Singapore incorporation for locals and foreigners is easier than others may think. The country makes starting and growing a business in Singapore easier than in most countries. The World Bank recognizes this fact and has even ranked Singapore among the top three most business-friendly countries globally and has held that position for over a decade. Its position as a business hub among emerging markets like Indonesia and India, its stable political conditions, tax incentives, and clear laws and regulations make it the perfect place for businesses to start or expand.
If you’re a local business owner wanting to start their first business or a foreign business wanting to expand over to Singapore and want to learn how the process of company incorporation in Singapore works, be sure to take note of the following:
Company Incorporation Requirements
Appoint a director
To incorporate in Singapore, you need to have at least one resident director, either a local citizen, a permanent resident or someone with a suitable work visa. If you are from overseas you can appoint a local professional service to do that for you or hire local talent (employees) to be appointed as a resident director. Another option is to, avail of nominee director services like the one Lanturn offers.
Appoint a company secretary
To comply with Section 171 of the Singapore Companies Act, you will need to hire a qualified secretary within six months of your company being registered. The secretary’s job is to perform administrative duties, such as filing taxes and ensuring the company adheres to the latest laws and regulations.
Private limited companies in Singapore should have a minimum of one and a maximum of 50 shareholders. Shareholders can come either in the form of an individual, another legal entity or a trust. All shareholders can be foreigners; having a Singaporean is not a requirement.
Secure a business name and a business address in Singapore.
Business Activity and Financial Year-End
Every company can have up to two Business Activity Codes which best describe their business nature. The company will also need to pick a financial year-end. The first financial year end can be up to 18 months from the company’s registration date.
To register your company in Singapore, you must have at least 1 SGD paid-up capital that can be increased to any amount after incorporation.
If you want a more detailed guide on how incorporation in Singapore works, check our complete guide to registering a company in Singapore.
What Does It Cost to Incorporate a Business in Singapore?
After knowing all the requirements for company incorporation in Singapore, you might wonder “How much will it cost me?” Well, it depends on your available budget and economic situation. But, it can be broken down into several categories:
The Incorporation fees
According to the Accounting and Corporate Regulatory Authority (ACRA), you will need to pay 315 SGD to incorporate your business. This cost consists of two components; the registration fee of 300 SGD and reserving the company name of 15 SGD.
If you choose to incorporate your business with Lanturn, we take care of these fees. Reach out to us to learn more about our incorporation package.
As you are required to have a local address to proceed with incorporating in Singapore, you might need to rent an office space. This fixed-monthly expense depends on its location and size. On top of that, you need to pay for utilities. One alternative is to adopt a virtual office.
Annual General Meeting and Annual Return
A Private Limited Company will need to hold its Annual General Meeting within 6 months after its Financial Year End and file its Annual Return, which costs 60 SGD on the BizFile Portal) within 7 months after its Financial Year End. Before the Annual Return, it will need to prepare its Financial Statements to present to its Shareholders. If you find the process complicated, you could choose to have service providers like Lanturn become your company secretary to handle this for you.
Accounting and taxes
When your business is incorporated in Singapore, you are expected to keep your financial records and business transaction history for at least five years. This is to make annual tax filing easier via IRAS—where the Company will need to file its Corporate Income Tax, and potentially Estimated Chargeable Income Tax (if it is not exempt). Accounting and tax is not everyone’s speciality; this is where a third-party service provider or hiring an accountant may help.
Hiring a secretary
As mentioned above, you will need to have a secretary to register for your company. While it is true that you can assume the role yourself (as long as the Company has two or more directors)一 costing you nothing, it is unsustainable in the long run. You will not only need to think about administrative duties but the bigger business picture as a whole. Delegating to a company secretary is the way to go.
According to PayScale, the average yearly salary of a secretary is 35,618 SGD. Singapore is an attractive location for businesses in every industry due to its proximity and stability. Therefore, more and more companies are looking to open and incorporate their business in Singapore.
When hiring a Company Secretary
If you are having trouble finding the right person to manage your company’s secretarial tasks, an outsourced corporate secretarial service is a great alternative. There are many reasons why these services would be more beneficial to your company than hiring someone in-house. Here’s why:
- Cost Efficiency: It saves costs by avoiding full-time employment expenses.
- Expertise and Compliance: Specialised professionals ensure legal and regulatory compliance.
- Focus on Core Business: Allows companies to concentrate on strategic initiatives.
- Flexibility and Scalability: Easily adapts to changing business needs.
- Risk Mitigation: Reduces errors, omissions, and non-compliance risks.
- Access to Technology and Infrastructure: Utilises advanced platforms for efficient processes.
- Confidentiality and Security: Ensures protection of sensitive information.
Here at Lanturn, we offer great corporate secretary packages which cost only as little as 546 SGD a year.
Incorporating a company in Singapore requires careful consideration of various factors and understanding the associated costs. By following the necessary steps and obtaining the required documents, entrepreneurs can establish a solid foundation for their business and stay compliant in Singapore’s thriving economy.
Incorporate in Singapore with Lanturn
Getting the help of a professional can help speed things up while also ensuring that all your documents and paperwork are in order. Our team at Lanturn has years of experience assisting different businesses to incorporate here in Singapore. We’ve assisted entrepreneurs in setting up sole proprietorships, private limited companies and branch offices in Singapore.
Contact us today to learn more about our incorporation packages and other services you might need to help get your business up and running!