What are the key requirements for setting up a private company in Singapore?
How many shares should I have?
You can have as many or as few shares as you wish, although you need a minimum of at least one share. If you don’t know how many you need, we recommend one share per dollar of capital.
What is the difference between ordinary and preference shares?
Ordinary shares typically give you voting rights in company matters, as well as showing how much ownership you have in the company.
Preference shares give the shareholder preferred treatment over ordinary shareholders, for instance with dividends or a priority right to be repaid in the event of an insolvency.
Preference shares are not mandatory when setting up a company – get in touch with us to see if this is right for you.
Why do you ask me to provide 3 company names?
We ask for three names as a worst case scenario in the event that your top choice is no longer available, unacceptable, or too similar to that of an already established organization.
What are the guidelines for naming a Singapore company?
To increase your chances of the proposed name being approved right away, you want to make sure that the name:
– Is not similar/identical to existing company in Singapore
– Is not vulgar/obscene
– Is not already reserved
– Does not contain media, bank, law, finance, or education (as the corresponding external governmental authority may be required to review and approval the name).
Approved company names will be held and secured for 60 days from the date of your application. Also, if you need to extend the name reservation for another 60 days, you may do so by filing an extension just before the initial hold expires.
You may also select a “trade name” that is different from your registered legal name, but there are requirements for the disclosure of the underlying business or company’s true registered name and unique entity number.
I am currently registered as a sole proprietorship – what is the process to convert to a private limited company?
If you would like to keep the name for your private limited company, you must close down the sole proprietorship. Get in touch with us to learn more.
What is the liability of a shareholder?
The liability of a shareholder is usually limited to (1) any unpaid amounts on the shares held by that shareholder, (2) any liability or obligations expressly provided for in the company’s constitution or shareholders’ agreement, and (3) any liability for breach of director’s duties where those shareholders are also directors.
Setting up from overseas
Can a foreign individual or foreign company be 100% shareholder?
Yes! There are no restrictions around foreign ownership when setting up your company.
Does a foreigner need to visit Singapore to establish a company?
No – you can incorporate a company completely online without ever visiting Singapore. However, if you would like to do business in Singapore and want to set up a Singapore bank account, banks generally require two directors (or a director and a company secretary) to be present.
Do I need a local director?
Yes – there is a requirement to have at least one director who is “ordinarily resident” in Singapore – i.e. a Singapore Citizen, Singapore PR or EntrePass holder. You can also be the local director after you have applied and received approval for an Employment Pass or Dependent Pass LOC under this new company.
Is there anyone else I need to appoint?
Yes – every company is required to appoint a company secretary within 6 months of incorporation. We can also help with whole incorporation process. See our pricing plans to learn more.
Do I need to invest $100,000 to register my business in Singapore?
Technically, the minimum amount of paid-up capital to incorporate in Singapore is S$1. However, if you are seeking an EP or other work visas, we recommend investing a minimum of S$100,000 and the EP salary is subject to experience, age and education qualifications.
Can a foreigner relocate to Singapore to operate the new business?
This is possible. If you would like to relocate to Singapore to operate your new business, you will need to apply for an Employment Pass. We can assist in your Employment Pass application – click here.
What type of business address is required?
A local registered address is one of the minimum requirements for opening a company in Singapore. The registered address must be a physical address in Singapore (a physical location and not PO Box).
It is possible to use a residential address as your business address under the Home Office Scheme. However, you must receive approval from the Housing Development Board (for HDB flats) or Urban Redevelopment Authority (for private properties) in order to use residential property (owned or rented) for home office use.
Is it easy to open a bank account in a foreign country after I have incorporated a company in Singapore?
It is a reasonably straightforward process to open a bank account after incorporation. However, many banks do require two signatories to be present when opening an account with them. If we are engaged as your company secretary we can act as one of the signatories, but this usually means that you will need to fly out in order to open a Singapore bank account.
We can arrange appointments with Singapore banks free of charge, and we make our offices available so you can meet them without standing in any queues. These meetings typically take no more than an hour.
How many directors do I need to register a company?
You only need one director to incorporate a company. However, there is also a requirement to have at least one director who is “ordinarily resident” in Singapore – i.e. a Singaporean, PR or Entrepass Holder. You will also qualify if you have applied and received approval for an Employment Pass or Dependent Pass holder (with a Letter of Consent) under the new company.
There are a number of different ways you can satisfy the local resident director requirement:
1) If you plan to relocate to Singapore to run your company, you will need to apply for a work visa of type (Employment Pass, Entrepass or Dependent Pass LOC) under the new entity. Once your work visa is approved, you can act as the local resident director.
2) If you have a local partner or know a trustworthy person in Singapore who is willing to act as the local director, you can appoint them.
3) EP holders that have received a Letter of Consent to be director for a company which does not employ them: this application for a Letter of Consent for secondary directorship takes around 3-5 weeks to be processed.
Most foreign entrepreneurs and businesses that set up a Singapore company without relocating to Singapore opt for a nominee director service. We offer this service for $1,500/year.
How do I issue new shares or transfer existing shares?
For a new shareholder(s), you will need to send a share capital application letter to apply to issue new shares (if you are issuing new shares to an existing shareholder, you can skip this step). The letter should contain:
– Number/class of shares
– Amount of share capital for the new shares being issued
– Bank details
Subject to the pre-emptive rights stated in the Constitution, we then pass a board resolution and/or a shareholder resolution to confirm the share issue or transfer. Transfers of shares are subject to stamp duty which is payable to IRAS.
For a new shareholder, we also require KYC documents (proof of identity and domicile). If the new shareholder is a corporate entity, we also require the business profile (or equivalent) and proof of shareholding. We charge S$100 per transaction for common shares and S$200 for preference shares.
What is CorpPass?
CorpPass is a login method that allows corporations to complete online corporate transactions with the Government.
What do I need to apply for an Employment Pass?
When applying for an EP for yourself (as the business owner) or a potential employee, you will need to submit 3 standard documents in PDF along with your Employment Pass form:
If I am an Employment Pass holder, can I apply for Singapore permanent resident?
Yes. If you wish to become a Singapore permanent resident, you can apply through the Immigration and Checkpoints Authority (ICA). The application will be assessed based on ICA’s PR criteria.
Is a foreigner required to apply for an Employment Pass if he is registered as a director of a company in Singapore but not a resident of Singapore?
Foreigners who are not residing in Singapore, e.g. Social Visit Pass holders, don’t need to apply for an EP to be a registered director of a company.
How do you renew an Employment Pass?
You can renew your employment pass with us by supplying a copy of your EP, a copy of your passport, your residential address, and your monthly salary in SGD – we can take care of the rest.
Can an Employment Pass holder be a shareholder of a Singapore-registered company?
Yes, an Employment Pass holder is allowed to own shares in a Singapore-registered company.
What if I want to change jobs while I am on an Employment Pass?
You should ask the new employer to apply for a new Employment Pass for you. There is no need to cancel the existing EP before applying for a new one.
Your application will be considered based on its merits and under prevailing guidelines.
Can Employment Pass holders be registered as directors in another company apart from the company the Employment Pass is approved for?
Yes, but only if the EP holder has obtained a Letter of Consent (LOC) from MOM.
We recognise that secondary directorship positions in related companies, e.g. subsidiary, may be critical to the EP holder’s job role. As such, we would generally allow EP holders to take up such secondary roles by granting an additional “Letter of Consent”.
If the secondary directorship position is in an unrelated company, e.g. fund entities, we may still grant the LOC if it is relevant to the EP holder’s primary occupation.
How do I upgrade my S Pass to an Employment Pass?
You will have to submit a new Employment Pass application for your S Pass holder. There is no need to cancel the S Pass while doing so.
You also don’t need to advertise on the Jobs Bank.
Do I have to make CPF contributions for S Pass holders?
No, employers of S Pass holders will not have to make Central Provident Fund (CPF) contributions for them.
Can I start my own business if I am on an S Pass?
No, an S Pass holder cannot be a director or sole-proprietor of a business. If you are an S Pass holder who wants to set up a business in Singapore, you should terminate your current employment and apply for an EntrePass or Employment Pass.
Do S Pass holders have marriage restrictions?
No, there are no marriage restrictions on S Pass holders.
Accounting & payroll
What is GST?
GST stands for Goods and Services Tax. In other countries it is also known as VAT or Value Added Tax.
Do I need to register for GST?
GST registration is only required for companies that can reasonably expect turnover in the next 12 months to be more than S$1 million. However, a company can also voluntarily register for GST if it is under this threshold.
What is ECI?
ECI stands for Estimated Chargeable Income. It is your estimated taxable revenue for the past year.
Do I need to file for ECI?
Some companies apply for an administrative concession which means they do not need to file. If your company has less than $5 million in annual revenue for the financial year, and your ECI is nil for the year of assessment, you do not need to file. Contact us to learn more.