2023 Foreigner’s Guide to Starting a Business in Singapore

As businesses worldwide recognise the immense opportunities in the Southeast Asian market, Singapore has emerged as an unrivalled destination and a strategic gateway for foreign companies aiming to establish or expand their regional presence. 

If you’re a foreign entrepreneur eyeing Singapore as your next business destination, it’s crucial to understand the intricacies of company registration in this dynamic city-state.

This article is a meticulously crafted roadmap to guide you through setting up your business in Singapore.

Step 1- Decide on the Business Structure

There are three legal/business structure options:

1. Private limited company,
2. Limited liability partnership,
3. or Sole proprietorship.

When selecting the best structure, consider tax rates, liability, scalability, and credibility. The private limited company is often preferred due to its suitability in meeting these criteria.

Step 2- Incorporate a Foreign-Owned Company in Singapore

There are three ways a foreigner can set up a private limited company in Singapore:

1. Incorporate a Private Limited Company and Apply for an Employment Pass:

• Begin by setting up a private limited company in Singapore.

• After the company is incorporated, apply for an Employment Pass.
• The Employment Pass application should meet eligibility and salary requirements.

2. Apply for an EntrePass and Establish a Private Limited Company:

• Apply an EntrePass to the Ministry of Manpower (MOM) in Singapore.
• The EntrePass application should be made before or within six months of incorporating a private limited company.
• Once EntrePass is approved, proceed with the establishment of the company.

3. Engage a Local Nominee Director if Relocation is Not Applicable:

• If the foreign entrepreneur does not intend to relocate to Singapore, appointing a local nominee director is necessary.
• The local nominee director can fulfill the requirement of having a regional resident director.
• Ensure the nominee director understands their role as a statutory requirement without interfering in business operations.

Step 3- Commencing Business in Singapore

1. Choose a Unique and Meaningful Company Name:

• Submit a list of company names to your agent and ensure they comply with ACRA’s guidelines.
• The name should be unique, not vulgar or obscene, and free of copyright or trademark issues. See more on the ACRA website.

2. Collect Incorporation Documents:

• Obtain the necessary incorporation documents, including the approved company name from ACRA.
• Prepare the SSIC code and description of your business activities.
• Gather particulars of shareholders, directors, and the company secretary.
• Provide the local registered address for the company.
• Submit relevant identification documents for foreign individuals or companies.

3. Apply to ACRA:

• Your agent can apply for company incorporation with ACRA with the required documents.

4. Await Approval from ACRA:

• ACRA typically takes 1-3 days to process the application.
• Sometimes, it may take up to 2 months if referred to a higher office.

5. Pay ACRA’s Official Fees:

• Pay the necessary fees, including S$15 for registering the company name and S$300 for Singapore company registration.
• Additional fees may apply for nominee director and registered office address services if required.

6. Set Up Business Activities:

• Determine the appropriate Singapore Standard Industrial Classification (SSIC) Code to describe your business activities.

7. Shareholders and Share Capital:

• Have at least one and up to 50 corporate or individual shareholders.
• As a foreigner, you can own 100% of the share capital in a Singaporean company.
• The minimum initial paid-up capital required is S$1, with the option to raise additional funds when needed.

8. Create a Shareholders’ Agreement:

• Draft a shareholders’ agreement to define the rights and obligations of shareholders and describe their relationships.

9. Appoint Directors and Company Secretary:

• Provide details of at least one local or resident director who is ordinarily resident in Singapore.
• Appoint a qualified company secretary within six months from the company’s incorporation date.

10. Register a Valid Office Address:

• Provide a registered office address for official communication with government agencies.
• Home offices require permission from the appropriate authorities, and P.O. Box addresses are invalid.

11. Hire an Auditor:

• Unless exempted, hire an auditor within three months from the company’s incorporation date.
• Small companies or those belonging to a small group may be eligible for exemption.

12. Obtain the Certificate of Incorporation:

• Once your company is successfully registered, ACRA will send you an email as the Certificate of Incorporation.
• Download and print a hard copy, as it is required for entering into agreements, contracts, and transactions.

13. Obtain the Business Profile:

• Apply and obtain the business profile of your company from ACRA.
• The business profile includes the company’s name, Unique Entity Number (UEN), incorporation date, business activities, paid-up capital, registered office address, and details of shareholders, directors, and secretaries.

14. Issue Share Certificates:

• The company secretary should issue share certificates indicating the number of shares each shareholder owns.

15. Pass a Resolution for Opening a Bank Account:

• The board of directors must pass a resolution to open a corporate bank account in the company’s name and specify the authorised signatories.

16. Open a Corporate Bank Account:

• Submit the board resolution for opening a corporate bank account, along with copies of the incorporation certificate, business profile and identification cards or passports of the authorised signatories.
• Provide details of the ultimate beneficiary of the account.

17. Ensure Data Protection Compliance:

• Comply with the Personal Data Protection Act, even for newly registered Singapore businesses.
• Hire a data protection officer to ensure data accuracy and security, and that data is not retained longer than necessary.

18. Hold Annual General Meetings (AGM):

• Conduct the first AGM within 18 months of the company’s incorporation.
• Subsequent AGMs should be held at intervals of at most 15 months.

19. Determine the End of Financial Year (EoF):

• Choose any date as the company’s End of Financial Year (EoF), keeping it 365 days long for a new company.
• This choice is beneficial when applying for the Startup Tax Exemption scheme.

20. File Corporate Income Tax:

• pay corporate income tax by the deadline of 30th November for electronic filing.

21. Process Payroll:

• Issue itemised payslips to employees, providing gross salary details, deductions, and net salary.
• Submit employer returns or IR8A Forms to the Inland Revenue Authority of Singapore (IRAS) by the deadline of 1st March each year.

Conclusion

In conclusion, venturing into the Singaporean business landscape as a foreign entrepreneur is promising, thanks to the favourable regulatory framework and robust support system. Consider engaging a reputable consultancy firm like Rivkin to ensure a smooth and hassle-free process. With our expertise, we can guide you through every step, from company incorporation and securing the necessary permits to providing ongoing compliance support. Take the first step towards your entrepreneurial aspirations by contacting us. Empower your business ambitions and thrive in the dynamic environment of Singapore.

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