Company Registration in Singapore
There is no “offshore” legislation in Singapore. All private limited companies are incorporated under the same legislation – Singapore Companies Act, Chapter 50, whether they are doing business locally or “offshore”.
Legal form: A private limited company is incorporated under the Singapore Companies Act, Chapter 50 and registered with Accounting & Corporate Regulatory Authority (ACRA). A Singapore Company is a separate legal entity from its owners and as such the owners of the company are generally not liable for the debts of the company.
The most common type of company to be incorporated in Singapore is the private company limited by shares, commonly known as a private limited company. Shareholder’s liability, in most cases. is limited to the amount they paid for.
Name of the company: Singapore private limited companies must use the suffix Pte.Ltd or Ltd. to denote limited liability. Names which suggest any connection to the UK head of state are generally prohibited and certain words which suggest specialist activity can only be used when the appropriate licenses have been obtained e.g. bank, financial institution, insurance, fund management, university, Chamber of Commerce and other similar names. Name resembling names of existing companies or which are undesirable or politically sensitive will be rejected.
Memorandum and Articles of Association: A company is incorporated in Singapore by application made to the Registrar of Companies. Memorandum and Articles of Association must be lodged with the Registrar. Memorandum specifies the activities in which the company may engage and Articles of Association specifies the rules governing the internal management of the company.
Shareholders: With effect from 1 April 2004, there must be at least 1 shareholder who can either be an individual of any nationality or a corporate body. Details of the shareholders must be filed and appear on the public file, but anonymity can be preserved by the use of nominee shareholders. Shares must be expressed in a fixed amount. “Bearer” shares or “No par value” shares are not permitted.
The share capital: There is no specific minimum capital requirement. The recommended authorized share capital is S$ 1,000. The minimum issued capital is one share of par value.
Directors of the company: With effect from 1 April 2004, Singapore private limited company is allowed to have minimum one director who must be “ordinarily resident in Singapore” i.e. a Singapore Citizen, a Singapore Permanent Resident or a person who has been issued an Employment Pass/Approval-In-Principle letter/Dependant’s Pass. It is usual practice to have more then one director in the company, where foreign directors can be also appointed. Details of the directors appear on the public file, but anonymity can be preserved by the use of nominee directors. The director and the company secretary cannot be the same person. Corporate directors are not permitted.
Registered office and secretary: Every company, registered in Singapore is required to have a registered office and address there, which should be notified to the Registrar. Companies are required to appoint a qualified resident company secretary, who must be a natural person.
Taxation: Singapore registered companies enjoy very attractive tax exemptions and incentives. Your company pays less than 9% for the first S$300,000 annual profits and 17% flat after that for Year Assessment 2010-2012 on income sourced in Singapore. There are no capital gains or dividend taxes on Singapore companies. Excellent tax benefits and business reputation of Singapore are the key reasons why entrepreneurs from around the world prefer to form a company in Singapore.
To support entrepreneurship and to help Singapore local enterprises grow, a newly incorporated company that satisfies the qualifying conditions can claim for full tax exemption on the first $100,000 of normal chargeable income (excluding Singapore franked dividends) for each of its first three consecutive YAs.
A further 50% exemption is given on the next $200,000 of the normal chargeable income (excluding Singapore franked dividends) for each of the first three consecutive YAs.
First $100,000 @ 100% = $100,000
Next $200,000 @ 50% = $100,000
Total $300,000 $200,000
To qualify for the tax exemption for new start-up companies, your company must:
• be incorporated in Singapore (other than a company limited by guarantee);
• be a tax resident* in Singapore for that YA;
• have no more than 20 shareholders throughout the basis period for that YA where:
• all of the shareholders are individuals beneficially and directly holding the shares in their own names; OR
• at least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.
* A company is resident in Singapore if the control and management of its business is exercised in Singapore.
Audit and annual returns: For companies with annual turnover over S$5m, annual audited accounts are required to be filed with the Singapore Registrar, the accounts must be audited by a qualified Singapore auditor. However, Exempt companies are not required to have their accounts audited and annual accounts can be filed without audit.
To be defined as Exempt Company, the following conditions must be met: members of the company must not exceed 20, members of the company should be individuals and not a corporation, annual turnover should not exceed S$5m.
Estimated Chargeable Income (ECI Form) – must to be submitted 3 months after the end of the financial year. To complete it an estimate of the revenue of the company for the financial year is requested.
Annual Returns – in order to prepare these, book keeping and preparation of unaudited accounts or audited accounts is required. The deadlines for these documents for the first financial year are based on the date of the company’s incorporation. For the next years the dates are fixed.
C-Form – this is the Corporate Tax Form requested by Inland Revenue of Singapore. This is submitted on a yearly basis in November.
Meetings: Company meetings need not be held in Singapore. A new company must hold its first Annual General Meeting (“AGM”) within 18 months. Thereafter, the company must hold its subsequent AGM in every calendar year, and not more than 15 months from the last AGM.
Time needed for formation: Usually it is up to 3-8 working days.