A Company is an entity that is registered under the Companies Act (Cap 50). It has its own legal personality that is distinct from its members and the persons who manage the company. Companies can therefore own property and sue or be sued in their own names. They are recognized as taxable entities in their own right.
Upon registration, companies must comply with the regulatory provisions of the Companies Act and any Rules made under the Act. A company is not carrying on business under its registered name; it must also comply with the provisions of the Business Registration Act. All companies must have at least one director who is ordinarily resident in Singapore. Only individuals of legal age and capacity may be appointed as a company's director.
The following persons are disqualified from acting as company directors:
- Undercharged bankrupts (unless they get permission from the High Court or the Official Assignee);
- Persons who are under disqualification orders made by the Court; Persons convicted of specified offences or offences involving fraud or dishonesty punishable with imprisonment for three months or more. (The disqualification is for five years from the date of conviction of the relevant offence,
- or, where the person has been sent to prison, from the date of release).
Companies must also have a registered office address to which all notices and official documents may be sent and at which the company is to keep the various registers that it is required to maintain under the law.
Companies must also appoint a competent Company Secretary whose main responsibility is to ensure administrative and regulatory compliance.
A company will continue to exist until it is dissolved. Dissolution often takes place after a process called 'winding-up' has been completed. Winding-up can take place voluntarily upon an appropriate resolution being passed by the company's members. Alternatively, it can take place by an order of Court upon the successful petition of the company, a creditor, a contributory, a liquidator or a judicial manager of the company.
During the winding-up, a liquidator will be appointed. The liquidator's role is to collect and realise the assets of the company. Generally speaking, the money collected will be used to first pay off all the debts of the company, and any amounts remaining will be distributed to the shareholders of the company.
Once the winding-up is concluded, steps can be taken to dissolve the company and have it de-registered.
The foreign individual who wants to set up a Singapore Company with the intention to relocate to Singapore will have to accomplish the followings:
Shareholders:The shareholder can be an individual or a corporate entity. 100% local or foreign shareholding is allowed. A director and shareholder can be the same or different person.
Paid-up Capital: Minimum paid-up capital for registration of a Singapore company is S$1.
Registered Address: The address must be a physical local address.(PO Box is not allowed.)
Company Secretary: Companies Act requires one Company secretary who must be a natural person and an ordinarily resident of Singapore.
We will need the following documents from you:
For each Singapore resident individual shareholder and director
For each non-resident individual shareholder and director:
For each corporate shareholder:
Please note the following:
All documents must be in English or officially translated in English;
All copies of documents must be certified true copies by a notary public or you must bring the originals to our office for sighting;
If you are overseas, you can email us the scanned copies of documents so we can proceed with preparing the necessary incorporation documents.
However we must receive the certified true copies (or sight the originals at our office) before we can incorporate the company.
Our compliance department may ask for additional information if necessary.
After engaging our services, we would perform the followings to incorporate your company:
Basically, the followings are the required documents to open a corporate account in Singapore banks:
Singapore banks may ask you to produce additional documents depending on the case. Generally, the majority of the banks require that the account signatories and majority directors be physically present in Singapore for signatures at the time of opening the company bank account. However, some banks will accept the signing of documents at one of their overseas branches or in front of a Notary Public.
Unless exempted from audit requirements under the Companies Act, every company must appoint an auditor within three months after its incorporation. Only small exempt private companies and dormant companies are exempted from audit requirements. A small exempt private company is one that meets the following conditions:
All locally incorporated companies are required to hold their Annual General Meeting (AGM) and file their annual returns under S175, S197 and S201 of the Companies Act.
At the AGM, directors shall present a true and fair view of the company's accounts to their shareholders.
The Companies Act does not prescribe the minimum level of qualifications for the person preparing the accounts. However, it will be the responsibility of the directors to appoint individuals with the required level of expertise for preparation of such accounts.
Annual General Meeting (AGM)
1. A company is required to hold its first AGM within 18 months after its incorporation.
2. Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months.
|Audited/Unaudited Accounts||The Annual Return must be filed with the Registrar within one month after the AGM.||Section 197|
For a public company listed or quoted on a securities exchange in Singapore:
Accounts presented at the AGM shall be made up to a date not more than 4 months before the AGM.
In the case of any other company:
Under this scheme, a newly incorporated branch that satisfies the qualifying conditions can claim for full tax exemption on the first $100,000 of normal chargeable income* (excluding Singapore franked dividends) for each of its first three consecutive YAs.
The exempted amount for each YA is summarised as follows:
|Year of Assessment(YA)||Exempt amount for new start-up companies|
2005 to 2007
First $100,000 Profits @ 100% (Tax Free) = $100,000
First $100,000 Profits @ 100% (Tax Free)= $100,000
To qualify for the tax exemption for new start-up companies, your company must:
1. Be incorporated in Singapore (other than a company limited by guarantee**);
2. Be a tax resident* in Singapore for that YA;
3. Have no more than 20 shareholders throughout the basis period for that YA where:
* A company is resident in Singapore if the control and management of its business is exercised in Singapore.
** With effect from YA 2010, the scheme will be extended to companies limited by guarantee, subject to the same conditions imposed on companies limited by shares.
A company is taxed at a flat rate on its chargeable income regardless of whether it is a local or foreign company.
The tax rates and tax exemption / rebate for each Year of Assessment (YA) are as follows:
|Year of Assessment(YA)||Tax Rate||Tax Exemption/Rebate|
Partial tax exemption and tax exemption scheme for new start-up companies
Companies will continue to enjoy the partial tax exemption scheme and tax exemption scheme for new start-up companies as provided in YA 2008 and YA 2009.
In addition, with effect from YA 2010, the tax exemption scheme for new start-up companies will be extended to include companies limited by guarantee, subject to the same conditions.
The first YA refers to the YA relating to the basis period during which the company was incorporated.
From the fourth YA onwards, your company will be given partial tax exemption instead of the exempted amount for new start-up companies.
Company must maintain proper records of its financial transactions and retain the source documents, accounting records and schedules, bank statements and any other records of transactions connected with your business.
For YA 2008 and each subsequent YA, the record-keeping period has been reduced from seven to five years.
|Types||Subsidiary Company||Representative Office||Branch Office|
|Entity Name||Need not be the same as parent company||Must be the same as parent company||Must be the same as the parent company|
|Allowed Activities||Can conduct all business activities||Can only conduct market research or coordinating activities||Must be the same as the parent company|
|Suitable For||For local or Foreign Companies that wish to expand their operations in Singapore||For Foreign Companies that wish to set up temporary vehicle in Singapore to conduct research and act as liaison office||For Foreign Companies thay wish to expand their operations in Singapore|
|Disadvantages||Continuing Compliance Obligations eg Financial Reports, Audit, AGMS, etc||It is a temporary vehicle and cannot generate revenue||Continuing Compliance Obligations eg Financial Reports, Audit etc|
|Ownership||Can be 100% foreign or locally owned||No Ownership||Owned 100% by the head office|
|Separate Legal Entity||Yes||No||No|
|Cap on Number of Members||Yes, max 50||Not Applicable||Not Applicable|
|Minimum Setting up Requirement||Min One shareholder, that can be an Individual or corporate (100% local or foreign shareholding allowed. Must have at least one resident director||Must appoint a Chief Representative who will relocate from headquarters||Must have two Singapore Resident Agents|
|Need for Audited Accounts||Yes||No||Yes|
|Filing of Accounts with ACRA and IRAS||Yes||No||Yes|
|Annual Filing||Must file audit report of subsidiary||Not Applicable||Must file branch office’s as well as parent company’s audit reports|
|Tax Treatment||Taxed as Singapore resident entity, local tax benefits available||Not Applicable||Taxed as non-resident entity, local tax benefits not available|
|Tax Benefits||A subsidiary company, with at least one individual shareholder with minimum of 10 percent shareholding, is entitled to local tax incentives and rebates||No Corporate tax. Employees have to pay personal tax||Partial tax exemption|
|Cessation of Business upon Death of a Member/Partner||No. Equity shares go on in perpetuity||Not Applicable||No|
|Validity Period||Perpetually until deregistered||This is a temporary Setup. It is intended not to last more than 3 years||Perpetually until deregistered|
|Normal Registration Time||3 hours||3-5 days||3 hours|
|Appointment of Officers||Must appoint at least one local resident director||Must appoint a Chief Representative who will relocate from headquarters||Must appoint two resident agents|
|Governing Body||ACRA & IRAS||International Enterprise Singapore||ACRA & IRAS|
We have a team of Accountants,Bankers and compliance experts who can advice on Singapore's Tax Regime(IRAS) & various regulatory frameworks such as ACRA to offer you a customized advisory services that include: