Singapore is one of the most attractive destinations for entrepreneurs who want to start or expand their businesses.
The city-state offers a stable political and economic environment, a pro-business legal system, a skilled and diverse workforce, and a competitive tax regime. However, incorporating a company in Singapore is not a simple process. There are many rules and regulations that you need to comply with, and many decisions that you need to make. In this blog post, we will share some tips for success when incorporating your company in Singapore.
1. Choose the right business structure.
Depending on your business goals, needs, and preferences, you can choose from different types of business entities in Singapore, such as sole proprietorship, partnership, limited liability partnership, limited partnership, company, or branch office. Each type has its own advantages and disadvantages, such as liability protection, tax benefits, compliance requirements, and operational flexibility. You should consult a professional advisor to help you decide which structure is best for your business.
2. Register your company name.
Before you can incorporate your company in Singapore, you need to register your company name. Your company name should be unique, meaningful, and not infringe on any trademarks or existing businesses.
3. Appoint a local director and a company secretary.
Every company in Singapore must have at least one director who is ordinarily resident in Singapore, meaning a Singapore citizen, permanent resident, or holder of an employment pass or dependent pass. The director is responsible for managing the affairs of the company and ensuring compliance with the law. You can also appoint additional directors who are either local or foreign. In addition, every company must appoint a qualified company secretary within six months of incorporation. The company secretary is responsible for maintaining the statutory records and documents of the company and filing the necessary returns.
4. Prepare the incorporation documents.
To incorporate your company in Singapore, you need to prepare the following documents:
- A copy of the approved company name
- A brief description of the business activities
- The particulars of the shareholders, directors, and company secretary
- The registered address of the company
- The constitution of the company (formerly known as memorandum and articles of association), which sets out the rules and regulations for the management and administration of the company
- A declaration of compliance by the director and the company secretary.
5. Open a corporate bank account.
After incorporating your company in Singapore, you need to open a corporate bank account to manage your business finances. You can choose from various local and international banks that offer different types of accounts and services. You should compare the fees, features, and requirements of different banks before opening an account. Some banks may require you to present your incorporation documents, business profile, board resolution, identification documents, and proof of address.
6. Apply for the necessary licenses and permits.
Depending on the nature and scope of your business activities, you may need to obtain certain licenses and permits from various government agencies before you can operate legally in Singapore. For example, if you are engaged in food and beverage, retail, education, health care, or media-related businesses, you may need to apply for specific licenses from the relevant authorities.
7. Register for taxes and social security contributions.
As a business owner in Singapore, you are required to register for taxes and social security contributions with the Inland Revenue Authority of Singapore (IRAS) and the Central Provident Fund (CPF) Board respectively.
- Taxes: You need to register for corporate income tax within three months of starting your business operations. Corporate income tax is levied at a flat rate of 17% on your chargeable income (i.e., taxable income minus allowable expenses and deductions). However, you may be eligible for various tax incentives and exemptions that can reduce your effective tax rate significantly. You also need to register for goods and services tax (GST) if your annual turnover exceeds or is expected to exceed S$1 million. GST is a consumption tax that is charged at 7% on most goods and services supplied in Singapore or imported into Singapore.
- Social security contributions: You need to register as an employer with CPF within 14 days of hiring your first employee who is a Singapore citizen or permanent resident. CPF is a mandatory savings scheme that requires both employers and employees to contribute a percentage of their monthly wages to three accounts: Ordinary Account (OA), Special Account (SA), and Medisave Account (MA). The contribution rates vary depending on the age and income of the employee. As an employer, you are also required to contribute to the Skills Development Fund (SDF) and the Ethnic Funds (EF) for each employee.
Incorporating your company in Singapore can be a rewarding and profitable venture, but it also involves a lot of planning, preparation, and compliance. By following these tips, you can ensure a smooth and successful incorporation process and avoid any potential pitfalls or penalties. If you need any assistance or advice on incorporating your company in Singapore, you can WhatsApp us at +65 8822 XERO (9376) We are a professional corporate service provider that can help you with all aspects of setting up and running your business in Singapore.