Incorporation in Singapore: What Do You Need and How Much?

Singapore has been ranked among the top three most business-friendly countries globally for a decade by the World Bank. In the 2020 survey, it ranked second behind New Zealand. This is due to Singapore’s position as a business hub among emerging markets like Indonesia and India, its stable political conditions, tax incentives, and clear laws and regulations in place.  It’s no wonder that companies of all sizes are starting to open their business in Singapore. However, it is important to keep in mind there are several requirements that need to be met, requirements in Incorporation in Singapore, which are the following:

Appoint a director

To register your company 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. 

Appoint a 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 incorporated or 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.

Obtain shareholders

Private companies in Singapore should have at a minimum of one and a maximum of 50 shareholders. Shareholders can come either in the form of an individual, another legal entity, or trust. All shareholders can be foreigners; having a Singaporean is not a requirement.

Registered address

Setting up a company in Singapore (Incorporation in Singapore) means having a business name and a local business address.

Business Activity and Financial Year End

Every Company can have up to two Business Activity Codes which best describes 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.

Capital

To register your company in Singapore, you must have at least S$1 paid-up capital that can be increased to any amount after incorporation.

Incorporation in Singapore - What Does It Cost to Incorporate a Business in Singapore?

After knowing all the requirements of company registration in Singapore (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:

Incorporation in Singapore, the Incorporation fees

According to the Accounting and Corporate Regulatory Authority (ACRA), you will need to pay S$315 to incorporate your business. This cost consists of two components; the registration fee of S$300 and reserving the company name of S$15.   

Renting cost

As you need a local address to be an incorporated business in Singapore (Incorporation in Singapore), you 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 by adopting a virtual office.

Annual General Meeting and Annual Return

A Private Company will need to hold its Annual General Meeting within 6 months after its Financial Year End and file its Annual Return, which costs S$60 on the BizFile Portal) within 7 months after its Financial Year End. Prior to the Annual Return, it will need to prepare its Financial Statements to present to its Shareholders.

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 it Corporate Income Tax, and potentially Estimated Chargeable Income Tax (if it is not exempt).. Accounting and tax are not everyone’s specialty; this is where a third-party service 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 S$35,618.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 the city-state. We hope this article gives you an idea of setting up a business and how much it costs to register a business in Singapore. 

Are you looking to incorporate (Incorporation in Singapore) your company in Singapore today? Look no further; start it with Lanturn.