In recent years, Singapore is fast becoming the preferred country for new company incorporation. Many international companies start their new branch office or Asian headquarters in Singapore. It is home to many Fortune 500 companies including P&G, Unilever, MasterCard etc.
Multinational corporations (MNCs) looking to penetrate the Asia market or deepen their presence in Asia may leverage Singapore as a base to build consumer insights and develop business strategies for local markets.
In an article by The Business Times, Singapore is still one of the top 5 countries in Asia and in the top 20 worldwide for ease of doing business despite the ongoing pandemic.
The index ranked 77 jurisdictions across the world in three areas – accounting and tax standards, human resources and payroll matters, rules, regulations and penalties. Other positive factors include the competitive corporate tax rate of 17 per cent, its Avoidance of Double Tax Agreements signed with over 80 different countries, and simplified e-filing processes. So how do you go about company incorporation in Singapore?
We will show you a brief overview on company incorporation using the S.A.L.E.S concept.
Depending on the type of company you want to incorporate, you can have anywhere from 1 to 50 shareholders which may or may not be directors. Shareholders can consist of local and foreign individuals or companies. Moreover, 100% foreign shareholding is allowed. After the company incorporation in Singapore, the shares can be freely issued or transferred at any time.
For the registered office address, it has to be a local office or commercial building. It cannot be a residential address unless it is a private estate. For the company’s registered office, it must fulfil the following requirements:
- It is open for at least five hours during normal business hours on each business day
- It should be a physical office address located in Singapore
- It cannot be a P.O. Box
3. Local Directors
You need to appoint a minimum of one resident Director who is a Singapore Citizen or Singapore Permanent Resident under the Companies’ Act as part of the incorporation process. An unlimited number of additional resident or non-resident directors can be appointed as well. The Director(s) should fulfil the following criteria:
- He/ she is a person of sound mind over 18 years of age (i.e. corporations cannot be a director)
- He/ she is not an undischarged bankrupt by a Singapore Court or a foreign court
- He/ she is not an unfit director of an insolvent company
- He/ she has not been convicted in Singapore of any offence in connection with the formation or management of a corporation
- He/ she has not been adjudged guilty of three or more offences within the last five years in relation to the requirements of the Companies Act
- He/ she is not a director of a company that was wound up on grounds of national security or interest
- He/ she has not been convicted of any offence involving fraud or dishonesty
- He/ she is not subject to a disqualification order under section 34, 35, 36 of the Limited Liability Partnerships Act
Commonly referred to as share capital, the minimum paid capital is S$1 for company incorporation in Singapore. This amount can be increased any time after your company is incorporated. Some companies which are in regulated industries may be subject to higher minimum paid capital requirements such as:
- Travel agencies – S$100,000 or S$50,000 if the agency only conducts tours within Singapore and does not arrange for accommodation
- Public accounting firms – S$50,000
- Insurance intermediary firms –S$300,000.
All companies in Singapore are required to appoint a company secretary within 6 months from the date of incorporation. The company secretary is considered the officer of a company who assists in the administration of a company and ensures all directors and shareholders are kept well informed of statutory obligations – annual filing of audited accounts, holding of annual general meetings (AGM) etc. If the company only has one Director, he/ she cannot fulfil the role of a company secretary.
In summary, Singapore is the preferred country for many international companies to incorporate their new business due to its easy e-filing processes in many areas, solid infrastructure, impartial legal and finance systems as well as having one of the lowest tax rates in the world. With a corporate services provider, the incorporation process is made much smoother and hassle free in half the time!