Singapore Tax Rates and Tax System
Singapore Tax Rates and Tax System Singapore is known internationally for its practical and fair taxation system that lets individual entrepreneurs and large companies enjoy
Setting up a company is such a fantastic idea. The thought of owning a company is both exciting and scary. While you have your eyes on the goal, you can’t help but think about the “what if’s” and the challenges. If you’re looking for a step-by-step to set up a company in Singapore, this article will guide you. You’ll learn seven critical steps to running your business in Singapore – from the company registration to the type of business.
Singapore has been ranking high for the ease of doing business in every international study or report globally. Besides its commercial-friendly regulatory environment and a politically stable economy, the efficiency of the country’s government system allows you to set up your company within a day itself. However, of course, some preparation works need to finishing beforehand. This guide will help you understand the steps to set up a company in Singapore by breaking it into seven layers.
Singapore occupies a unique position in the global economy and plays a critical role as a business hub in Asia. Doing business in Singapore offers excellent opportunities, however, you need to deal with a corporate regulatory authority at every turn if you plan to start a Singapore company. In this country, it’s easier and faster to register a corporation than many other nations regarded business centers, due to factors like:
Entrepreneur-friendly government structure.
Access to local talent.
An easy company registration process.
This might range from a few hours to several days to get your Singapore company going. When dealing with a company secretary, the timeline is mainly decided by how quickly each shareholder and director can deliver their papers for verification. The Company Registrar is the Accounting & Corporate Regulatory Authority (ACRA), as it oversees the Singapore company registration procedure.
Essential Requirements to Set Up Singapore Companies
If you are unsure what documents or information you need to set up Singapore companies, this checklist will help.
A registered company name with ACRA
A director who is a citizen of Singapore or is a permanent resident
At least a company secretary
A local registered address
An initial paid-up capital of S$1
Others include a brief description of activities, the SSIC Code, and your Singapore company constitution.
It is technically impossible to set up the business entity yourself without help. Choosing the right partner with the right experience to handhold you along the way is not only essential but critical in the long run for the stability of your Singapore company.
A professional services firm with the right capability is a must-have asset and is unavoidable. Such a provider ensures you stay compliant with the Singapore regulatory system. Still, they also act as the first line of defense, helping you navigate through pitfalls in your initial stage of establishment and progress.
Why Hire a Professional Service Provider?
Singapore’s fast-growing economy is like a paradise for start-ups and big firms looking to expand. The country has a competitive business climate where a lot of money may be made with little effort. A professional service provider comes in various shapes and sizes, depending on their expertise and offerings. Their primary function is to give business support services to other firms, whether in tax accounting, company incorporation, or law, using specialized knowledge and experience, best practices, and technology to help customers and business partners. So Singapore companies save money and time by employing a skilled corporate service provider in Singapore for challenges regarding business activities.
Step 2 – Identify the services you need for the first year.
With reference to the “requirements to set up a company in Singapore,” you will be able to identify what is required of you to set up the business entity. Identify a service provider that best suits your needs and outsource the relevant scope.
This is usually interim if planned carefully, or at least until your business stabilizes and more resources are recruited in-house. The standard services usually outsourced are a company secretary’s appointment, Registered Address, Nominee Directorship, and Incorporation services to set up your Singapore company.
Besides the fact that this procedure is mandatory, it is imperative to go through this process as it allows your service provider to understand your business structure more in-depth. An actual due diligence record will be created and filed under the company profile. This will act as a future reference for potential investors when they seek clarity on the company’s background and shareholder structure.
This procedure’s complexity depends on how complex your company structure is. Still, with proper guidance by the right service provider, you can avoid tons of unnecessary frustration and time-wasting to get things in place.
The Singapore government has a system to detect and deter illegal money laundering through its financial markets. Financial institutions and business service providers examine their controls and parameters in seeing suspicious activities through procedures like the client due diligence process. Singapore’s efficient anti-money laundering and counter-terrorism financing policy relies heavily on client due diligence.
It safeguards the financial and economic integrity of enterprises and financial organizations. Institutions that do not do due diligence are at the risk of money laundering, terrorism financing, or corruption. Moreover, this procedure is followed for new clients and existing clients to ensure that records are current and relevant. Therefore, due diligence examinations are necessary for all clients of corporate service providers.
Passport or NRIC of individuals
Utility bills, bank statements of individuals
Details of the company’s business and ownership structure
Past and present financial statements
These documents, along with information from other regulated individuals, aid in verifying the client’s identity, ownership, and control structure, as required by law.
Choosing the right business name is more important than one can even imagine. You would want to go with something unique yet relevant to your core business focus.
Commonly one should consider having at least three alternative names if the preferred choice is unavailable. Each should have some level of difference compared to the other; if not, getting the 2nd or 3rd choice approved is unlikely if the first is rejected. We can help submit your choice of names for availability checks online with ACRA and make a reservation to secure your preferred name before we kick start the actual incorporation application process.
There are a few factors you need to be aware of when registering the name of your Singapore company:
The name must be completely different from others under ACRA’s registry.
The company name cannot seem rude or obscene.
The company name cannot infringe any trademarks that are legally registered.
The company name must not be reserved.
Approval is usually done within an hour if the name is available. If preferred, you can reserve more than one name; the unused name will expire automatically once the reservation timeline is up.
There are exceptions depending on the type of business you will be operating in Singapore.
For example, if you have the intention to set up a partnership such as a law firm, the business name should end with “limited liability partnership” or “partnership.” Or, if you focus on the medical or professional accountancy field, it will likely take a longer time for ACRA to make sure you are a legitimate practitioner in your area.
There is a charge per name reserved; find out more from the appointed service provider you are working with.
Once you’ve come up with a good name for your company, check BizFile+ to see whether it’s available. In doing so, check for terms similar to existing companies, names that are not appropriate or contain offensive or explicit words, and those banned by the Minister of Finance.
Step 5 – Ensure you have all the proper documents in place
The appointed service provider will prepare the following documents for your review and signatory. These documents form part of your Corporate Secretarial file that will be maintained by the company secretary that you have appointed.
Some of the documents required include the following:
A Consent to Act form, signed by all directors of the company.
A Consent to Act form. Signed by the appointed Company Secretary.
A Company Constitution. This document can be tailored to meet your needs. Otherwise, the common practice is to adopt the template provided by the registrar of Singapore.
A board resolution for the appointment of the company secretary and the director(s) of the company.
Proof of address document for all key officers and shareholders of your company.
Anti-money laundering client due diligence document/file is done and managed by the appointed service provider.
These must be prepared in advance before the actual application to set up the Singapore entity or formal company registration.
Step 6 – Incorporate Your Singapore Company with a Corporate Regulatory Authority – ACRA
This is where the appointed service provider will completely take over the process. Based on the information and supporting data and documents you have provided, the appointed service provider will apply to incorporate your Singapore company online on the ACRA portal.
Depending well the initial prep work is done, this should be a reasonably quick process. Upon submission, and if there is no further query from the authorities regarding what is submitted, the entity will be ready within the hour.
If there are additional questions regarding the submission, this may take a few days to up to a few months to clear, depending on the situation’s complexity. Otherwise, you will receive the electronic copy of the official Bizfile of the registered entity, including crucial information like the UEN number, which is also the tax ID of the business entity.
Appoint who will be the bank signatory to manage the bank account. This individual will likely be the sole manager of the bank account. There can be more than one bank signatory, and you can set multiple approvals/signatures required based on your preferred tier of funds movement within the organization. For example, any amount above S$100,000 requires at least two approvals/signatures before the execution of the request.
Next, decide what type of currencies your company will likely deal with on top of the default Singapore dollar bank account. You can open up more than one bank account, provided the bank is happy with what they see in your application form and the KYC result. Yes, there is another KYC procedure here when setting up the bank account.
Still, not to worry; you will have most of the data and supporting documents readily in place. This is very similar to that exercise conducted by the appointed service provider. Completing this procedure for your business in Singapore is possible remotely these days, and you need not be physically here to kick start the process.
Still, you may be required to provide additional information or documents to get clearance from the bank’s compliance team before they agree to onboard you as a client. Once that is cleared, it will take any time from 2 to 4 weeks to get the bank operationally ready and functional. All approvals are under the sole discretion of the bank you work with.
There are numerous possibilities when it comes to opening a corporate bank account in Singapore. Multi-currency accounts, internet banking, credit cards, trade financing, flexibility to move funds across nations, and other appealing features are available from most Singapore banks. Opening this type of bank account is a pretty basic and straightforward process.
However, it is critical to examine the components of various banks’ corporate accounts to choose the bank that best meets your company incorporation demands.
Completed Corporate Account Opening Forms signed by authorized signatories.
Directors’ Committee Resolution authorizing the account’s opening and the account’s signatories. The company secretary arranges this.
Certified True Copy of Resolution authorizing the account’s opening.
Copy of Company’s Incorporation. This is either certified by one of the directors or the company secretary.
Certified copy of the Company’s Business Profile from the company registrar.
Copy of the Company’s Memo and Articles of Association (MAA).
Copies of passport and residential address of the directors, beneficiary owners, and signatories.
If you reside in Singapore, you can come along with the original documents so that the bank can make a copy.
If you are a foreigner interested in setting up a local company in Singapore, you need to consider the following:
You need to hire a professional to file your Singapore business registration on your behalf. Self-registration of a foreign individual or organization is not permitted.
You do not need to seek a special travel visa to incorporate your Singapore firm but do not intend to relocate. You can run your business from anywhere globally and visit Singapore.
Even if no one from your company plans to relocate to Singapore, you must still meet the requirement of having a local director.
To open a business bank account, you may need to travel. Many banks demand the actual presence of directors and shareholders to approve creating a bank account in Singapore, depending on the bank you choose.
If you want to relocate to Singapore for company registration, you have two options – Private Limited Company + Employment Pass or Private Limited Company + EntrePass. However, if you don’t intend to relocate but want to operate it from outside, you have the option of Private Limited Company + Resident Director.
Here’s a summary of what we have discussed above for your easy reference. For simplicity, we will use Singapore Business Consultants (SBC) as your service provider as an example.
Appoint a professional service provider for at least an hour to make direct contact, interact with a few providers, and find the one that best suits you. One main point of consideration will be the provider’s capability to handhold you through the company registration process.
Identify what services you need for the first year of business in Singapore and what services you need concerning the requirements to set up a company in Singapore.
Complete CDD client and SBC at least an hour and provide all information and supporting documents requested by the SBC to complete this step.
Get your company name reserved. SBC can help provide your preferred name with additional alternatives just in case. SBC will make the reservation if any of the names are available.
Ensure you have all the correct documents in place. This can is manageable remotely, whereby SBC will prepare all relevant documents required for submission for the application to set up your Singapore company.
Incorporate your Singapore company with ACRA. You will be issued a Certificate of Incorporation, your tax ID (UEN), and a Business Profile by ACRA.
Opening the corporate bank will assist in connecting you with our banker contacts and provide the relevant documents that were made available to us during the CDD exercise.
|Step 1||Appoint a professional service provider||Client||At least an hour||Make direct contact and interaction with a few providers and find the one the best suit you. One main point of consideration will be the capability of the provider to handhold you along the way.|
|Step 2||Identify what services you need for the first year||Client and SBC||1 hour||Identify what services you need with reference to the requirements to setup a company in Singapore. SBC can advise|
|Step 3||Complete CDD||Client and SBC||At least an hour||Provide all information and supporting documents requested by the SBC in order to complete this step.|
|Step 4||Get your company name reserved||SBC||30 mins||Provide your preferred name with additional alternatives just in case. SBC will make the reservation if any of the name is available.|
|Step 5||Ensure you have all the right documents in place.||Client and SBC||30 minutes||This can be managed remotely whereby SBC will prepare all relevant documents required for submission for the application to setup your Singapore company..|
|Step 6||Incorporate your Singapore company with ACRA.||SBC||1 hour||Upon incorporation, you will be issued a Certificate of Incorporation, your tax ID (UEN) and a Business Profile by ACRA.|
|Step 7||Opening of the corporate bank account||Client and SBC||1 day||SBC will assist to connect you with our banker contacts and provide the relevant documents that was made available to us during the CDD exercise.|
Setting up a business and going through the company registration procedure might sound like a hassle, but it’s a good idea. When determining where to base yourself, incorporating in Singapore is a good option. A stable economy, solid labor markets, and business-friendly tax rules allow you to get up and run faster, spending less time wrapped in paperwork and more time expanding your company. The procedure seems complex, but it can be manageable if you work with the right provider. Every step impacts the next, and hence it is essential that you trust and corporate with the service provider you have appointed. This exercise can be simple when guided by experienced hands. Make that call and reach out to us today @ firstname.lastname@example.org.
Singapore Tax Rates and Tax System Singapore is known internationally for its practical and fair taxation system that lets individual entrepreneurs and large companies enjoy
Singapore Corporate Tax Rate, Exemptions, Filing Requirements – Complete Guide Singapore is one of the leading destinations for entrepreneurs. The country provides numerous incentives and
Setting up a Tech Startup in Singapore? Here’s All That You Need to Know Image source: Unsplash https://unsplash.com/photos/QckxruozjRg Entrepreneurs interested in starting a tech company