Why Set Up A Company in Singapore?
Singapore is an ideal location for those seeking to set up a business or purchase property as the country has fast-established itself as a business hub with world-class infrastructure and an extremely low corporate tax rate. If you’ve visited the country, you will know that it is exceptionally clean and green. The city-state also boasts an exceptionally well-educated population with fluent English and Mandarin speakers boasting a first-world proficiency level and above, which creates a desirable environment for business and learning. You can be certain that it is a very legal and a reasonably trouble-free place to do business.
What is a Singapore Private Limited Company?
Setting up a Private Limited Company (Pte Ltd) in Singapore is a relatively straightforward process and can be a great way to kickstart a business. A Singapore Private Limited Company (Pte Ltd) is a corporate structure that limits the liabilities of a company’s owners and shareholders. It is independently managed and funded by its shareholders, and profits are distributed among them based on the number of shares they own. A Private Limited Company can be used to conduct any business activities that are permissible in Singapore and enjoys certain advantages, such as tax benefits, protection of personal assets, and the ability to raise capital more easily. The Singapore Companies Act requires that all Private Limited Companies be registered with the Accounting and Corporate Regulatory Authority (ACRA). The application process is simple and straightforward and can be completed online. In order to set up a Private Limited Company in Singapore, you must first select a company name, submit the required documents, appoint directors and shareholders, and appoint a company secretary. Once the company is registered, you will receive your company registration number and can begin operations and register for corppass.
Requirements for Private Limited Company Registration
Setting up a private limited company in Singapore requires diligent attention to certain legal and regulatory requirements. In order to be eligible for registration as a private limited company in Singapore, the company must have at least one shareholder and a minimum of one local director, and the director must also be a resident in Singapore.
The Company’s name needs to be approved by Accounting and Corporate Regulatory Authority (ACRA) and have a paid-up capital of at least $1. A registered office address is required and a Constitution is being filed with Accounting and Corporate Regulatory Authority during the incorporation. The company must prepare a Registrar after the incorporation.
Company Name
Business owners require careful thought when selecting a name for your business. ACRA in Singapore, will deny authorization for those which are the same or almost identical name to the existing businesses. It is vital to have a company name that is easy to recall in order to set up a branding. It should be indicative of the main services offered. In our current tech era, people expect a business to have its own website. Consequently, opt for a similarly named company name and website to facilitate branding.
Business Activities
When you are incorporating a business in Singapore, there is a need to describe your business activities in the application process. You will have to refer to the Singapore Standard Industrial Classification Code (SSIC) and follow its guidelines.
Shareholding
Shareholding is an important part of setting up a private limited company in Singapore. It is the way that ownership is divided among the shareholders of the company. A private limited company must have at least one shareholder, and not exceed 50 or more shareholders.
Shareholders’ Agreement
A Shareholders’ Agreement is an important document used when setting up a Private Limited Company in Singapore. This agreement is created between shareholders and outlines the rights, responsibilities and obligations of the shareholders regarding the company. It defines the powers and duties of the Board of Directors, Board of Shareholders and the management team. It also outlines the rights and responsibilities of each shareholder in regards to voting, dividends, contributions and capital.
Particulars of Shareholders
Particulars of shareholders are a key factor in setting up a private limited company in Singapore. Shareholders are the owners of the company and hold the rights to the company’s assets. The minimum Shareholders is one and the maximum is not more than fifty, and must be at least eighteen years of age or above. Each shareholder must have an Initial Contribution, which is a sum of capital paid up for each share. The minimum amount of shareholding is one Singapore dollar. The Initial Contribution must be paid before the registration of the private limited company.
Particulars of Directors
Setting up a private limited company in Singapore requires the particulars of its directors to be submitted to the authorities. These particulars include the name, nationality and residential address, contact number and email address. At least one of the directors must be a Singapore citizen, Singapore permanent resident or an EntrePass holder.
Registered Office Address
A registered office address is a mandatory requirement for setting up a private limited company in Singapore. It is the address that is officially recognized and registered with the Accounting and Corporate Regulatory Authority (ACRA). The registered office needs to be local in Singapore. All official documents and correspondence such as letters and notices from government departments, will be sent to this address.
Company Secretary Particulars
The particulars of the Company Secretary are taken with ACRA at the point of setting up a Private Limited Company in Singapore. All Private Limited Companies in Singapore must appoint a qualified Company Secretary within six months of incorporation. The Company Secretary must be a Singapore resident or a Singapore corporate entity having a Singapore registered office.
Constitution
The constitution is an important document required when setting up a private limited company in Singapore. It serves as a legal document that sets out the rules and regulations governing the company. It outlines the company’s objectives, the rights and responsibilities of members, and the structure of the company’s management. The constitution must be submitted to the Accounting and Corporate Regulatory Authority (ACRA) before the company can officially commence operations.
Audit Exemption
Currently, a company is exempted from having its accounts audited if it is an exempt private company with annual revenue of less than $5 million. The approach is being replaced by a small company concept which will determine exemption from statutory audit. A company no longer needs to be an exempt private company to be exempted from audit. You can read more about this here.
Company’s Business Profile
Setting up a Private Limited Company in Singapore is a great way to tap into the city-state’s rapidly growing economy. The Company’s business profile provides information such as the business sector it operates in, and can include various types of activities, such as trading, professional services and manufacturing. The business profile can also be altered to suit the business’s changing needs over time. In addition, the Company must also have a registered address in Singapore. This can be a residential or commercial address, or even a virtual office. The registered address will be used for all official correspondence and communications.It also indicates the financial year end and the date of filing annual general meeting . Finally, the Company must submit all required documentation to the relevant authorities in order to obtain the necessary licences and permits to operate.
Share Certificate
Setting up a private limited company in Singapore can be a great way to start a business. One of the important documents is a Share Certificate. A Share Certificate is a document that outlines the number of shares held by a shareholder in a company. It also outlines the details of the shareholder such as name, address, date of issue and shares held. The Share Certificate is a key document as it serves as legal proof that the shareholder owns the number of shares indicated in the document. It is also used for tax declarations and for the transfer of shares.
First Board Resolution
The first board resolution of a private limited company in Singapore is an important step in the process of setting up the business. It outlines the roles of the directors and shareholders and establishes the company’s purpose and legal structure. The board of directors of the company must agree on the resolution and sign it.
Resolution for Opening of Bank Account
Setting up a private limited company in Singapore requires a business bank account to receive and pay for the services and goods rendered. To open a business bank account, you will need to provide a resolution that authorises the opening and operation of the bank account. This resolution should be formally approved at the company’s first board meeting and signed by two directors or the company secretary.
Opening a Corporate Bank Account
Setting up a Private Limited Company in Singapore requires opening a corporate bank account to ensure proper and secure handling of finances. Opening a corporate bank account is separate from any personal accounts. It will require the company to provide details of the business, such as the Constitution of the Company and business profile. Additionally, the company will need to provide the details of its directors and shareholders.
Company Seal
Setting up a Private Limited Company in Singapore requires a company seal. This serves as an official seal for the company. It is used to authenticate documents, such as contracts, and indicates that the company is legally established. The stamp must contain the company name, registered address, UEN number, and the words “Private Limited”.
Annual General Meeting and Annual Returns
A Private Limited Company in Singapore is required to hold an Annual General Meeting (AGM). This meeting is necessary for the company to review the board of directors’ report on the financial performance of the company, and to approve the accounts and make any other decisions that may be required. At the AGM, the company must also appoint auditors (if required), confirm directors’ fees, directors remuneration, approve dividend payments, and approve the annual financial report of the company. The company must file an Annual Return within one month of the AGM. It must also submit its audited accounts (if required) to the Accounting and Corporate Regulatory Authority (ACRA). AGMs and Annual Returns should be kept in the register of the company. It should also keep up-to-date accounts and keep a full set register of the company showing all the relevant information of the shareholders and directors. Finally, the company should also submit a tax return to the Inland Revenue Authority of Singapore (IRAS) each year and to ensure that all taxes are paid on time. With all these requirements, setting up a Private Limited Company in Singapore is a complex process, but it is necessary for the company to operate legally.
Filing of Tax
All companies registered with ACRA will automatically register with the Inland Revenue Authority of Singapore (IRAS) and file their taxes according to the Singapore tax regulations. This process involves using a Unique Entity Number (UEN) and filing the corresponding forms which must be completed and filed with the IRAS. Companies must also be aware of all the relevant tax filing deadlines in Singapore, as any failure to comply with these dates may result in heavy penalties and interest fees. To avoid any issues, companies are strongly advised to consult tax professionals and make sure all their filings are done accurately and in a timely manner.
End of Financial Year
At the end of the financial year is an important time of the year for any business, especially for private limited companies in Singapore. At this time, businesses should review their financial records, assess their performance and plan for the year ahead. It is also important for companies to take care of their legal obligations such as filing annual returns, auditing financial statements and filing of tax returns. Moreover, companies should also review and update their company constitution to ensure that their operations remain within the bounds of the law.
