Is It Easy to Start a Business in Singapore?
Singapore is considered one of the best places in the world to do business. Foreign companies are keen to do business in Singapore because of its business-friendly policies, strategic location, highly developed infrastructure, and simple and investor-friendly tax regime.
Many international entrepreneurs are eagerly looking for information on “How to start a business in Singapore as a foreigner?”
Every piece of essential information can assist someone in making quick and difficult decisions on the move. As such, you may take advice from a reputable registered filing agent if you are a first-timer. In this article, we will provide you with an understanding of how you can start a business in Singapore as a foreigner.
Can a foreigner easily register a corporation in Singapore?
Yes, absolutely! A foreigner can register a corporation and own 100 percent of its shares without difficulty, just like a local Singaporean!
In Singapore, anyone above the age of 18 can establish a business. Assuming he hasn't been convicted of a crime or declared bankrupt.
In addition to Singaporeans, Permanent Residents (PR) and holders of Employment Passes, EntrePasses, and Dependents Passes, can register a corporation and become shareholders.
How to set up operations in Singapore?
Foreign companies can set up operations in Singapore in four ways:
Transfer of registration
It is a process where a foreign corporate entity transfers its registration from its place of incorporation to another jurisdiction. Once the registration is transferred, the entity will cease to exist in its original place of incorporation. The redomiciled corporation will become a Singapore company and must comply with the requirements of the Companies Act.
Setting up a Representative Office
Foreign companies interested in exploring potential business opportunities in Singapore may set up a representative office before committing to a business venture.
A representative office is a temporary set-up with no legal status, so it cannot engage in any trading or business activities that yield a profit.
It can only carry out market research and feasibility studies and participate in big shows and exhibitions. The applications for registering a representative office must be submitted to Enterprise Singapore.
Incorporating a Subsidiary Company
For small to medium size foreign companies, they may choose to establish their presence in Singapore by incorporating a Singapore subsidiary.
A Singapore subsidiary company is a private limited company incorporated in Singapore that can be wholly owned by a foreign company. It is considered a separate legal entity from a foreign company.
Registering as a Foreign Company
A foreign company must register itself with ACRA if it carries its business in Singapore or is planning to carry on business in Singapore.
Any foreign company wishing to register itself with ACRA may engage the services of a registered filing agent to assist with the registration of the company. The registered filing agent will prepare all the documents required for the registration of a foreign company.
When choosing a name, the foreign company must avoid names that are:
- Identical to the name on the register
- Identical to a reserved name
- Prohibited by the minister (eg. Temasek)
The name of the foreign company that is registered with ACRA must correspond to its name as registered in its palace of incorporation or formation
How much does it cost to incorporate a company in Singapore?
The ACRA fees for:
- Company name application is S$15
- The company registration fee is S$300
ACRA will send you an Incorporation Email once your registration is complete. It is used as the Incorporation Certificate in Singapore. You can get a hard copy of it if you pay the required fees.
Do most foreign companies have a registered office?
The foreign companies must have a registered office in Singapore which must open not less than 5 hours between 9 a.m to 5 p.m each business day.
In addition, it must have at least one authorised representative at all times who must be a resident and who is answerable for all matters required to be done by the company. However, he/she may be liable to penalties imposed on the company contravening the Companies Act.
What are the obligations of a Foreign Company?
Change in particulars of the foreign company
The company must notify ACRA whenever there is a change in the particulars of the foreign company or the particulars of the director or the authorised representative within 30 days of the date of the change.
There is no requirement to notify ACRA if the director or authorised representative is a Singapore citizen or permanent resident and their residential address changes. Once the Ministry of Home Affairs notifies ACRA of the change of residence, the ACRA records will be automatically updated.
Foreign companies must file their financial statements up to the end of the previous fiscal year with ACRA. If the foreign company is obliged by law in its place of incorporation to table financial statements and hold an Annual General Meeting (AGM), the FS must be filed with ACRA within 60 days of the AGM.
If no AGM is required to be held, then the foreign company must lodge the FS within 5 months after the end of the financial year for a listed company and in any other case, the FS must be filed within 7 months after the end of the financial year.
Audited balance sheet and Profit or Loss Account
The foreign company must also file an audited balance sheet and an audited Profit and Loss Account that comply with the Accounting Standards.
The foreign company must ensure that its invoices, letters, etc carry the following information:
- Name and place in legible romanised letters
- Whether the liability of members is limited
- Unique Entity Number (UEM) issued by ACRA
Cessation of a Foreign Company
If the company no longer has a presence in Singapore, it must notify ACRA within seven days.
The Authorised Representative must notify ACRA within 14 days if the foreign firm goes into liquidation or is dissolved in its place of establishment.
In a nutshell, starting a business in Singapore is easy. As long as you have all the requirements needed for the registration, you can be done for a day.