services | S$280 to S$900 per annum |
Setting up of accounting system | S$350 to S$400 (usually a one-time fee) |
Book-keeping | S$250 to S$2,500 per month |
Compilation of financial statements | From S$400 onwards |
ACRA Annual Filing Fee ACRA | S$60 |
Tax- Filing services | S$350 to S$500 per filing |
Preparing papers and resolutions for extraordinary general meetings | S$100 to S$200 per resolution |
Amending company particulars or constitution with ACRA | From S$100 per resolution to be amended |
Share transfers with ACRA | S$150 to S$300 per transaction |
Opening of corporate bank account | From S$100 per account |
Application for employment passes* (For companies intending to bring foreign employees to work in Singapore) | S$990 to S$2,850 per application |
Application for business licences** (For companies in industries which require licences.) | S$400 to S$1,500 per application |
*The Ministry of Manpower may charge an administrative fee of S$105 per employment pass upon submission of the application, and an additional S$225 when the pass is issued.
How Multiplier Can Help With Starting A Business in Singapore
Now you know what factors influence the cost of forming a company in Singapore. Please keep in mind that the prices listed above are only industry averages. So, is it really worth it to incorporate your company?
Working with an external service provider can help you establish your firm flawlessly. However, if you wish to expand your business into a country faster, the best way is to work with a global employment solution partner. We understand setting up local entities in multiple countries isn’t a convenient option for many businesses.
Multiplier you can easily hire and pay your full-time employees and comply with local labor laws. You won’t need to worry about establishing a local entity or have to figure out how to keep abreast with the changing local labor laws. Talk to our experts to know more.