Singapore has grown into a developing financial centre that serves both the local economy and also the Asia Pacific region, and even the wider world. In addition, the country has been successfully regarded by key financial institutions and industry players as an ideal base to penetrate the markets. Its location is indeed in the heart of Asia Pacific, and that makes many foreign entrepreneurs want to establish a company in Singapore. Here in this article, we will give you information about how to set up a company in Singapore. Let’s keep reading!
Why Do Entrepreneurs Want to Set up a Company in Singapore?
Singapore is well known for its ease of doing businesses there. It also has one of the world’s simplest and most rational tax systems. It raises no tax on capital gains or on dividends received fro
m a business. It makes the country particularly attractive to entrepreneurs who want to build a new business.
Other than that, the country has a well-developed free market economy based on primarily trade, finance and manufacturing. The services account for 75% of the country’s GDP and employ 80% of its workforce. In fact, Singapore has managed to achieve a very low unemployment rate while maintaining low inflation.
The country allows a foreigner to own 100% of the stock of a Singapore incorporated company. You do not need any local partners or shareholders. It somehow enables you to start a company with the type of capital structure which you desire and distribute its ownership to suit your investment needs.
Moreover, there are no restrictions on the amount of capital that you can bring from your home country to invest in your company in Singapore. No surprise to us that many foreign entrepreneurs want to know how to set up a company in Singapore. When they do, they start planning to establish their own companies there.
How to Set up a Company in Singapore?
The foreign companies that are wishing to register a Singapore branch office are advised to engage the services of a professional corporate services firm in Singapore. There are some administrative matters that you need to fulfill during the incorporation process:
- Name. The name of the Singapore company must correspond to the name of the foreign company
- Officers. A Singapore office must appoint at least 1 authorized representative who is a Singaporean resident, Singaporean citizen, a permanent resident, or a foreigner who has been issued an employment pass. Furthermore, foreign companies that plan to relocate one or more of their staff members from the head office to Singapore, can apply for an employment pass for such individuals after the office is registered.
- Constitution and Activities. The shareholders, structure of the company and its activities are directed by foreign’s constitution. There is no separate constitution for the branch office.
- Registered Address. A Singapore branch office must have an address in Singapore. As required by Singapore Companies Act, the office must mention its name and the place of incorporation on all its business correspondence and also outside its place of business in the country.
There are required documents that you should prepare for the registration. What are these? Let’s check them out!
- A certified copy of the Certificate of Incorporation of the foreign company
- A certified copy of the Constitution of the foreign company
- Particulars of the directors of the foreign company
- A memorandum of appointment and details of at least 1 person resident in Singapore who will act as the authorized representative for the Singapore branch office
- A memorandum executed by or on behalf of the foreign company stating that the powers of the local authorised representative
- The details of registered office address in Singapore
- The latest audited financial statements of the parent company, if required to be prepared in the parent country.
Keep in mind that any documents which are not in English, must be translated in English before the submission. However, if you hire the service firm, you may need to submit additional documents if any.
After preparing the documents, you have to understand the registration and timeline procedure on how to set up a company in Singapore. The company executives from headquarters are not mandatory to make a physical visit for the registration process. The process consists of two basic steps, which are: name approval and entity registration.
The name for the Singapore branch must be the same as that of the parent company. It will generally be approved unless it is identical to any existing company name or is vulgar in nature. If the necessary documents are well-prepared and no delays in the name approval process, the registration on how to set up a company in Singapore can be completed in 1 or 2 days.
After that, the company registrar will send an email notification confirming the registration of the Singapore branch. The registrar no longer issues any hardcopy certificate, unless specially requested by the company through a separate application of the entity application.
The email notification is sufficient in Singapore for all business matters, such as bank account opening, signing an office lease agreement, and other important matters.
When your registration has been successfully completed, you can open a corporate account in any of the several international and local banks in Singapore. The account opening procedure may vary from one bank to another and some banks require the directors or agents to be present in person while opening the account.
Moreover, the Singapore branch office is considered a non-resident company for tax purposes. Non-resident companies are not eligible for tax benefits resulting from available tax incentives and tax treaties meant for resident companies. For your knowledge, the Singapore corporate tax rate is at 17%.
Based on the Section 373 of the Companies Act, a foreign company requires to file its Annual Report and the audited accounts of its Singaporean branch office within two months of its Annual General Meeting, or within 7 months from the end of its financial year whichever is earlier. In addition, each Singapore branch requires to file a Tax Return on an annual basis.
If you are curious on how to set up a company in Singapore, you can read this article and start having a plan on establishing a business there. In conclusion, it is encouraged for you to set up a business in the country, because of its business-friendly environment, its benefits and the tax privileged. Therefore, you should start planning about what business you should establish and prepare everything to get a successful one in the future!