Singapore ranks 2nd among the world’s best nations to do business. Open-source data from the Department of Statistics official site indicates a steady increase in the number of new company formations here from 2015 to 2022, soaring between 61000 and 65000 every year. The score was 64304 in 2022. Since this upheaval, there has been no looking back for individuals and groups willing to form new companies.
But incorporating a company in Singapore can be challenging. So, here are the steps that can help you demystify the procedure and form a brand-new company without going through any hassle.
Meet the Key Requirements for Company Formation in Singapore
The key requirements for company formation in Singapore include the following:
- Apply and Get Company Name Approval from ACRA
Come up with three to five names and check for their availability. For quick approval of your company name, make sure to:
- It is unique and hints at the type of business.
- It does not violate trademarks or copyrights
- It does not contain obscene or vulgar words.
- It is not identical to any other existing company name.
Approved company names are valid for 60 days. However, you can apply for an extension of this period to ACRA.
- Choose Shareholder Structure
Any corporate entity or individual can become a shareholder by buying or subscribing to the company shares. Company incorporation in Singapore requires at least one individual or corporate shareholder.
The director and shareholders can be the same or different individuals. As per the Singapore Companies Act, 100% foreign or local shareholding is permissible. The act also allows at least one and at most 50 shareholders for a Private Limited Company formation in Singapore. Also, details of the shareholders are likely to appear in the public records.
- Local Directors
A company in Singapore should have at least one local director or an ordinary, permanent resident of Singapore holding an EntrePass or Employment Pass with a residential address in Singapore.
No restrictions exist on the number of additional foreign or local directors a Singapore company can appoint. But it is crucial for the director to be at least 18 years of age, and they should not be convicted of criminal malpractice or bankruptcy. Company shareholders can also be directors and vice versa, with their details appearing in public records.
- Company Secretary
All new companies forming in Singapore should appoint a qualified and competent company secretary to ensure all regulatory compliance. The company secretary can be an ordinary Singaporean. As per the Singapore Companies Act, companies must appoint their company secretaries within 6 months of formation.
- Paid-Up or Share Capital
The minimum share or paid-up capital to register a company in Singapore is S$1 or equivalent in almost any currency. The minimum capital issue is one share of par value. On that note, you cannot use any par value or bearer shares. However, you can increase paid-up or share capital after company incorporation in Singapore.
- Registered Address
All companies in Singapore should have a registered workspace or office to which all official documents and notices may be delivered and at which the companies can maintain different registers under the law. This registered office address should be a physical address, not a PO Box. You can also use a residential address, but only if the nature of your business allows it.
- Administer Governance Structure
The constitutional documents of a company in Singapore, mainly the Articles of Association and Memorandum of Association, administer the company governance structure and the inter-relation between the shareholders and the company.
On that note, as of 1/1/2016, the articles and memorandum of the association have been combined and are now considered a single document is known as the “Constitution.” All existing companies formed before this date don’t need to combine the documents. They can simply continue operating with their present articles and memorandum of association.
- Get All Documents for Company Incorporation in Place
The documents you must submit at the time of company incorporation in Singapore include the following:
- Description of your business activities
- Approved company name
- Registered local address
- Certificate of Incorporation and Memorandum & Articles of Association ( this applies to foreign companies)
- Particulars of a company secretary, directors, and shareholders
- Singapore identity card if you are from Singapore.
- Consider the Timeline
If you provide all the documents first-hand and all-important details as requested, this may prevent any kind of delay in compliance approval. Note that you may have to present additional documents as requested by the compliance team for further company verification. The typical procedure of company name reservation in Singapore takes around 20 minutes.
You may face three possible outcomes: approval, rejection, or referral. Your company name may be rejected if it is too similar to any existing company name or trademark. Also, your application may be referred to the relevant approval authority if your company name is sensitive or includes references to regulated industries, like nutrition, school, or media. Approval in this situation may take something between 7 days to 2 months.
- Obtaining the Certificate of Good Standing
To know when your Singapore Company has been incorporated, you need the Certificate of Good Standing. This certificate proves the existence of registered companies in Singapore and that they still live on the ACRA Corporate Register. The certificate features an electronic signature of the ACRA Assistant Registrar and is available only for companies. The certificate includes the company name, status, incorporation date, and activities.
Procedures to Follow Post Company Incorporation
Once you complete all the procedures correctly, you are legally authorized to operate your business officially in Singapore. Some extra things to do post-company incorporation include:
- Open a corporate bank account.
- Apply for business licenses, like law and medicine.
- Register for Singapore GST or Goods and Services Tax.
- Place your ACRA registration number on all invoices, official collateral, and letterheads.
- Register with Singapore Customs if you are an exporter or importer.
- Apply for Singapore work visas that you or your international team members may require.
- Stay compliant with ACRA.
Company incorporation in Singapore is a solid choice when trying to base yourself. A strong workforce, stable economy, and business-friendly tax laws will help you get up and running smoothly and quickly. This way, you can spend less time in administration and more time growing your business.