Setting up a company in Singapore is a strategic move for business owners, thanks to the country’s efficient regulatory environment, low taxes, and robust economy. Known as a global business hub, Singapore has made it relatively straightforward to establish and run a business.
This article will dive deeper into the important aspects of setting up a company, from deciding the company types to preparing the legal requirements.
Why Choose Singapore To Set Up Your Company?
Singapore’s strong economy, strategic location, and business-friendly policies make it an ideal choice for business owners to establish a presence in Asia. With a solid financial infrastructure, clear regulatory framework, low corporate taxes, and easy access to major markets, it offers a strong foundation for business growth. The streamlined process for setting up a company ensures that both local and international entrepreneurs can efficiently incorporate, whether for small startups or large corporations.
1. Understanding the Company Types
One of the first steps in setting up a business in Singapore is deciding the company type. According to Accounting and Corporate Regulatory Authority (ACRA), business owners are required to specify their company type in order to register a business name.
There are seven distinct company types that can be incorporated in this country, each with its own set of benefits. Among these, the private limited type is the most popular choice for many entrepreneurs because of its flexibility and protective features.
The company types are:
- Exempt Private Company: The most common, with a limit of 20 shareholders (none of which are corporations) and limited liability, often indicated by “Pte Ltd” in the name.
- Private Company Limited by Shares: Similar to exempt companies but allows up to 50 shareholders, including corporations.
- Public Company Limited by Shares: Allows over 50 shareholders and can raise capital from the public but must register with the Monetary Authority of Singapore.
- Public Company Limited by Guarantee: Typically used by non-profits, with no share capital and limited liability to the agreed-upon amount in the company constitution.
- Unlimited Private Company: Can operate with or without share capital and has unlimited liability, often denoted by “Unlimited” in its name.
- Unlimited Exempt Private Company: An exempt variant with up to 20 shareholders and no corporate shareholders, with unlimited liability.
- Unlimited Public Company: Has over 50 shareholders, can include corporate shareholders, and carries unlimited liability.
Choosing the right company type is key to setting up your business operations, as each type offers different advantages, such as flexibility in ownership or fundraising. Understanding these distinctions will also help you select the structure that aligns best with your business vision and plans.
2. Legal Requirements and Documentation
To legally set up a company in Singapore, business owners must be registered with the ACRA. This process requires having at least one local resident director, a registered office address, and appointing a company secretary within six months of incorporation.
Here are some of the key documents required to set up your company legally:
- Company name reservation document
- ACRA’s company incorporation application form
- Details of directors, shareholders, and company secretary
- A signed constitution (formerly known as the Memorandum and Articles of Association)
To smooth the setup process, ensure all required documents are obtained and legal requirements are met. This will also set the foundation for a successful business operation in Singapore.
3. Cost Of Setting Up A Company In Singapore
Understanding the costs involved in setting up a company for proper budgeting is also important. Typically, these costs include registration fees, annual filing fees, and any incorporation services you may choose to utilise. Basic government registration fees start at SGD 315, though additional costs may apply for other business support services.
Moving Forward with Your Company Setup
Setting up a company in Singapore is a straightforward process when you’re clear on your business goals and legal requirements. By selecting the right company structure, registering the company name, and preparing all necessary documents, you’ll be on the right path to establishing your business.
However, navigating through these processes can be overwhelming. Therefore, to facilitate the entire process, many business owners opt for incorporation service providers, such as Segovia’s incorporation service. These service providers will help to manage all the logistics and ensure adherence to government regulatory standards, leading to a seamless company setup.
