With a ranking of number two in the world’s ease of doing business, Singapore is the destination of choice for many global investors coming to Asia. The country ranks high for, among other reasons, friendly policies towards incorporating companies. It is one of the friendliest investment destinations for foreigners. Any investor fulfilling the set requirements can incorporate a company in less than two days. What do you require for company formation in Singapore?
A Company Name Approved by ACRA
You must submit your preferred name to the Accounting and Corporate Regulatory Authority ( ACRA) for a search and approval before incorporation. The search is to avoid a conflict with a similar business or trademarked name. ACRA requires that the name submitted for search and approval is unique, not offensive and not currently in use by any other entity. ACRA approves a name within 2 hours. The search fee is SG$15.
State the Structure of Business
You must determine the type of business structure to incorporate. There are 4 main types of companies allowed under Singaporean law. Each has different requirements for company formation.
Private Company
This company has a minimum of 1 shareholder and a maximum of 50 shareholders. It cannot sell shares to the public.
Exempt Private Company
This type of company has a maximum of 20 shareholders. It is exempted by the relevant ministry to carry out business in regulated industries. A corporation cannot be a shareholder in an EPC.
Public Company Limited by Shares
This type of company can have as many shareholders as it can attract, but the minimum number is 50. It may raise capital by selling shares and debentures to the public. It is also required to register a prospectus with the Monetary Authority of Singapore (MAS). The liability of the shareholders is limited to the shares they hold.
Public Company Limited by Guarantee
This type of company is usually incorporated to engage in non-profit activities. The shareholders guarantee to settle the company’s liabilities in case of a default.
Share Capital
ACRA requires a minimum issued capital of SG$1. There are no minimum requirements for paid up capital. You must show the distribution of both ordinary shares and preference shares.
Show the Company’s Directors and Key Personnel
Foreigners who wish to incorporate a company in Singapore must engage the services of a filing agent. The agent will apply for them on ACRA’s online portal, BizFile+ A filing agent ensures all paperwork is in order. It is a consulting service by professional lawyers and auditors knowledgeable in the incorporation process.
Foreigners can own 100% of shareholding, but they have to report to ACRA on significant shareholders holding over 25% of the shares. A foreigner does not have to be physically present in Singapore to incorporate a company, but can leave a filing agent to handle the entire process.
Directors
But a foreigner wishing to be a director must be a resident in Singapore. They must acquire an employment visa or a permanent resident visa. A private company must have at least one director as a resident in Singapore. The director can be a Singaporean citizen or a foreigner. Anyone over the age of 18 years with a clean record and free of bankruptcy can be a company director.
Company Secretary
ACRA requires a company to have a Company Secretary for incorporation. A filing agent can act as an interim Company Secretary. But a company has to appoint a substantive Company secretary within 6 months of incorporation.
Company Auditor
A filing agent can also act as an interim Company Auditor until incorporation. The company must appoint a substantive Company Auditor within 3 months of incorporation.
Managing Director/Chief Executive
A company can state its Managing Director or Chief Executive, but this is not mandatory for incorporation.
Registered Office Address
You must show a verifiable address in Singapore. You can use the filing agent’s address for incorporation correspondence. The Home Office Scheme allows some types of business to use a home office. These businesses are mainly small service and consulting businesses like website design.
Company Constitution
ACRA requires a company constitution for incorporation. The constitution spells out the key characteristics of the company, governance rules and regulations. It also details how the company will carry out its operations. The constitution also spells out the rights and responsibilities of different parties; shareholders, directors and company personnel.
Company formation takes less than 3 days when everything is in order. ACRA processes everything fast online on the BizFile+ portal. The ease of doing business is one reason for coming to Singapore, but there are more reasons.
This South east Asian business hub has everything an investor looking to build a global brand would want. There are world-class infrastructure and facilities, skilled personnel, and high corporate governance standards to make a truly global brand.
