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Singapore Company Incorporation: What are the requirements to register a business in Singapore?

by | Jul 21, 2020 | Starting a Business

Singapore is loved by many tourists and business tycoons. It’s a city with high foot traffic, which is a great factor for those who are planning to set up their businesses here.

Both locals and foreign nationals have the opportunity to start a company anywhere in Singapore, provided that they comply with the Singapore Company Incorporation requirements and conditions of the ACRA.

A lot of factors may affect your business setup and it’s better if you can identify those factors yourself. For instance, if you are a local businessman, it’s easier to establish your company in the city than if you are a foreign national.

You also need to bear in mind the type of entity you want to elect because all the requirements basically rely on what type of business you are planning to put up.

To learn more about incorporating a Singapore company, here are the things you should know:

Executive Summary

Select The Type of Company You Want to Start

There are basically four types of entities you can set up in Singapore:

  1. Sole-Proprietorship
  2. Limited Partnership
  3. Limited Liability Partnership
  4. Company

Sole-Proprietorship

Sole-proprietorship is a business with one owner only. It is not a separate legal entity, meaning, your business and personal liability as an owner are not separate.

You have unlimited liabilities, you can be sued in your name, and you can own a property in your name that you can use for business.

Limited Partnership

A limited partnership is a partnership type with two or more persons acting as partners. Under this entity, at least one should be a general partner and one is a limited partner.

The number of people composing the partnership has no limit. Like sole-proprietorship, this partnership is not a separate legal entity. The general partner bears unlimited liability while the limited partner has limited liability.

This means that the general partner can be personally liable for the firm’s debts and losses while the limited partner is only liable up to the amount of his capital. As partners, you can be sued in the partnership’s name.

Your firm can acquire its own properties but can’t be used for personal purposes.

Limited Liability Partnership

A limited liability partnership, also known as LLP, is a partnership type where all partners bear limited liabilities. To form LLP, at least 2 partners are required.

Like a limited partnership, there is no limit as to the number of partners. This entity is a separate legal entity, which means that your share of firm’s liability is separate from your personal obligations. You can be sued in LLP’s name and you can acquire property in LLP’s name.

Partners will only become personally liable if the liability is a result of their own wrongful activities. You can’t be liable for a partner’s debts and losses.

Company/Corporation

Last but not least is a company or a corporation–a type of business that is legally separate and distinct from its owners or shareholders. A company may be in three forms: an exempt private company, a private company, and a public company.

An exempt private company should compose of no more than 20 members, a private company should have no more than 50 members, and a public company can have more than 50 shareholders.

Under this business entity, members have limited liability, can be sued in the name of the company, and can own property in the name of the company. The company will be liable for the debts and losses, not the member personally.

These four business entities are different from each other and the requirements you need to prepare will depend on the type of entity you select for your business.

description-of-company

Prepare What You Need For The Incorporation of Your Business

Each of the business types mentioned above has different requirements.

For sole proprietorship, the registration requirements are the following:

  • The owner must be 18 years old and above.
  • He/She should be a Singaporean citizen, resident, or an EntrePass holder.
  • If the owner is not a resident of Singapore, he/she should appoint someone who is a Singaporean resident.
  • Self-employed persons are required to top up their Medisave account with the CPF Board before they can register a new business, renew, or be a registrant of an existing business.
  • If the owner has undischarged bankrupts, he/she needs the approval of the Court or Official Assignee before he/she can manage a business.

For Limited Partnership, here are the requirements:

  • The partners must be 18 years old and above.
  • The partners should be a Singaporean citizen, resident, or an EntrePass holder.
  • One partner must act as a general partner, which can be an individual or a body corporate.
  • One partner must act as a limited partner, which can be an individual or a body corporate.
  • If the general partners are not residents of Singapore, they should appoint a manager who is a Singaporean resident.
  • Self-employed partners are required to top up their Medisave account with the CPF Board before they can become a partner of a new limited partnership, renew a partnership, or become a partner of an existing partnership.
  • If the partners have undischarged bankrupts, they need the approval of the Court or Official Assignee before they can manage a business.

For LLP, here are what you need to prepare:

  • The partners must be 18 years old and above.
  • The partners should be a Singaporean citizen, resident, or an EntrePass holder.
  • One partner must act as a general partner, which can be an individual or a body corporate.
  • One partner must act as a limited partner, which can be an individual or a body corporate.
  • One manager who is a resident of Singapore should be appointed.
  • If the partners have undischarged bankrupts, they need the approval of the Court or Official Assignee before they can manage a business.

For Company/Corporation, here are the qualifications:

  • There should be at least one shareholder.
  • At least one director should be a Singaporean resident and at least 18 years of age.
  • Foreigners who want to act as local directors can apply for an EntrePass from the Ministry of Manpower.
  • If the members have undischarged bankrupts, they need the approval of the Court or Official Assignee before they can manage a business.
yearly requirements for business entites

Yearly Requirements for Business Entities

On top of the initial requirements stated above for each business entity, you also need to remember the yearly requirements you need to comply with.

For sole proprietorships and limited partnerships, yearly renewals are required for both one-year and three-year registrations. Self-employed owners and partners are also required to top up their CPF Medisave accounts before they can renew their business.

For Limited Liability Partnerships, an annual declaration of solvency or insolvency is required to be filed by a manager. This should state whether the company is able or not able to pay its obligations during the business’s normal course. The company doesn’t need to comply with statutory requirements for general meetings, company secretary, directors, and share allocations.

For company/corporations (private limited), a company secretary is required to be appointed within 6 months of incorporation. An auditor should also be appointed within 3 months of incorporation unless there is an exemption as to audit requirements. The corporation should also comply with annual returns that should be filed yearly. There are statutory requirements for general meetings, company secretary, directors, and share allocations.

Prepare the Estimated Fees for Your Company Incorporation

You need a couple of Singaporean dollars to register a company in Singapore. You need to prepare the estimated fees depending on the type of business you want to register.

For sole proprietorship and limited partnership, the setup fee to register for a year is $115, of which $15 is for the name application and the $100 is for the registration.

If you want to register for three years, you will pay $175, $15 for the name application and $160 for the registration.

To incorporate a limited liability partnership, you will need to pay $115, $15 as the name application fee and $100 as the registration fee.

To register a company or a corporation, you need $315, $15 for the name application and $300 for the incorporation.

duration of company incorporation

Duration of Company Incorporation

According to the Accounting & Corporate Regulatory Authority (ACRA), the body who administers the process to incorporate a Singaporean company based on the Companies Act, Chapter 50, the incorporation procedure is straightforward. It could only take 1-3 days before you can incorporate your own business in Singapore. Registering a company is hassle-free in this city.

Both locals and foreigners have the privilege to establish their business in Singapore, however, a foreigner can’t self-register the company. He/She will need to authorize a registered filing agent to incorporate the business.

final thoughts on company incorporation in Singapore

Final Thoughts

Now that you have everything you need to incorporate a company in Singapore, start you business plan now. Remember that the requirements and the fees depend on the type of company you are going to select. If you are a foreign national, just make sure that you have a Singaporean representative who can act on your behalf.