How to set up a Private Limited Company in Singapore
Last updated: March 2024
Setting up a new company in Singapore is the start of an exciting venture. A private limited company in Singapore is the most popular business structure because of the flexibility of setting it up. If you are looking to start a Private Limited company in Singapore, this guide details all you need to know before starting a one in Singapore.
What is a Private Limited Company in Singapore?
A private limited company in Singapore, often abbreviated as Pte Ltd, is a type of business entity that offers limited liability to its shareholders. It is a separate legal entity distinct from its owners, which means that the company’s finances and assets are separate from those of its shareholders.
This structure provides protection for the personal assets of the shareholders, limiting their liability to the amount of their investment in the company. Private limited companies are commonly chosen by businesses due to their flexibility, credibility, and potential for growth.
Any company looking to do business in Singapore should register their business with the Accounting & Corporate Regulatory Authority (ACRA). ACRA is the statutory body that governs how a company should be set up in Singapore under the Ministry of Finance.
A foreigner interested in registering a company in Singapore is not allowed to self-register. It is important to get assistance from a local business registration provider in order to do so.
Here are the basic requirements to start a Private Limited Company in Singapore:
- Approved company name
A minimum initial paid-up share capital of S$1 - At least one local resident director
- A physical office address in Singapore
- At least 1-50 shareholders – which may be an individual or a corporate entity
- At least one company secretary
What are the advantages of setting up a Private Limited Company in Singapore?
Setting up a private limited company in Singapore offers several advantages, including:
- Limited Liability: Shareholders’ liability is limited to the amount they have invested in the company. Their personal assets are protected from business liabilities.
- Separate Legal Entity: The company is considered a separate legal entity from its owners. This means the company can enter into contracts, own assets, and sue or be sued in its own name.
- Tax Benefits: In Singapore, private limited companies are subject to a flat corporate tax rate of 17% on their chargeable income. However, certain tax incentives and exemptions may apply, depending on the company’s size, industry, and activities. Additionally, Singapore follows a territorial tax system, which means that only income derived from or remitted to Singapore is taxable. This can result in significant tax savings for companies with overseas income.
- Credibility: A private limited company is often perceived as more credible and trustworthy, which can help attract investors, customers, and business partners.
- Perpetual Succession: The company’s existence is not affected by changes in ownership or the death of shareholders. It can continue to operate indefinitely.
- Access to Funding: Private limited companies have access to a wider range of funding options, including equity financing from investors and banks, which can facilitate business growth and expansion.
These advantages make private limited companies a popular choice for businesses looking to establish a strong legal and financial foundation in Singapore.
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What do you need to start a Private Limited Company in Singapore?
Approved company name
All companies looking to register in Singapore must select a unique company name. Any name already in use will not be accepted. So it is important to choose your company name wisely.
Your company name must get an approval from ACRA before its incorporation. The name must be easy to read, unique, and devoid of any vulgar or obscene word. There should be no copyright violations when it comes to choosing a company name, nor should there be a trademark infringement issue. ACRA rejects a proposed company name if it is:
- Undesirable
- Identical to an existing company name
- Names or trademarks identical to established names
Some names of companies require special approval from an external authority. This includes specific words, such as media, finance, bank, finance, and education.
After the approval of a company name, it is reserved for 60 days from the date of submission of the application. Following the approval, you are advised to go ahead with the company registration in Singapore within a specified period.
Business activity and corresponding SSIC code
You need to identify the primary type of business activities you plan to do. All of the business activities in Singapore are covered under the Singapore Standard Industrial Classification Code (SSIC) 2010. This is the code that serves as a guideline for the type of business activities you can engage in.
An SSIC code is a number given to categorize a company’s business activities in Singapore. These codes are used by the government for statistics and to regulate certain activities. They help classify and govern companies and their operations.
Memorandum & Articles of Association
In Singapore, the Memorandum & Articles of Association (M&AA) is a legal document that outlines the constitution of a company and its internal rules and regulations.
- The Memorandum specifies the company’s name, registered office address, objects or purposes, and liability of members.
- The Articles of Association, on the other hand, detail the rules governing the internal management and operation of the company, including matters such as share capital, shareholder rights, director’s powers, and procedures for meetings.
Together, these documents form the company’s constitution and provide the framework for its governance and operation.
Shareholder details and agreement
Every company is required to have at least one individual or corporate shareholder and a maximum of 50, to form a Private Limited company in Singapore. The company should have a proper shareholder agreement in place. This is essential to avoid any potential disputes. You can find a template of a shareholder agreement here. Further, a Private Limited company in Singapore must also issue at least one subscriber share to its initial members.
Company Director
A limited company in Singapore must have a director, with a residential address in Singapore. The company director can be a Singaporean Citizen, Permanent Resident or on an Entrepass work visa or Employment Pass.
A Singapore Registered Address
A company requires a registered address for incorporation in Singapore. This is the physical address where all official correspondences are sent. The registered address cannot be a P.O. Box.
Incorporation Certificate
One crucial step in starting a Private Limited company in Singapore is to file the incorporation request and get ACRA’s approval. ACRA sends an email with the confirmation of incorporation along with the registration number. The process can be completed early if the incorporation documents are ready and duly signed by those involved. The email is considered as a soft copy of the incorporation certificate.
A company incorporated in Singapore can purchase a hard copy if needed by submitting an online request to the authority. You will need to pay a nominal fee for this service.
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Company Business Profile
A Singapore company gets the confirmation of incorporation only when it receives an email from the Singapore Company Registrar. The email includes the Unique Entity Number issued by the government to any Singapore incorporated company.
A company can pay a small fee to obtain a business profile with the company name, registered address, incorporation date, registration number, paid-up capital, business activities, and details of shareholders, company secretary, and directors.
A Company Secretary
It is important for a Singapore Private Limited company to have a company secretary within six months of its incorporation. The company secretary has to be an individual who is “ordinarily” a resident of Singapore. A company secretary is an officer with legal responsibilities. They share their responsibilities with the directors for specific tasks as required by the Companies Act.
A Company secretary is responsible for the administration work that helps keep a company compliant with their statutory and regulatory requirements. It is highly recommended to still appoint a Corporate Secretary at the time of incorporation as they help to prepare you to prepare the company documentation such as Share Certificates and First Board Resolution that you would otherwise not receive.
Auditor appointment
Most companies in Singapore qualify for an exemption on conducting a yearly audit. You only need to conduct an audit if your Singapore entity has:
- Total annual revenue > $10m;
- Total assets > $10m;
- No. of employees > 50.
Unless the company has been exempted from audit you every company must appoint an auditor within 3 months of registration.
Allocation of Share Certificates
This is the proof of ownership of company shares. The certificate is proof of the shares allotted to each shareholder. The company secretary is responsible for issuing the certificate.
First Board Resolution
In Singapore, a First Board Resolution is a formal decision made by the board of directors during the initial meeting after a company’s incorporation. It typically addresses essential matters such as appointing officers, authorizing the opening of bank accounts, adopting the company’s seal, and approving the issuance of shares. This resolution establishes the framework for the company’s governance and operations, ensuring compliance with legal requirements and setting the direction for future decision-making by the board.
Bank Account Opening Resolution
A company needs a separate bank account since it is a separate legal entity. The Board of directors sanctions the account opening while specifying the signatories to the account.
During the formation of the company, the choice of a corporate bank account is critically important. With numerous banking options available, the application procedure and banking requirements might vary from one private bank to another.
In order to open an account, you will need:
- The Resolution passed by the BOD sanctioning the opening
- Proof of the incorporation certificate
- Copy of the business profile
- Proof of the Constitution
- Copy of the passport
- Proof of residential address
What to do after registering a Private Limited Company?
Following your company registration, you need to take care of the following:
- Company’s Stamp: The company’s rubber stamp bears its name and registration. Official documents look more credible and professional with the rubber stamp.
- Company Seal: A registered business in Singapore must have a company seal on its legal documents and share certificates.
Further, you would be required to:
Open a corporate bank account
You can open your corporate bank account after registering your Private Limited Company. Prepare your documents for your bank meeting using the checklist below:
- Complete the Corporate Account Opening Form, signed by authorized company representatives.
- Provide a Directors’ Resolution confirming approval for bank account opening.
- Present a Certified True Copy of the Company’s Business Profile from the Company Registrar.
- Submit Certified True Copies of Passport/Singapore IC and Residential Address Proof of Directors, Signatories, and Ultimate Beneficial Owners.
Engage your company secretary to assist with document preparation and potentially act as a signatory, though most banks require at least two signatories present during account opening.
Sleek offers a free Business Account* with every company incorporation.
Set up your accounting and tax
As a private limited company, you have obligations towards ACRA and IRAS filing which require submitting multiple reports annually. Even with no transactions, you must submit annual reports like Estimated Chargeable Income, financial statements, and tax returns (Form C or Form C-S) promptly and accurately to avoid fines and penalties for your company and Nominee director. Hence, it is essential to set up a bookkeeping system for managing the financial affairs of the company or engaging the services of a professional accountant.
Apply for relevant licenses and permits
You would need to obtain one or more licenses and permits depending on the company’s business activities. A newly incorporated company must obtain a license before commencing its business operations. However, a license is not required for all types of business activities. Only a few operations need to secure a license. This includes travel agencies, cleaning, import/export services, restaurants, educational institutes, and financial services.
Apply for GST Registration if required
A company with an expected annual turnover of more than S$1 million must register for GST. The indirect tax is levied on goods and services consumption in Singapore.
A GST-registered company must charge the consumers of your goods and services GST rate of 9%.
Can foreigners register a Pte Ltd in Singapore?
Yes, foreigners can register a Pte Ltd in Singapore. Singapore has a reputation for being business-friendly and welcomes foreign entrepreneurs to set up companies in the country.
However, there are certain requirements and procedures that foreigners need to follow to register a business in Singapore:
- Resident Director Requirement: Foreigners must appoint at least one director who is ordinarily resident in Singapore. This can be a Singapore citizen, permanent resident, or an individual holding an Employment Pass, EntrePass, or Dependant’s Pass.
- Engage a Local Agent: Foreigners are required to engage the services of a professional firm, such as a corporate service provider or law firm, to assist with the company registration process. These firms act as local agents to facilitate the incorporation process and ensure compliance with Singapore laws and regulations.
- Obtain Necessary Work Pass: If the foreign entrepreneur intends to reside in Singapore and manage the business operations, they will need to obtain the appropriate work pass, such as an Employment Pass or EntrePass, from the Ministry of Manpower.
- Comply with Regulatory Requirements: Foreigners must ensure that their business activities comply with Singapore’s regulatory requirements, including obtaining the necessary licenses and permits, if applicable.
- Register with ACRA: The business must be registered with the Accounting and Corporate Regulatory Authority (ACRA), which is the government agency responsible for regulating business entities in Singapore. This includes submitting the necessary documents and paying the registration fees.
Overall, while foreigners can register a business in Singapore, they need to adhere to certain requirements and procedures, including appointing a resident director, engaging a local agent, obtaining the necessary work pass, and complying with regulatory obligations.
Frequently asked questions
What is a Private Limited Company (Pte Ltd) in Singapore?
A Pte Ltd is a business entity with limited liability where shareholders are not personally liable for the company’s debts beyond their share capital contribution.
What are the requirements to register a Private Limited Company in Singapore?
Requirements include at least one shareholder, one director (who must be a resident of Singapore), a company secretary, a registered address in Singapore, and a minimum initial paid-up capital of S$1.
What are the advantages of registering a Private Limited Company in Singapore?
Advantages include limited liability protection for shareholders, eligibility for tax benefits and incentives, enhanced credibility, access to funding, and perpetual existence independent of its members.
How long does it take to register a Private Limited Company in Singapore?
The registration process typically takes one to two days once all required documents are submitted and approved by the Accounting and Corporate Regulatory Authority (ACRA).
What ongoing compliance requirements are there for a Private Limited Company in Singapore?
Ongoing compliance includes holding annual general meetings, filing annual returns, maintaining proper accounting records, conducting audits (if applicable), and complying with Singapore’s tax regulations.
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