Singapore is an exciting market to establish a new business in but make sure you're aware of the hurdles you may face during the process.
Singapore's highly-developed economy is an automatic first choice for companies looking to expand in the Asia Pacific region.
It is renowned for the ease of doing business, a skilled workforce, attractive tax rates and incentives, stability and consistent economic growth. The first step to success is getting incorporation right from the start, avoiding costly delays.
The main steps to incorporate a company
There are three important steps to the initial incorporation process in Singapore.
- Name reservation. This can be achieved in as little as one hour, with an approved name reserved for four months from the application date (with no extension to this period allowed). To prevent rejection, it's best to check the Accounting and Corporate Regulatory Authority's (ACRA) database to avoid identical or similar names to existing companies. If your company is a part of a group, a letter of appeal can be submitted for use of similar naming to other group companies, although the appeals process could result in a delay of up to two months. Similar delays can be incurred if the name contains certain words (such as 'bank', 'finance', 'law', 'media' and 'school') as other government authorities will need to approve the use of the term. You will need to provide particulars of directors and shareholders when applying for a name, so these must have already been decided.
- Appointment of at least one resident director. They must be at least 18 years old, of full legal capacity and a Singapore citizen, a permanent resident, an Entrypass holder or an Employment Pass holder (EP), although an EP needs to first obtain a letter of consent from the Ministry of Manpower before becoming a company director. The individual must also not have been previously disqualified from acting as a director.
- Company registration. This can be submitted via the ACRA online filing system, BizFile+.. After successful submission of the registration documents on BizFile+, instant approval from ACRA will be provided via email and the incorporation will normally be effective on the same date. In rare cases, ACRA may conduct random background checks on the information provided during company registration, which can delay the registration by up to two months. A company may choose a preferred registration number from a list of reserved registration numbers, for a fee, during the entity's incorporation/registration. ACRA will provide a complimentary business profile after incorporation of the company.
Corporate matters after incorporation
After incorporation, the company is required to hold its first board meeting to document or resolve initial corporate secretarial matters, including:
- opening a bank account (subject to fulfilling the bank's compliance requirements which might take more than month)
- appointing a qualified resident company secretary (within six months of incorporation)
- appointing an auditor if the company does not qualify for audit exemption (within three months of incorporation).
The company is required to set up a register of registrable controller and a register of nominee directors within 30 days of the date of incorporation. Any director who is a nominee director is obliged to inform the company about his/her nominee directorship within 30 days of incorporation.
The company must then set up a CorpPass account. This is required to access online systems supporting more than 140 government-related transactions in Singapore. After incorporating the company, the CorpPass account should be activated immediately to prevent any disruption to the company's business transactions.
Information needed to register a company
Particulars of all directors must be provided, including email address, local fixed line/mobile number, NRIC/passport details and proof of residential address. Directors can provide an alternate address to ACRA to keep their personal address from being made public. The company must also provide:
- shareholder's particulars (company can be 100% foreign owned)
- share capital of the proposed company (eg. currency, number of shares, types of shares, paid-up capital) – an initial share capital of SGD1 is permissible
- first financial year end – a new requirement by ACRA
- address of registered office (the use of a serviced office or address of a corporate service provider is allowed at this stage. After the company is incorporated, the officers can look for a physical office).
Key authorities and legislation to be aware of
The main corporate legislation in Singapore is contained in the Companies Act, Cap. 50, the Companies (Filing of Documents) Regulations, the Companies (Register of Controllers and Nominee Directors) Regulations 2017 and the Accounting and Corporate Regulatory Authority Act, Cap. 2A.
The company should also be aware of the following local authorities when doing business in Singapore.
- Inland Revenue Authority of Singapore (IRAS)
- Central Provident Fund Board (CPF)
- Singapore Economic Development Board (EDB)
- Enterprise Singapore
- Singapore Ministry of Manpower (MOM)
- The Singapore Business Federation (SBF)
Common mistakes made when registering a company
There are a number of mistakes commonly made by companies during the registration process, so note that:
- each director must sign a Form 45 consent to act as director, before appointment
- the secretary must sign a Form 45B consent to act as secretary, before appointment
- forms must be kept at the registered office. It's the company's duty to keep these consent forms
- during the registration process, share capital details of the company must be entered correctly.
Set up for success
TMF Group's Global Business Complexity Index (GBCI) ranks Singapore as one of the easier countries in which to set up and operate in the APAC region.
However, it is not without some business challenges. Demand from global businesses is providing tough competition and reducing margins, as well as increasing business costs.
Armed with knowledge on the economic and business landscape of the country, companies are better able to navigate registering their company and launching their business quickly. It helps to work with a trusted partner that has in-depth knowledge of local regulations and expertise in business operations to help smooth the move into new markets whilst you focus on your business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.