In this comprehensive guide, we cover the fundamentals of incorporating and setting up your Singapore Private Limited Company. Learn about the documents and preparation you would need to do prior to incorporation, how to incorporate, immediate steps to take post incorporation, and finally, your new company Annual Compliance obligations.
What is a Singapore Company?
A Singapore company is an entity, that allows you to conduct business in Singapore. If you intend to conduct business in Singapore, most entrepreneurs choose between a choice of 3 different entities. A Singapore company is separate and distinct from its shareholders and directors.
There are 2 types of companies in Singapore — Private Limited, and a Public Company. In this guide, our main focus will be the more common, Private Limited Company. Private Limited Companies are not listed on SGX and have a maximum limit of 50 shareholders.
Shareholders are the owners of the companies, and they have the ability to appoint their director(s) to run and manage the company. The Singapore Companies Act, allows any person (foreign or local) above the age of 18 to register a Singapore company.
What are the benefits of setting up a Singapore Company?
There are several benefits of registering a Private Limited (Pte. Ltd.) Company rather than a Sole Proprietorship or Partnership. Learn about the full comparison between the 3 entities.
A Pte. Ltd. Company, being a separate legal entity would mean that its owners have limited liability. Where the owners will not be personally liable and for any legal or debts against the company.
At the pint of this writing, a company tax obligations ranges from 0% to 17% . This is favourable as compared to Sole Proprietorships and Partnerships, where the owners of these entities have to pay their own personal income tax, ranging up to a maximum of 22%.
TRENDS: A recent trend in 2020 would be the increase in incorporation of companies relating to cleaning services.
How do I Register & Set Up my Company?
Pre-Registration
Prior to the registration and incorporation, you would need to have the following information and documentation.
- Name of your Company (and alternatives if not approved or already taken).
- Description of business activity.
- A local resident Director, as well as the director(s)’s particulars.
- Shareholder particulars.
- Company Secretary particulars.
- The registered local address of the Company.
Depending on the nature of business and circumstances, Leftright Corporate may also need the owners to fill up a KYC form, as well as identity details.
Step 1: Company Name Reservation & Approval
The name of your new Company must first be approved by ACRA, the governing body, and Company Registrar of Singapore. In most cases, approval of names are instant, if they meet the following criteria:
- Unique name (not taken), easy to read and does not contain obscene or vulgar characters.
- Does not infringe on any existing trademarks and copyrights.
- Approval may take longer if your Company has words such as: “Media”, “Bank”, “Finance”, etc..
Ideally, please provide as least 3 different variations of your Company name preference when engaging us with your company incorporation.
Upon name approval, the company name will be reserved for you for 60 days from the date of application. You are advised to incorporate the company within a specified period. Though, Leftright Corporate, as your registered filing agent can ask for an extension of another 60 days.
Step 2: Registration & Incorporation of Company.
As soon as all documentations are provided, signed, and the Company name is approved — the actual registration and incorporation should be completed within the hour or 2. Though, in some cases the other relevant governing bodies may request for additional information from shareholders or directors of certain nationalities.
The fee payable to ACRA for the incorporation is $300, and including the name reservation the total would amount to $315. Our Private Limited Company incorporation package includes all associated fees, so you’d not have any bill shock.
After Incorporation & Registration
Certificate of Incorporation
An electronic Certificate of Incorporation will be sent to the registered email address. This email is an acknowledgement that the incorporation and registration process is successful. The Company’s unique registration number (UEN) will also be stated.
This electronic certificate will be treated as the official Certificate of Incorporation in Singapore.
If required, an original hardcopy can be requested from ACRA at a nominal fee of $50, and typically takes between 3 – 5 days of processing time.
Company Business Profile
The business profile of your new Private Limited Company will now be available for purchase. As your registered agent, Leftright Corporate will secure a copy for you. The business profile is a PDF document which contains critical information of your company such as:
- Company name and registration number
- Previous names for the company (if applicable)
- Incorporation date
- Principal activities
- Paid-up capital
- Registered office address
- Shareholders’ details
- Directors’ details
- Company secretary’s details
You may also view a sample of a business profile provided by ACRA.
With both documents (certificate of incorporation and business profile), it is typically sufficient to proceed with legal and contractual purposes such as opening of corporate bank accounts, signing of office lease, as well as telephoen or internet services.
Opening of Corporate Bank Account
You can now open a corporate bank account to commence business transactions to your stakeholders. Singapore has many trusted and reliable banks such as DBS, OCBC, UOB, HSBC, Citibank as well as Standard Chartered Bank.
Leftright Corporate can arrange for the respective agents from the various banks to meet you at your convenience for your account opening, as part of your incorporation package. You would need to peruse through the different terms and conditions from the various banks, their respective charges and fees, as well as offers if any.
Apply for Business Licenses and/or Permits (optional)
Depending on the nature of your business, and its primary business activity, you may need to apply for businesses licenses and/or permits. Feel free to check out our summary in a separate guide.
If your company needs a business license or permit, please note to obtain them from the respective authorities prior to commencement of operations and business. Examples of businesses that require licenses and permits are: Food and Beverage businesses, travel agencies, financial services or institutions, cleaning services or businesses, and more.
Register your Company for Goods & Service Tax (GST) (optional)
It is mandatory to register your Company for GST if your annual taxable income is more than SGD 1 million dollars.
You may also voluntarily register for GST even if the company’s annual taxable income is less than SGD 1 million dollars.
IRAS provides a detailed guide on whether you would need to register for GST, or not.
After GST registration, all your services and products must incur an additional 7% tax fee to your consumers and customers. This 7% amount must be paid to the Singapore tax authority, IRAS and your Company must submit its GST Filings.
Annual Compliance & Filing Obligations
Annual Filing
As a registered Private Limited Company, you must submit your annual returns filing yearly. It is mandatory to submit your filing before the stipulated deadline, or a late penalty fee will be charged.
As your Corporate Secretary, we will monitor the deadlines, and offer reminder service to ensure all documentations and procedures are completed in order to successfully submit the annual filing.
Accounting Requirements
Your new company must maintain its accounting books in accordance to the SFRS. Such accounts include: general ledger, accounts payable and account receivables, or fixed asset ledger; every account and records must be recorded and maintained. Depending on the the solvency of your company, you may also be required to file and submit them in XBRL format.
