Business In Singapore

Why Singapore?
Advantages of Incorporating a Private Limited Company
Types of Companies
Types of Business Entities
Useful Links

Why Singapore?

Singapore is fast becoming the business city of choice.  Its economy has been defined by its position as a small country with limited natural resources and a relatively small population, l
ocated strategically in the heart of Asia Pacific.

Excellent business and social infrastructure, political stability and economic ties with other counties has build up Singapore as a truly vibrant, cosmopolitan, and international global business centre.

At the heart of Singapore’s thriving business ecosystem.  Singapore is an ideal platform for the meeting of global talents, ideas, funds and businesses.

A well structured Singapore Company/Business Entities are excellent vehicles for you
to join global business market. 

Advantages of Incorporating a
Private Limited Company

Limited liability

A Private Limited Company is a legal entity. The Company itself can enter into business transactions and is responsible for the outcome. As a shareholder, your loss is limited to the issued and paid-up capital in the company.

Tax incentives

For a new start-up company, the following exemption is given on the company’s normal chargeable income for any of its first 3 consecutive years from incorporation.

  • Full tax exemption for the first $100,000
  • 50% tax exemption for the next $200,000

Types of Companies

Private Limited Companies

  1. A company limited by shares is a business entity registered under the Companies Act, Chapter 50. It has a legal personality i.e. it has rights to own properties, can sue or be sued. It usually has the words ‘Pte Ltd’ as part of its name.

  2. There must be at least 1 shareholder and 1 director of the company who is above 18 years old and be one of the following:
    • A shareholder and director can be the same person.
    • Singapore citizen.
    • Singapore Permanent Resident.
    • Employment pass holder.
    • Separate legal entity from shareholders and directors.
    • Number of shareholders is limited to 50 or less.

Exempt/Deemed Exempt Private Limited Companies

  1. Number of shareholders is limited to 20 or less and can only be individuals.
  2. Accounts not require to be audited provided that the Company’s turnover is less than S$5 million, less than 20 shareholders and all are individuals.

Public Companies

  1. It usually has the words ‘Ltd’ as part of its name.
  2. The number of shareholders can be 50 or more.
  3. Company may raise capital by offering shares to public.
  4. No restriction on transfer of shares.
  5. A prospectus must be registered with ACRA before making public share offers.

Foreign Companies

  1. Foreign companies who wish to commence operations in Singapore may wish to set up a branch in Singapore.
  2. It is an extension of the head office and is not limited in liability.
  3. Under the Companies Act, the head  office is responsible for the requirements of the foreign branch and liable for any offence imposed on the branch.

Compliance

Annual accounts must be submitted to Accounting and Corporate Regulatory Authority (ACRA) within 18 months from incorporation and subsequently every 12 months.

Types of Business Entities

Sole Proprietorships/Partnerships

Sole proprietorships and partnerships are not legal entities in which it cannot sue or be sued in its own name and it cannot own or hold property. A sole proprietorship is a business owned by an individual or one company. The owner must be a local resident in Singapore. If the owner is foreigner, a local manager must be appointed. 

Partnerships can have 2 or up to 20 partners. Once exceed 20 partners, it must be incorporated as a Company under the Companies Act. At least one of the owners must be a local resident in Singapore. 

The main advantage of such businesses are that they are easy to maintain with less administrative duties to comply.

The disadvantage is that a sole proprietor is personally liable for the entire business whereas in a partnership, all partners are jointly liable for the partnership debts and the liability is unlimited. Profits are taxed at personal income tax rates.

Limited Liability partnerships (LLPs)

A LLP is a partnership with limited liability. It is a legal entity and can enter into contract and hold property. It combines the benefits and flexibility of a partnership with that of private limited companies.

The main advantages are that the personal assets of the partners are protected. Owners are not personal liable for the wrongful acts of other owners but can be personally accountable for debts and losses resulting from their own acts. Any changes to the LLP do not affect its existence, rights or liabilities.

Representative Office

Foreign companies that are keen on exploring the viability of doing business in Singapore may wish to set up a Representative Office (RO). An RO has the benefit of allowing a foreign company to test out the business environment in Singapore before committing to any investment decisions. However, foreign companies wanting to maintain long term operations in Singapore will be required to incorporate as legal entities with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore.

An RO is a temporary facility provided to foreign companies to test the business environment in Singapore. It must confine its activities to market research, feasibility studies and liaison work on behalf of its parent company. The RO must not:

  • engage in any trading (including import & export) or business activities, whether carried out directly or on behalf of its parent company;
  • lease warehousing facilities. Any shipment/transhipment or storage of goods must be handled by a local agent or distributor appointed by its parent company;
  • lease its office to other establishments for a fee;
  • enter into business contract, issue invoice/receipt, open/receive letters of credit and contracts on behalf of its parent company or provide services for a fee.
  • The RO must appoint a staff from the HQ of the parent company or a Singapore employee of the parent company. The appointed representative’s main function is to represent the parent company.

Useful Links

Singapore Government
Singapore Ministry of Finance
Spring Singapore
Economic Development Board
IE Singapore
Central Provident Fund (CPF) board
Monetary Authority of Singapore
Singapore Statute On-line
Intellectual Property Office
Accounting and Corporate Regulatory Authority
Inland Revenue Authority of Singapore (IRAS)
Singapore Immigration & Registration
Singapore Budget 2015

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