The World Bank report that came six years ago marks Singapore on the top place as the easiest place to do business. Ever since Singapore has never left the spot as it allows business owners to set-up their business smoothly and without any fuss. The reason why business owners prefer to set up companies in Singapore is due to its easy ways to fill taxes along with adaptable immigration policy along with laws that are suitable to do business.
The efficient steps to set up a company in Singapore as given as under:-
1. Fulfil the Mandatory Requirements to set up a Private Limited Company in Singapore:
Any adult (above 18 years of age) with no history of legal offences can establish their business in Singapore. Such individuals should ensure that they have the following-
- Local Director: You’ll require a local director who resides in Singapore and is willing to self-register your company in the country.
- Name the Company: Accounting & Corporate Regulatory Authority (ACRA’s) online portal Bizfile provides the access to register the unique name of your company.
- Shareholders: It is compulsory for every company to have at least 1 shareholder and at the most 50 shareholders.
- Local Company Secretary: Foreigners who set up their company in Singapore should appoint at least 1 company secretary residing in Singapore in the time duration of six months from the date of registering their company.
- Capital: In order to open a company in Singapore, you will require an initial paid-up capital of at least S$1.
- Local Address: When you run your physical office in Singapore, you need to register its address.
2. Determine the Type of Your Business:
One should not rush into starting up one’s business before specifying its type that matches with one’s business. According to ACRA, one can differentiate one’s business and establish them in the following types:-
- Private Limited Company (Pte Ltd)- In terms of this type of company, organisations enjoy corporate tax benefits but the Company Incorporation and Administration Costs are higher. Moreover, the liability of the shareholders might be minimal but everyone has to follow a strict code of conduct. There might be a lot of ease in the procedure of establishing one’s business in Singapore but the employee termination process is a little complicated. In order to keep the company running, there is perpetual succession but the compliance requirements are very rigid.
- Sole Proprietorship- In terms of registering as a sole proprietor, business owners can do so at a minimal cost as well as quickly but their liabilities are unlimited. In addition to that, the founder holds the right to make all decisions in the business and it can also be managed smoothly. There is an absence of perpetual succession. This type of organisation has little to no compliance requirements but raising the capital to establish it can become difficult. In fact, the employee termination process is also very simple. As a sole proprietor, one has to renew the registration at the end of the year. A sole proprietor does not enjoy tax benefits because the revenue is charged at personal income tax rates.
- Limited Liability Partnership (LLP): In a company registered under LLP, the owner enjoys a separate legal identity but at least 2 partners are required all the time. The liability of the partners also comes down to a minimum however, the procedure of transfer of ownership and investment can be complicated. The compliance requirements of the company are neither too many nor too much. The different types of corporate tax benefits are not present in LLP.
3. A Bank Account:
after you’ve specified your type of business as well as fulfilled the mandatory requirements, all you have to do is open a bank account. Foreigners are free to choose to set up their accounts in any of the local banks or even international banks in the domain of Singapore.
4. Post Registration Requirements:
You have established your business and specified its type, as well as your bank account, is set. The next step is like a nitty-gritty requirement to establish your business which involves-
- Permissions: Some businesses need to have approvals from government officials like childcare centers, video companies, wholesalers, retailers of liquor, etc.
- Work Timings: Along with your local address, work timings (with a minimum of as low as three hours per weekday) should be specified for documentation as well as for ease when the clients should contact you
- Registration Number: The approved Registration Number given by ACRA should be on all your official papers just like your logo.
- Customs Registration and Goods and Services Registration (GST): In terms of import and export business, your company must be registered with Singapore customs. While for the supply of goods and services within the country as well as import of goods into Singapore, GST will be levied if the annual taxable revenue exceeds S$1 million every year.
- Central Provident Fund (CPF): All organizations are required to have The Central Provident Fund. In this pension fund scheme, the employer, as well as the employees, contribute a percentage of their monthly income.
As a person from the outside, it might seem daunting to establish one’s business in Singapore. However, with the helping hand of Bestar, all the incorporations will seem as light as a feather. All you need is to provide us with all the essential documents and we’ll take it from there. Let’s talk today to start your business quickly!