Attractive tax rates, strategic location, and a well-enforced legal system while being the top financial hubs around the world are the reasons Singapore remains the best country in Asia and top 12 countries in the world to launch a business. Furthermore, with Singapore being one of the top 10 cheapest countries for company registration, this not only attracts the locals but also foreign entrepreneurs to incorporate their companies in Singapore.
Often, company incorporation brings about a rather daunting tone. With the complicated procedures and regulations needed to be followed, aspiring entrepreneurs find themselves lost in the sea of information which deters them from incorporating their business. Yet, incorporating a business is especially crucial as it allows business owners to have limited liability with the company. That is, owners and the company are taken as separate entities and owners are not liable for any debts or legal actions that the company might face.
As such, we have put together a simplified guide to help potential business owners by breaking down the tedious process of incorporating a business.
To help kickstart the process, here are some important documents and considerations business owners should prepare:
The first thing every company should have would be the company name. It is required in Singapore for companies to have their name approved before incorporating their company. For a smooth process, ensure that the company name is unique, not trademarked, not obscene, and is not reserved by another company.
Understandably, startups find it difficult to fill up all the job roles required for a well-functioning company. Thus, the Singapore government only requires two main officers for a company to be established – the director and a company secretary. The director of a company is mainly responsible for the company’s affairs and its strategic direction. A nominee director, an individual who on paper acts at the forefront of the company, is usually engaged by foreign entrepreneurs as Singapore requires one of the founding directors to be a Singapore resident. Here are the requirements when appointing a director in Singapore:
A company secretary is an individual who deals with the administrative elements of the company. Some of their responsibilities and job scopes include but are not limited to, the maintenance of the company’s registers and preparation of meeting minutes. Though unnecessary to have a company secretary from the get-go, the position should be filled within 6 months of company incorporation in Singapore, or the company would be subjected to a penalty of $1,000. Unlike the many requirements needed when appointing a director, a secretary only needs to be a Singapore resident and a neutral individual who is not the sole director of the company.
Share capital, or paid-up capital, is the amount of money that has been invested into the business by the owners. In Singapore, the minimum share capital required is only $1, with the option for owners to increase the amount of capital after incorporation. Shareholders are an essential requirement of a Singapore private limited company, with the need to have at least 1 shareholder to a maximum of 50 shareholders. Furthermore, foreign entrepreneurs would be glad to know that shareholders can consist of 100% foreigners.
For all communications and notices to be addressed, a company should have a registered office address where they keep their record and company register. In Singapore, owners are given the option to have their residential address as their office address under the home office scheme. Nonetheless, here are the requirements for having a registered office address:
The constitution is a legal document containing the rules and regulations on how the company is intended to be governed. As such, it clearly states the rights and responsibilities of the key personnel including the director, shareholders, and secretary. A copy signed by the shareholders of the constitution should be submitted during incorporation.
Only when all documents required are prepared and ready to be submitted should companies proceed to Singapore’s company registrar, Accounting and Corporate Regulatory Authority (ACRA). Upon receiving the documents, ACRA will issue two official documents – the e-Certificate of incorporation and a business profile. The e-Certificate of incorporation acknowledges the registration of the company in Singapore while the business profile contains crucial information such as the corporate structure, registered address, and other key information. Once the company has received both documents, the company is now registered in Singapore and is legal to conduct business.
With so many legal documents and regulations to follow, business owners often face challenges when trying to incorporate their business. For instance, foreign investors hoping to expand or incorporate in Singapore face difficulties when attempting to find a trustable and reliable Singapore resident to be their director. Furthermore, the preparation of legal documents including company forms under the companies and regulations 2003 and the companies regulation, is a tedious process as all documents have to be prepared per what ACRA requires. The failure to craft a single document accordingly would result in a delay in approval for company incorporation.
As such, seeking an external corporate service provider to aid in the preparation would ensure an efficient and smooth approval, eventually saving the company’s time and money. PikoHANA is an exemplary corporate service provider that provides high-quality services including aiding in the establishment of a nominee director, managing end-to-end documents, and providing their expertise in ensuring a smooth company registration in Singapore.
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