Are you ready to turn your business idea into reality in one of the most dynamic economies in Asia?
Many entrepreneurs in today’s fast-paced world of the global economy are looking for new horizons where they can transform their business ideas into reality.
With its strong economy, strategic location, and hospitable environment for business operation, Singapore has been regarded as the ideal choice for company setup.
Setting up a company in this country is an exciting opportunity to explore the dynamic business landscape.
It will lead you through each step that has to be taken in choosing an appropriate structure for a company, right down to its registration with ACRA.
With the right information about the company formation, you will be thoroughly equipped to make a flying start in your entrepreneurial journey and lay a solid success base for your company.
Let’s dive in and read further to know more about each one of these essential steps.
1. Choose A Business Structure
Picking the proper business structure will play a deciding role in choosing the structure for Singapore company formation process. You get to determine who is liable, the taxes that you pay, and operational expenses. Here’s a brief overview of the main options:
-
Private Limited Company
This choice is popular because it holds your liability to a certain extent, so your assets are not at risk from business debts. A Pte Ltd can have up to 50 shareholders and at least one director who resides in Singapore, making it easier for fundraising and investments.
-
Sole proprietorship
Most suitable for small-scale businesses, sole tradership grants full proprietorship rights. It is simple and cost-effective to use, making it a useful choice for freelancers.
-
Partnership
A partnership affords to work in association with others. However, partners can be held personally liable for business debts, so the choice of partners must be worked out thoroughly.
2. Decide On A Company Name
Selecting a company name is crucial as it will identify your brand in the marketplace once your business is up and running.
The name should be easy to remember and simple and something that the target customers can relate to.
Once you have finalized your list, check for availability using the online register at ACRA. It has specific requirements for your name—that your name cannot be too close to a name of the business that already exists or is inappropriate.
Some of the words are obscene, so they are shielded by licenses when necessary. Thus, you must be very careful with some of them.
3. Prepare Required Documents
Incorporation of your company involves filling out all the required paperwork correctly.
You will be required to prepare your Memorandum & Articles of Association outlining the rights and responsibilities of your Directors and Shareholders.
In addition, you will also be required to provide identification documents for all your Directors and Shareholders, such as an NRIC for Singaporeans and a passport for foreigners.
Listing the address where your company will be registered and what type of business it will be is also required. If there is more than one shareholder, it is highly recommended that a Shareholder Agreement be drafted to clearly spell out all the responsibilities and the distribution of profit.
4. Appointing Directors And Shareholders
The election of directors and shareholders is among the last processes that need to be completed with the formation of a company in Singapore.
The current Singapore legislation requires that at least one director of the company be physically present in the country and can be a Singapore citizen, permanent resident or holder of an Employment Pass.
This requirement makes it possible to ensure that you have an office within the region and that compliance with regulatory requirements is observed. In addition, the people who are considered as shareholders must be at least one and a maximum of fifty for a private limited company.
5. Register Your Company
Company registration is a significant incorporation phase.
First, navigate to BizFile+, a website designed for easy application submission. Prepare all the required documents, which include the Company Constitution and identification of the directors and shareholders.
Also, the payment for the registration fee, which usually costs about SGD 300, should be included.
6. Open A Corporate Bank Account
Opening a corporate bank account is an important step in handling your business finances. Locate a bank that will suit your needs and provide services suitable for the size and industry of your company.
To open the account, you will be required to have your Certificate of Incorporation, Company Constitution, and identification documents for directors.
7. Register For Taxes
Registration is essential for compliance and smooth business operations.
You must obtain GST registration if your company’s annual turnover exceeds SGD 1 million. Look into Singapore’s corporate tax requirements, including the filing of annual returns with consequent payments.
8. Comply With Ongoing Requirements
Maintaining ongoing compliance is relevant to the success of your company in Singapore.
You are required to hold an Annual General Meeting, where you will be engaging the shareholders on the performance of the company. Also, filing annual returns with ACRA will keep your business records updated.
9. Obtain Necessary Licenses
Depending on your business activities, you will be required to obtain certain licenses or permits to operate a business in Singapore legally.
Research the regulatory requirements that apply to your industry and ensure that applications for all necessary permits are filed before starting a business.
10. Consider Hiring Professionals
If you do not have personal familiarity with how a company should be set up, you may want to retain the services of a local corporate service provider who could help you with the setup or registration and compliance and tax requirements.
Their vast knowledge and experience will help get everything running smoothly and quickly. They can save you time and prevent many mistakes that would otherwise have occurred, enabling you to build on your business.
Conclusion
The Singapore company formation process can be rewarding and relatively easy if you have the right guidance. You set up the desired foundation for the entrepreneurial venture by choosing the right business structure, complying with regulatory requirements, and by holding ongoing responsibilities.
Whether it is a self-driven approach or enlisting the services of professionals, every step brings you closer to realizing your business dreams in one of Asia’s most vibrant economies.
