How to Open a Company in Singapore – The Complete Guide

The pros of opening a company in Singapore

Singapore is a safe, pro-business environment supported by a well-respected government with transparent and consistent policies that protect companies physical and IP investments.

There is minimum red tape when doing business in Singapore and it is one of the least corrupt countries in the world. It also a well-developed infrastructure that meets all the needs of the business industry and is ranked as one of the top countries in the world for its infrastructure capabilities.

Singapore is an ideal location for global businesses to site their headquarters. Strong trade and investment ties make Singapore one of the most competitive Asian countries and one of the world’s easiest places to do business.

By situating your international headquarters in Singapore, your company will benefit from the following advantages:

• Singapore has a low corporate tax rate compared to other leading economies in the world. A company is taxed at a flat rate on its chargeable income and with effect from the year 2009 (YA 2010) onwards, the corporate tax has been reduced to 17%. Also, capital gains are not taxable in Singapore;
• Singapore-based startups are eligible for the tax exemption scheme receiving a 75% exemption on the initial $100,000 of taxable income for the first three years, followed by a 50% reduction in the current corporate tax rate for the subsequent $100,000 of taxable income. To determine if your company qualifies for this exemption, you can reach out to your agency for confirmation.
• Singapore signed over 90 comprehensive Double Taxation Avoidance Agreements;
• Singapore has numerous free trade agreements, along with bilateral investment treaties and investment guarantee agreements;
• Singapore enforces its robust intellectual property laws rigorously to safeguard the ideas and innovations of its companies.;
• Financial assistance from the government has rolled out numerous initiatives and programs to enable new entrepreneurs to gain access to capital or funding. These funding initiatives include cash grants, government-aided equity financing schemes, business incubator schemes and, debt financing schemes. Start-ups can raise their funds through these programs under Startup SG

The cons of opening a company in Singapore

Singapore has been steering its local workforce towards higher-value occupations like finance, biochemistry, and industrial engineering through education and propaganda. This creates a restricted labor pool in the hospitality, F&B, tourism, and retail sectors.

The only way to fill this void is to accept an influx of immigrants willing to work in such positions. Simple supply and demand and thus result in higher foreign worker levies and quotas, thereby increasing the cost of labor for small businesses.

In addition to high labor costs as highlighted above, land costs in Singapore are high due to very limited country size and strategic port location. It is expensive to buy as well as rent land space in Singapore.

Renting an office, building a semiconductor factory, or even renting a retail shop space can be costly as compared to neighboring Asian countries.

Singapore also does not have natural resources and depends intensively on the importing of raw materials and ready-made products from other countries. This eventually, brings up living costs and the cost of goods sold thus contributing to overall costs.

How to set up a Singapore a company without living or even going there

All Singapore company incorporation formalities (as well as work permit formalities, if applicable) can be handled without you having to visit Singapore.

You will just need to engage a professional agency and discuss all the details by email or phone with them. Then send all the necessary documents (see below for details).

You can then receive the final documents at any place and send the original signed documents by any international courier service to the agency.

Foreigners who wish to incorporate a Singapore company may take into consideration the following points:

• You must engage a professional agency to register a Singapore company as Singapore law does not allow foreign individuals or entities to self-register a company;

• There is no requirement for you to obtain any special Singapore visa if you just merely want to incorporate a private limited company but have no intention or plan to relocate to Singapore. You are free to operate your company from overseas as well as visit Singapore on a visitor visa whenever you are required to attend to any company matters on a short-term basis.

  However, you must keep in mind that in such circumstances, you will need to find a local director since it is mandatory that each company has one local director. Most of the professional agencies offering Singapore incorporation services often offer the services of a nominee local resident director for this purpose;

• If you plan to relocate to Singapore to operate your company, you are required to obtain an Employment Pass or Entrepreneur Pass type of work pass. Once you have obtained your work pass, you can act as the local resident director of your company.

All the documents you need to register a company in Singapore and the procedure for opening it

The procedures to register a company in Singapore is as follows:

1. Pay the incorporation fee to the professional agency;
2. Choose a name for your new company;
3. The agency will check the name availability in Singapore;
4. Provide your passport copy, an official copy of your residential address proof (for example, a utility bill), and filled up a questionnaire form with standard questions such as your address, passport number, and name of directors and shareholders (if you plan to open the company alone, you can be the sole director and shareholder);
5. For a simple company structure, unless you have special requirements, the above mentioned documents will be sufficient for your agency to prepare the necessary company incorporation paperwork,which will be sent to you via email for signature.
6. Upon receipt of all the original signed incorporation documents including the notarized passport copy and residential address proof via international courier service, the agency will proceed to incorporate the company online;
7. The timeline for the whole process of incorporation (from collecting documents until online incorporation) should be approximately 5 working days.

The total cost of registering and maintaining a company in Singapore

First of all, you should choose a Singapore company formation package:

Local Entrepreneur: This package is suitable for entrepreneurs who wish to set up a Singapore company and have their own local Singapore Director.

Foreign Entrepreneur Without Relocation: This package is suitable for foreign entrepreneurs who wish to set up a Singapore offshore company but don’t plan to relocate to Singapore.

Foreign Entrepreneur With Employment Pass: This package is suitable for foreign entrepreneurs or professionals who wish to form a Singapore company and relocate to Singapore to run their company operations. You must have a degree and/or relevant working experience to set up a business and apply for the employment pass.

For a client who would like to engage nominee director services, it is very important to appoint a competent person to act as the local director of your Singapore company. A wrong choice in the appointment may bring dire consequences to the company. Most professional agencies offering Singapore incorporation services often offer the services of a nominee local resident director as well.

Below you will find the package fees for Singapore Company Incorporation / Singapore Subsidiary Incorporation (in Singapore Dollars, SGD).

Note that, at the moment of writing this article, 1 USD is worth around 1.35 SGD.

Also, note that prices in the table exclude the Goods and Services Tax of 8%, which must be collected on behalf of the Singapore Government. This GST rate will be increased to 9% with effect from 1 Jan 2024.

Here are the package fees:

*If you can provide a local Singapore address as the registered address of the company, the fee will not be applicable for the local entrepreneur package.

**A Virtual Office Service is needed to receive the bank tools, future bank statements, or other documents. Received documents will be opened and scanned to the client via email on a daily basis.

Here are the maintenance costs for Singapore Company from second year onwards

* If you can provide a local Singapore address as the registered address of the company, the fee will not be applicable for the local entrepreneur package.

Besides this, a Singapore Company is required to prepare management accounts and submit the audited report (certain companies’ status are exempted from audit, check with your agency) to the Inland Revenue Authority of Singapore (IRAS) once a year.

The first tax return will be issued by IRAS within 18 months of incorporation.

A decent agency will also offer you accounting, auditing, and taxation services. This will come with a cost and prices may vary as they are based on the number of invoices you produce, among other factors.
You can easily get the quotation from your agency, agree on the price, make your payment, and email all your business transaction documents to the agency. The agency’s accountant will handle all the accounting work, arrangements for the audit, and tax filing for you.

How to open a multi-currencies business bank account in Singapore

Singapore banks follow the international standards of risk management. This means that before enrolling you as a customer, they will collect some specific documents aimed at complying with anti-money laundering laws.

These might include documents (in English) such as the following::

• Reference letter from your bank (personal bank account)
• Employment contract
• Work attestations and/pr professional certificates (if any)
• Curriculum vitae
• Business plan

If you already run a business, they might also require additional documents as business proof, such as:

• Certificate of Incorporation
• Business Registration Certificate
• Business card
• Annual tax return
• Documents that prove you are conducting an active business, such as invoices related to sales or purchases

In order to open the bank account, you may choose to have a video call meeting with the banker instead of visiting Singapore. For a small fee (500 SGD), your agency can assist with the bank account opening process.

Just remember to have your passport and residential address proof ready.

If you aren’t a resident in Singapore and want to open a business account without all the hassles of the traditional banks, you can open an account on a like fintech like Aspire or a digital bank like Anext Bank. It’s fast and can be completed online.

Note that you may also opt for an off-shore bank account (for instance in Cyprus) without even visiting Singapore. In this case, I suggest that you discuss the pros and cons of this strategy with the incorporation agency of your choice.

Frequently asked questions

Are you looking for an agency that can help you to set up your Singapore company?

If you want to have the contact information of an honest agency that can help you to register and manage your company, just send us a message using the following form:

p.s. Note that we receive hundreds of emails every day and, sometimes, we can’t reply fast. At the same time, we assume that you want to get this info ASAP, so we’ll also forward your message to the agency we recommend. In this way, they can get in touch with you much faster!

Photo Credits: Singapore by Christopher Chan