How Can Foreigners Set Up A Company In Singapore?

Setting up a company in Singapore as a foreigner involves several key steps, requirements, and decisions about business structure, making it an attractive process for many international entrepreneurs. Here's a breakdown of what foreigners need to know and do to establish a company in Singapore:

Why Foreigners Should Set Up a Company in Singapore

Singapore's favorable business environment, low corporate tax rates, and political stability make it a top choice for foreigners. The country allows for full foreign ownership, so entrepreneurs can own 100% of their companies. Additionally, Singapore's location in Asia and its robust legal framework provide a strong foundation for growth.

Choosing a Business Structure

Foreigners can choose from various business structures in Singapore, including:

1. Private Limited Company: This is the most common choice due to its separate legal entity status and the ability to limit liability to the amount invested.
2. Subsidiary Company: Ideal for larger foreign businesses, it offers similar liability protections as a private limited company.
3. Representative Office: Suitable for foreign companies wanting to explore Singapore's market before committing to a full-fledged business.
4. Branch Office: A branch is part of the parent company and does not enjoy separate legal status, potentially exposing it to risks and liabilities.

Each entity has specific legal, tax, and liability implications, so selecting the right one is crucial based on business goals.

Basic Requirements

To register a company in Singapore, foreigners must meet several baseline requirements:

1. Engage a Local Registered Filing Agent: Singapore mandates that foreigners use a local agent, like a corporate secretarial firm, to submit the company registration application.
2. Local Director: At least one director must be a local resident, either a Singapore citizen, permanent resident, or a holder of certain work passes.
3. Shareholders and Paid-Up Capital: A minimum of one shareholder and a nominal paid-up capital of S$1 are required.
4. Local Address: A Singaporean physical address is mandatory for the company’s registered office.
5. Appoint a Company Secretary: The company must appoint a qualified company secretary within six months of incorporation.

Work Visas for Business Owners

After incorporation, foreigners wishing to live and work in Singapore need the proper visa. The two main options are the Employment Pass (EP) and the EntrePass.

1. Employment Pass (EP): Suitable for business owners who plan to be directly involved in managing the company. It requires a minimum monthly salary of S$5,000 and qualifications such as a degree.
2. EntrePass: Designed for entrepreneurs, innovators, and investors, this pass suits those launching ventures with a focus on innovation. However, it involves more stringent requirements and renewal criteria, such as hiring local employees and reaching certain spending thresholds.

For specialized professionals in tech and similar industries, the Tech.Pass offers another pathway for starting a business or joining corporate teams in Singapore.

Steps to Register a Company in Singapore

1. Choose and Reserve a Company Name: The name should be unique and approved by the Accounting and Corporate Regulatory Authority (ACRA).
2. Prepare Incorporation Documents: These include the company’s constitution, identification documents, and details of directors and shareholders.
3. File for Incorporation: Once all documents are in order, the filing agent submits the application to ACRA via BizFile+, Singapore’s online business portal. ACRA generally processes applications quickly if all requirements are met.
4. Open a Corporate Bank Account: After incorporation, the next step is to open a bank account for business transactions.
5. Obtain Necessary Licenses: Certain industries, like finance or healthcare, require additional licensing.

Challenges Foreigners May Face

While setting up a business in Singapore is straightforward, there are challenges, including:

1. Finding a Local Director: For foreigners without local contacts, this requirement can be challenging. Many service providers offer nominee director services to meet this need.
2. Visa Applications: Choosing between the EP and EntrePass can be complex due to varying requirements and success rates.
3. Understanding Tax Obligations: Singapore’s tax system offers exemptions and incentives, but understanding these can be challenging for newcomers.
4. Compliance: Regular filing with ACRA, keeping updated financial records, and meeting audit requirements are essential for maintaining good standing.

Post-Incorporation Compliance

Once the company is registered, foreigners must adhere to Singapore’s compliance requirements:

1. Annual General Meeting (AGM): The company must hold an AGM each year and file an annual return with ACRA.
2. Accounting and Tax Filing: Singapore companies must maintain proper financial records and file tax returns. While small companies may be exempt from audits, others must undergo annual audits.
3. Employment-Related Compliance: Employers must meet CPF (Central Provident Fund) and other statutory contributions if they hire local employees.

Benefits of Partnering with a Professional Service Provider

To simplify the process, many foreigners choose to work with corporate service providers like us, which can offer:

• Nominee Director Services: Temporary directors for meeting local requirements.
• Corporate Secretarial Services: Assistance with filing, compliance, and record-keeping.
• Visa Application Assistance: Help with obtaining work passes, especially the EP. Working with an experienced provider can streamline setup, ensure compliance, and provide peace of mind.

Conclusion

Establishing a company in Singapore as a foreigner is both feasible and beneficial, thanks to the country's supportive business policies, tax advantages, and strategic location. By selecting the right business structure, fulfilling the regulatory requirements, and leveraging the expertise of local service providers, foreigners can successfully launch and operate their businesses in Singapore.

Your business with our expertise at every stage. We take your services through every phase of your incorporation by supporting you with corporate services.