Singapore as a Business Hub : our Singapore Company Formation Guide
Singapore's strategic location, robust legal system, and favorable economic policies make it a top choice for entrepreneurs globally. We made this Singapore Company Formation Guide so you will know what to expect. Known for its ease of doing business, Singapore offers a supportive environment for both local and foreign companies.
Types of Companies in Singapore
Entrepreneurs can choose from various business structures in Singapore, such as:
Sole Proprietorship
General Partnership
Limited Partnership
Private Limited Liability Company
Public Limited Liability Company
Free Zone Company
Each type serves different business needs, from individual entrepreneurs to large multinational corporations.
Company Registration Requirements
Shareholder Limits: Singapore companies can have a minimum of one shareholder and a maximum of 50.
Management Structure: At least one manager must be a resident of Singapore, but companies can also appoint local or foreign directors.
Age Restrictions for Directors/Managers: Individuals must be above 18 years old to serve as directors or managers.
Minimum Share Capital: There is no minimum share capital required for LTD Companies in Singapore.
Taxation and Incentives
Singapore's tax regime is favorable for businesses, offering one of the lowest corporate tax rates in Asia. There are no capital gains or dividend taxes, and a vast network of double taxation agreements helps minimize tax liabilities for international businesses.
Corporate Tax Rate:
Onshore companies
8.5% for taxable income of maximum 200,000 S$ per year with taxe exemptions
any income exceeding 200,000 S$ will face a tax rate of 17%,
while offshore companies enjoy a 0% rate.
Dividend Tax: Singapore does not impose a dividend tax.
VAT Rate: A standard rate of 7%, with a 0% rate applicable to certain goods.
Tax Treaties: Singapore has approximately 88 double taxation treaties.
Tax Exemptions and Incentives: Startups benefit from a corporate tax exemption for the first three years, and there are various investment and internalization incentives available.
Legal and Compliance Aspects
Registered Address Requirement: All companies must have a local address in Singapore.
Annual Meeting: Mandatory for all companies.
Company Redomiciliation: Permitted under Singapore law.
Electronic Signature: Accepted for official documentation.
Annual Return: Companies are required to submit an annual return including Accounting and audit and annual profit tax return.
Foreign Ownership: Fully allowed in Singapore.
Company Formation Process
The company formation process in Singapore involves several key steps:
Reserving a trading name.
Drafting necessary documents.
Filing documents with the Accounting and Corporate Regulatory Authority (ACRA).
Opening a bank account and registering for tax and GST.
Obtaining any necessary business licenses.
Requirements for Foreign Investors
Residence Permits: Required for foreign investors planning to relocate to Singapore.
Local Director: At least one director must be a Singapore resident.
Company Secretary: Mandatory to appoint a company secretary.
Advantages of Setting Up in Singapore
Singapore offers numerous advantages for business owners, including:
A stable and reputable fiscal domicile for global commercial activities.
Ideal for holding companies.
Suitable for online companies, such as e-commerce platforms.
Attractive tax regimes, especially for startups and offshore companies.
100% foreign ownership allowed across all sectors.
Post-Registration Requirements
After registration, companies must comply with various local regulations, such as:
Registering with the Central Provident Fund.
Applying for necessary business licenses.
Opening a corporate bank account.
Registering for employee-related taxes and contributions.
FAQ on Company Formation in Singapore
Who Can Open a Company?
Anyone, regardless of nationality.
Local Office Requirement:
Companies must have a registered address in Singapore.
Bank Account Opening:
Necessary for company formation.
Minimum Share Capital:
1 SGD, with no upper limit.
Incorporation Timeframe:
Approximately 24 hours, longer if special licenses are needed.
Special Permits and Licenses:
Required for certain business activities.
Why Invest in Singapore?
Singapore's status as a leading financial center, low tax rates, and a multitude of incentives make it an attractive destination for investors globally. Connect with us to start you business locally.
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