Singapore is frequently ranked by the World Bank as one of the easiest places in the world to do business.
Here is a guide on how to get started.
1. Choose your business structure.
There are a few different types of structures to choose from when starting a business in Singapore.
A business owned by a single person or company. The sole-proprietor has absolute say in the running of the business.
Not more than 20 partners. Once there are more than 20 partners, the partnership must be registered as a company under the Companies Act, Chapter 50. It will then have its own legal personality i.e. rights to own properties, has perpetual succession and can sue or be sued in its own name. It usually has the words 'Pte Ltd' or 'Ltd' as part of its name.
Limited Liability Partnership (LLP)
Gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.
The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.
Limited Partnership (LP)
Consists of a minimum of two partners, with at least one general partner and at least one limited partner. An LP does not have a separate legal entity from the partners.
Entrepreneurs are advised to choose the most appropriate structure that meets their business needs.
These questions might help determine the appropriate business structure:
- How much capital are you prepared to invest?
- How many owners will there be in the business?
- What liabilities and responsibilities are you prepared to assume?
- What risks are you prepared to take?
- Will a company of that particular structure be easy to close?
2. Register your company.
Businesses in Singapore must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
Some of the information required in the application process includes:
- Business name
- Proposed principal activities of the business
- Minimum paid-up capital of S$1.00
- Local registered office address
- Name and relevant details of one shareholder
- Name and relevant details of one resident director
Fees for registering a company are S$15 for the name application and S$300 to incorporate the company. The registration is usually approved within 15 minutes for online applications.
The minimum age to register a business is 18 years old. The application to register a new business must be submitted online via BizFile, ACRA’s online filing and information retrieval system.
Login to BizFile using your identification number and SingPass to submit an online transaction. You can do this using your own computer, at CitizenConnect Centres located at Community Centres or at one of ACRA’s BizFile Kiosks at its premises.
You can also choose to engage the services of a professional firm such as a lawyer, accountant or chartered secretaries to submit the online application on your behalf.
It takes around 15 minutes to incorporate a company after the registration fee is paid. However, it may take between 14 days to two months if the application needs to be referred to other authorities for approval or review.
ACRA will issue your business a Business Registration Number (BRN) which serves as a unique identifier of your business.
To relocate to Singapore, one would need an Employment Pass or EntrePass, which can be applied for once the company is incorporated.
It is a statutory requirement that a company incorporated in Singapore has a local registered office address, as well as a director who is ordinarily resident in Singapore. Individuals who are deemed to be ordinarily resident would have their usual place of residence in Singapore. Singapore citizens, Singapore permanent residents, EntrePass holders or Employment Pass holders with local residential addresses can be accepted under this definition.
Some requirements for foreigners to apply for an EntrePass include: a legal business entity registered as a Private Limited company, which has not been registered for more than six months at the point of application. Foreign applicants also need to hold at least 30 per cent of the shares in the business and the company needs to have at least S$50,000 of paid-up capital. In addition, EntrePass applicants need to write a detailed business plan with financial projections, as well as pay a security deposit of S$3,000. Successful applicants will be issued an Approval-In-Principle letter within two to six weeks.
Alternatively, a foreign corporation can incorporates a wholly-owned subsidiary company in Singapore that is limited by shares and its employee would hold an Employment Pass. A local resident director is still required for the incorporation process; hence, a nominee director may be engaged for the purpose of fulfilling this statutory requirement while the employee’s Employment Pass or EntrePass is in the process of being approved.
More information about the difference between Employment Passes and the Entrepass can be found here.
If one does not intend to relocate to Singapore, a nominee resident director can be appointed to satisfy the statutory requirement.
Sources: ACRA, Rikvin
The Ministry of Manpower: www.mom.gov.sg
Accounting and Corporate Regulatory Authority: www.acra.gov.sg
Enterprise Singapore: www.enterprisesg.gov.sg
Economic Development Board: www.edb.gov.sg