Introduction: Why Singapore?
Singapore consistently ranks as one of the world’s easiest places to do business. In addition, its pro-business policies, stable political environment, and strategic location in Southeast Asia make it a top destination for entrepreneurs and investors. Furthermore, Singapore’s robust legal framework, attractive tax incentives, and skilled workforce create an ecosystem that fosters growth and innovation.
Whether you are a first-time entrepreneur with a new idea, an experienced business owner seeking expansion, or a foreign investor targeting the Asian market, understanding the process of company incorporation in Singapore is crucial. As a result, this guide will walk you through every essential step, ensuring you are well-prepared to set up your business efficiently and successfully in one of the world’s most dynamic economies.
1. Private Limited Company (Pte Ltd)
The Private Limited Company (Pte Ltd) is the most popular business entity in Singapore. Notably, it’s ideal for startups and SMEs because it provides limited liability and is recognized as a separate legal entity.
Key Characteristics:
- Shareholders’ liability is limited to their invested capital.
- The company can own assets, enter contracts, and incur debts in its own name.
- With perpetual succession, the company continues to exist even if shareholders change.
- You need at least one shareholder (100% foreign ownership permitted), one resident director, one company secretary, and a minimum paid-up capital of S$1.
2. Sole Proprietorship
A Sole Proprietorship is the simplest business structure, owned and run by one individual. However, there is no legal separation between the owner and the business.
Key Characteristics:
- The owner is personally responsible for all debts and obligations.
- There is no distinction between the business and the individual in law.
- Setting up this structure requires minimal paperwork and incurs low costs.
3. Partnership
A Partnership allows two to twenty people to run a business together and share profits or losses. Moreover, types include General Partnership, Limited Partnership (LP), and Limited Liability Partnership (LLP).
Key Characteristics:
- General Partnership: All partners assume unlimited liability.
- Limited Partnership (LP): At least one general partner with unlimited liability and one limited partner with limited liability are required.
- Limited Liability Partnership (LLP): All partners benefit from limited liability, making it popular with professional services firms.
4. Branch Office, Representative Office, and Subsidiary
Foreign companies have several options for establishing a presence in Singapore:
- Branch Office: Functions as an extension of the parent company, rather than as a separate legal entity. Consequently, the parent company remains fully liable for branch debts.
- Representative Office (RO): Designed primarily for market research or liaison work, an RO is not a legal entity and cannot conduct business activities or earn revenue. Additionally, it can operate for up to three years.
- Subsidiary: A Private Limited Company incorporated in Singapore and owned by a foreign parent, this offers limited liability and is treated as a separate legal entity.
Choosing the Right Entity:
Your choice depends on business goals, risk appetite, and long-term strategy. For most businesses, the Private Limited Company (Pte Ltd) delivers the best balance of flexibility, credibility, and liability protection.
Terra Advisory Services specializes in guiding you to the best decision for your needs.
Contact Terra Advisory Services today to discuss your options.
Step-by-Step Guide to Company Incorporation in Singapore
After selecting your business entity, follow these steps to incorporate your company. Although self-registration is possible, working with professionals like Terra Advisory Services ensures compliance and a seamless experience.
Step 1: Choose a Company Name
To begin, select a unique and appropriate name for your company. Next, submit the proposed name for approval by ACRA. Avoid names that are identical to existing companies, contain offensive language, or infringe on trademarks. Additionally, having several alternative names ready is wise in case your initial choice isn’t accepted.
Requirements for a Company Name:
- Ensure the name is unique and distinct from any existing companies.
- Avoid using language that could be considered offensive or vulgar.
- Check that your selected name does not violate any trademarks.
- Finally, include an appropriate suffix to indicate its legal form (for example, “Pte Ltd” for a Private Limited Company).
Step 2: Appoint Directors
Every company requires at least one resident director (Singapore Citizen, PR, or valid pass holder). There is no upper limit on the number of foreign directors. Directors must be at least 18 years old, not bankrupt, and not disqualified.
Step 3: Appoint a Company Secretary
A qualified company secretary must be appointed within six months of incorporation. Importantly, the secretary must be a Singapore resident and a natural person. If the company has only one director, that person cannot also be the secretary.
- Ensures statutory compliance.
- Maintains and updates company records.
- Prepares and files annual returns.
- Advises on corporate governance.
Step 4: Appoint an Auditor (If Required)
Companies that qualify as “small companies” are exempt from audits for the first two years. Otherwise, appoint an auditor within three months of incorporation.
Step 5: Determine Share Capital and Shareholders
The minimum paid-up capital is S$1. Shareholders can be individuals or corporate entities; there is no restriction on foreign ownership.
Step 6: Prepare Incorporation Documents
Required Documents:
- Company name approval letter from ACRA.
- Constitution (formerly Memorandum & Articles of Association).
- Consent forms for directors and secretary.
- Declaration of compliance.
- Proof of identity and address for all directors and shareholders.
Step 7: File Incorporation with ACRA
Complete filing online through the BizFile+ portal. Upon approval, ACRA issues your Certificate of Incorporation.
Post-Incorporation Steps
- Open a Corporate Bank Account: This is essential for managing finances. Terra Advisory Services can support you in this process.
- Obtain Business Licenses/Permits: These may be required depending on your industry and business activities.
- Register for Goods and Services Tax (GST): Registration becomes mandatory if your projected annual revenue exceeds S$1 million.
- Ongoing Compliance: It is vital to maintain proper records, file annual returns, and hold annual general meetings.
Terra Advisory Services provides comprehensive support from initial consultation to ACRA filing and ongoing compliance, ensuring your business is set up for success.
Learn more about our services and how we can help you incorporate your company in Singapore.
Why Choose Terra Advisory Services?
Your Trusted Partner for Singapore Company Incorporation
Navigating Singapore’s legal and administrative requirements can be challenging, especially for foreign investors or first-time entrepreneurs. Working with a trusted, experienced corporate service provider offers key advantages:
- Expert Guidance: Our professionals understand Singapore’s regulatory landscape, ensuring your incorporation is compliant and strategically optimized.
- Efficiency and Speed: We handle all filings and documentation quickly, letting you concentrate on your core business.
- Comprehensive Solutions: From incorporation and secretarial services to accounting, tax advisory, and bank account setup, we are your one-stop solution.
- Dual-Market Expertise: We also offer Malaysia company registration and cross-border solutions for businesses expanding in Southeast Asia.
- Official ACRA Accreditation: As a Registered Filing Agent, we are recognized for our reliability and expertise.
Ready to incorporate your Singapore company? Contact Terra Advisory Services today for a consultation and start your business journey with confidence.
Important Notice: This guide outlines the standard incorporation procedure for informational purposes. ACRA requirements can change, and individual applications may have unique complexities. To avoid delays or rejection, it is highly recommended to engage professional services. Terra Advisory Services manages the entire process efficiently, ensuring your company is set up correctly from day one.