Company Incorporation Policies in Singapore
Much has been said about Singapore, its financial stability and why entrepreneurs should set up their business in the country. The city-state’s wealth is known to many people and it’s one of the obvious reasons why Singapore stands out from the rest of the countries in Asia that are also in the list of prime locations for investments. Apart from the numerous benefits of doing business in Singapore, entrepreneurs can also benefit from easy incorporation process in the country.
If you’re someone who’s wondering just how easy it is to incorporate your business in Singapore and you want to find out what policies are surrounding the incorporation process, then read on. Enterprise Assurance PAC has listed down the general process of company incorporation in Singapore as well as some important incorporation policies that you need to know as a business owner. Knowing the step by step process is paramount not only because it will speed up the process of incorporation, but it will also allow you to avoid unnecessary fees and delays.
Incorporating your company in Singapore can take a minimum of one day to a maximum of seven days provided that you have submitted the complete set of requirements.
Incorporation Process in Singapore
Singapore ranks second in the world when it comes to ease of doing business so they must live up to people’s expectation when it comes to the simplicity of their incorporation process. Although the laws are very stringent, Singapore requires foreign business owners to seek the help of company incorporation firms like EAPAC to assist them in their company incorporation process. This streamlined approach is not only very effective, it also means little to no red tape and lower number of fraudulent organisations being able to penetrate the Singaporean market.
When incorporating your business, you must:
Step 1: Understand Singapore’s Business Structure
Singapore has unique business structures bounded by different set of rules. Foreign investors need to know what type of business entity they would incorporate so they will know their limitations and restrictions. Local and foreign individuals usually prefer a Private Limited Company style because it can protect them and their shareholders in case the business go bankrupt. EAPAC has enumerated other business structures you can review in order to aid you in your decision-making process.
Step 2: Seek Approval For Your Business Name
The next step is to seek the approval of the Accounting and Corporate Regulatory Authority (ACRA) for the name of the company you would like to establish in Singapore. Company names cannot contain vulgar words and should not infringe on any trademarks.
Step 3: Understanding Compliance Requirements
The success and the timeframe of your company incorporation rely on the compliance requirements you need to prepare and submit to ACRA. Bear in mind that the requirements for local entrepreneurs and foreigners are different even if they are applying to incorporate a business with the same structure.
Step 4: Opening Bank Accounts
Before your business can commence operations in Singapore, you must apply and open a Singaporean bank account. Investors have at least 125 commercial banks to choose from in Singapore and the good news is that 96% these banks are foreign-owned.
A. Applying for Business Licenses
Business owners are required to get necessary licence after their company has been incorporated. Your incorporation service provider should be able to give you an advice should your business needs a certain kind of license. Examples of business activities that require a business license(s) include restaurants, educational institutes, travel agencies, financial services, and import/export of goods.
B. GST Registration
Your company will only be required to register for GST if its projected annual revenue exceeds S$1 million. GST is more commonly known as Value Added Tax (VAT) or Sales Tax. Companies that are GST-registered will need to charge this 7% tax to their clients on the goods and services provided and in turn remit this amount to the tax authorities.
C. Annual Filing Requirements
Once your Singapore company has been incorporated, the Singapore Companies Act mandates certain annual filing requirements and formalities. The following annual statutory compliance requirements apply to Singapore branches of foreign companies: ECI Filing, Preparation of Financial Accounts, Audit of Financial Accounts, Annual Filing of Accounts and Income Tax Return Filing.
Incorporation Policies You Should Not Forget
A. Business owners may need prior approval of governing bodies that oversee certain industries before they can proceed with the reservation of their business name.
B. All of the incorporation steps can be done by the chosen company incorporation firm except for opening a Singapore bank account where the business owner is required to appear before the bank authorities.
C. Foreign investors are not required to obtain any special Singapore visa if they just want to incorporate a private limited company but have no plans to relocate to the country.
D. Government approval is generally not required for foreigners and 100% foreign ownership is permitted except for banks and other financial institutions, which require approval from the Monetary Authority of Singapore (MAS).
E. Investors are free to operate their company from overseas but those who are planning to relocate to Singapore to operate a company are required to obtain an Employment Pass or Entrepreneur Pass type of work pass.
F. If your business will operate in the sectors of entertainment, finance, education, beer and cigarette production, insurance, banking and stock broking, several business licenses from different authorities may be needed.
G. If you want to claim government incentives and assistance, you should plan the process of taking grants at the time of registering your company in Singapore in order to get better and faster government support.
H. You can already claim tax exemptions while you’re incorporating your company in Singapore.
These are the step by step procedure of incorporating your business in Singapore as well as some policies that are worth noting down. There is no reason why you shouldn’t start a business in this wealthy, rule following, well-functioning, modern and honest country. In order to assist you better, you can also download our eBook which has more detailed steps and information about doing business in Singapore.
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