Starting a new business requires proper planning and thorough research. One of the key aspects you must consider is the location of your company. No matter if you are a local entrepreneur or a foreign investor, there is no doubt that Singapore ranks among the best countries to conduct your business given the nation’s various advantages, like an attractive corporate tax system, business-friendly policies, and diverse pool of local talent.
However, before you seek an incorporation service provider to assist you with the registration of your business, let us share what you should know beforehand to ensure there are no hiccups with the incorporation process.
1. Singapore companies permit 100% foreign shareholding
Foreign entities looking to start a business in Singapore can have full ownership of the company thanks to a lack of restrictions typically present in other countries. This means foreign investors need not have to worry about finding a local business partner before registering their company in Singapore.
Moreover, this allowance extends to shareholders – both individual and corporate – as well. Simply put, this means all the assets and profits garnered by a Singapore business can fully belong to foreign individuals or corporations.
2. Mandatory appointment of at least one local director
While foreign entities are legally allowed to retain full ownership of a company registered in Singapore, the Companies Act mandates that every company, whether local or foreign, has to appoint at least one local director. The local director – referred to as a nominee director – can be a natural-born citizen of Singapore, a permanent resident, an EntrePass holder, or an Employment Pass holder.
Let us share the rationale behind this requirement. The Singapore government requires a local director to function as the contact person on behalf of the company to ensure the business complies with statutory requirements, such as the proper management of accounting records and the timely and accurate filing of annual returns.
3. Minimal share capital requirement
Paid-up capital is the amount of money a business receives from shareholders in exchange for the sales of the company’s stocks. This capital can be used towards the company’s business expense without reserve.
In Singapore, it is possible for you to register a company with a minimum paid-up capital of SGD$1 or an equivalent in other currencies. This requirement highlights the business-friendly nature of Singapore that the government wishes to promote to local and foreign investors alike to attract them to invest in the Lion City.
4. Reporting requirements for incorporated companies
All companies incorporated in Singapore are mandated to file their annual returns with the Accounting and Corporate Regulatory Authority (ACRA). This is to ensure that the company’s information on the ACRA registry is accurate. Additionally, companies must also file their financial statement reports and the date of their annual general meeting (AGM) yearly.
5. Hiring staff and leasing physical offices are optional
While the law requires you to provide a local registered address for your company, you do not necessarily have to scout and lease a physical office for your business. You can register your company with a virtual address, which makes things more convenient and helps you save on rental costs if a physical office is redundant.
Moreover, if your company is running a lean operation that can be overseen by just the business owner, you can even forego hiring any employees, as there are no regulations in Singapore stating the minimum number of workers a company requires. This means a business can even be entirely operated abroad by its sole foreign owner.
Conclusion
We hope what we have shared has provided you with a deeper understanding of the way businesses in Singapore operate and the requirements to note to ensure a hassle-free incorporation process.
If you are eager to get the ball rolling and register your business in Singapore, it is vital for you to engage the services of a reliable service provider to ensure the registration process is smooth. At Ackenting Group, we provide hassle-free incorporation services to help our clients set up their companies efficiently and reliably. With the required documentation, we can assist in incorporating your new company within an hour, minimising any unnecessary delays on your end.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
