Key Steps in Setting Up a New Company in Singapore
The second step is to reserve your company name. The Business Registration Act requires every Singapore-incorporated company to have a name. A business name which is the same as (or similar to) the name of an existing company incurs an offence by fusion of sections 27(b)(i) and (c) of the Business Names Registration Act if that existing company is neither a holding company by re-registration of a foreign company nor an entity that the existing company shall represent. Certain characters and words cannot be used without the consent of the Minister of Finance. The consent shall be given at the express request of kindred family members. If the application for incorporation or reservation of business name is not commenced within two months after the date on which the Business Names Registration Act will contact the Assister and price the Minister of Finance in order to register.
Firstly, decide on the type of company you want to set up in Singapore. Please take into account that the key considerations to take into account when deciding on the most suitable business structure in Singapore are the nature of the activity to be carried out, the liabilities and method of taxation of the company. These are only a few of the issues to take into account and our company formation specialists in Singapore can offer more information.
When starting a company in Singapore, you have to follow several key steps: decide on the type of company you want to set up, reserve your company name, register your new company, familiarize yourself with the regulatory obligations of a newly-formed company, and acquire the permits and licenses the company may require. This article will provide you with the essentials of each of these steps and will help you get ready to operate in compliance with the local laws in no time.
Determine the Type of Company
– Limited by Guarantee offers limited liability to its directors and members. This type of company is used by non-profit or charitable entities. Either the said association secures the approval from its members for the limit of their liabilities, or the firm secures such an undertaking from the association’s lender.
– A Limited Liability Company differentiates itself from other companies by its incorporated limited liability. The companies which incorporate private limited by guarantee are non-profit by nature and they are mostly used by trade associations, social clubs, or welfare organizations.
– A company is a legal form for a separate entity. As a company, it is separate from its directors, shareholders, and other members, and it has certain features that make it different from other forms such as a natural person or legal entity. A company is also referred to as an incorporated company, to distinguish it from a sole proprietorship, partnership, or limited liability partnership that have not been incorporated as companies. Incorporated companies are required to have limited liability. Try to apply for incorporation of a new company with the Accounting and Corporate Regulatory Authority (ACRA). It must file required statutory documents and register. Additionally, it must also have a constitution (or Memorandum and Articles of Association) which will govern the operation of the company and define the rules and responsibilities of the company’s directors, shareholders, and other members.
The first thing to decide when setting up a new company in Singapore is its type. A Singapore business entity might take one of several legal forms, each of which has its own unique features, requirements, and responsibilities.
Choose a Company Name
The business name should also be checked against the list of identical or similar names in the same industry on the BizFile website. This list is an indicator of pre-existing companies which may object to the new company having a very similar name, and includes all companies incorporated in Singapore or having branches in Singapore. The company name should not infringe any existing trademarks or intellectual property rights. It is advisable to look for international and local trademarks at the Intellectual Property Office of Singapore, or consult a professional for research. The Accounting and Corporate Regulatory Authority (ACRA) website with the reservation system for business names is available online 24 hours a day. ACRA charges S$15 per company name search and S$15 per company name application for reservation. A business name reservation lasts for 60 days. If a name has not been approved within 60 days, you must apply and pay the reservation fee again.
If you have a good idea and some funding for your Singapore-based business, you can now start laying the foundations and setting the process in motion. The first steps will probably seem challenging, long and bureaucratic, especially if you are not clear about what to do and when to do things. In the course of the years, we have helped over 1,000 foreign companies in setting up companies in Singapore or shifting their business to Singapore. There are several steps to choose a suitable company name. The Accounting and Corporate Regulatory Authority (ACRA) must approve the proposed name before the Singapore new company incorporation process can complete.
Register the Company
The name must be approved first before the company can be registered. There are some guidelines you must adhere to, including the following: The name must be approved before the company can be registered. There are some guidelines you must adhere to, such as: the business name must not be identical to any other company business or web address, where the difference would be the word “Limited” or “Private Limited”. It cannot contain any words that are assessed as vulgar by the authorities or are profane or contain language that is of an offensive nature or against a legitimate governmental interest. You can check the available business names in Singapore online (while applying for approval and registering the company).
The EntrePass is available for foreign entrepreneurs looking to establish and operate a new business in Singapore that is innovative and has the potential to create local employment. The criteria demanded for such a visa are high, and it should be your lawyer who manages and prepares the preparation of all necessary documents and guides you throughout the process. You have to establish a company within 30 days of being notified that you have been granted an EntrePass. You must submit a request or register the company, obtain approval of the name of the company, and then complete the registration of the company in Singapore.
Obtain Necessary Licenses and Permits
Key licenses and permits govern many aspects of everyday life in Singapore. You will need to apply for them if in your operations whenever it applies, such as if selling alcoholic beverages or operating a restaurant with outdoor tables, in the field of services, import, or manufacturing industry, in construction, finance, company incorporation, or business operation in other industries. Without such permits, regulatory authorities can impose fines, and not maintaining them can lead to potential business liability. Don’t miss checking what licenses and permits you need for your business activity. Different activities may be subject to different legal requirements. For instance, construction permits and location-related permits are not necessary for every business. Similarly, one is often required to get insurances such as health and safety or disability insurance for employees of some activities. In addition to setting legal compliance with the required policies/standards specified by the law, getting a specific license and permit shows a level of professionalism necessary to achieve and maintain customer’s trust by implying the company’s seriousness.
Some activities linked with your business operation might require specific licenses and permits to be acquired. Singapore’s business-friendly policies and the availability of government funds leave opportunities to easily apply for them and get fast approval by competent authorities. Keep in mind that without the necessary licenses and permits, you cannot operate your business.
Set Up a Business Bank Account
If you are looking to operate cross border payments, you may want to consider a bank like Citibank that allows for fast cross border payments that are understood through their electronic or SWIFT network. Moreover, if you are looking to do credit card transactions from your customers, also clarify with the bank about the fees of this service as well. Do take note that the owner, director or shareholder of the company is required to be physically present for the opening of the bank account. Efficient communication with the several stakeholders is essential for the successful set-up of a business in Singapore. It can be costly and time-consuming to waste any time or resources. Hence, invest some preparation time into the business set-up in Singapore. Engaging a corporate service provider can certainly lift part of the burden away – but not without a cost. At Severs Associates, we are eager and prepared to help in the difficult process of setting up a company in Singapore.
After the Certificate of Incorporation is issued, open a business bank account for your newly set up business. To do this, you will have to present a completed Corporate Account Opening form together with supporting documents. You may request for the same during the incorporation of your company. Some banks allow for the Account Opening Forms to be completed (online or physically) on the same day. In general, having a physical presence in the bank would speed up the process of opening a bank account. You should also inquire about the many different types of business accounts, products and services that the bank has to offer your business. Some key considerations are the minimum deposit and average balance of these accounts as well as the transaction costs offered. Also, examine the different business accounts offered by the bank.
Considerations for Setting Up a New Company in Singapore
The foreign entrepreneurs who wish to set up a new company in Singapore need to be aware of the applicable immigration requirements which need to be met during their stay in Singapore as the process of setting up the new company. Otherwise, the business trip might have unintended consequences. Following, we will elaborate on the considerations mentioned above which the foreign entrepreneur should take into account prior to setting up a new company in Singapore. The company incorporation itself will be discussed in the subsequent sections. The key restrictions applicable to the foreign director who wishes to set up a new company in Singapore refer to the immigration requirements. According to the Immigration Act, a foreigner cannot operate a business in Singapore. This means that if a foreign non-resident is involved in the process of setting up a new company in Singapore in terms of making decisions and performing actions which are reserved for the company directors, the actions might be classified as non-compliance with the provisions of the Immigration Act.
Considerations for setting up a new company in Singapore. Foreign entrepreneurs who wish to set up a new company in Singapore should be aware of and take into consideration several important aspects before the company incorporation. By making informed decisions, they will be able to manage their expectations and optimize the process of setting up a new company in Singapore. The considerations which need to be taken into account by the foreign entrepreneur prior to setting up a new company in Singapore as a director without a valid Employment Pass are the following: restrictions applicable to the foreign director, ability to relocate to Singapore, and visa options applicable to the foreign director. The key restrictions applicable to the foreign director who wishes to set up a new company in Singapore refer to the immigration requirements.
Understanding the Legal and Regulatory Framework
Deliberate on the company’s documents and agreements. The roles and responsibilities of company officers are governed by the Company’s Constitution. It is used to illustrate the decision-making process at the company’s meetings, and a key component of the Constitution is the Articles of Association. This constitution and some other essential agreements in most quick-set up company packages you are checking out can be modified as your requirements evolve. To properly control the transfer and management of a person or a company’s secretarial representatives, you must assign other company secretaries to sign an agreement that includes any terms of service that differ from the industry’s standards. Tackle internal governance. All companies, including those set up by foreigners, must maintain their records to assess their compliance with regulatory and legislative requirements with industry standards and plans. As such, all transactions in which the company is directly or indirectly involved in must be reported in a minute.
Getting a handle on the legal and regulatory framework is a very crucial step when you start Singapore company registration. As a matter of fact, understanding the statutory and compliance requirements that accompany the process will smoothen the process significantly. However, it is not the most interesting part of setting up a new company, but it is one of the most important steps that you will have to complete. There is a statutory framework to follow and it comprises the creation of both manuals and forms that will be used when you start setting up the company. Here’s an overview of these statutory and compliance requirements and their associated procedures to make things easier for you. To complete the process of setting up the company legally, several statutory requirements need to be addressed and met. Don’t worry; our experts will provide you with an extensive guide to help you get started.
Tax Considerations
On 1 July 2017, the Inland Revenue Authority of Singapore (IRAS) fine-tuned the Singapore transfer pricing norms. The Supplementary Transfer Pricing Guidelines introduce improved description of documentation requests and specified material thresholds to simplify Singapore’s benchmarking specifications. The Singapore Inland Revenue Authority meets the threshold requirements for Corporate Income Tax (CIT) Compliance by peer-reviews corporations, assessing the risk, industry positioning, assets and functions, nature of transactions, and related parties. IFIC Better Reporting updates the tax environment to help clarify the new transfer pricing rules, explicitly a directive in the management and oversight of updated transfer pricing principles and processes, including better systems, benchmarks, and some clear instructions and counterparties.
Singapore has a territorial tax system. Foreign-incorporated companies are only taxed on Singapore-sourced income. Singapore-sourced income entails either the payment of services performed, goods imported, services and facility management used outside of Singapore, or issued by the management from separate Singaporean establishments, passes, sales of assets and rights in Singapore, where the gains had no obligation to arise from trade or business operations performed through a permanent establishment in Singapore, specified income of a non-resident entertainer or producer obtained from performance in Singapore, and income that obtains supplies of funds from a Singapore-based permanent establishment or supporting Singapore-based fixed workshops.
Hiring Employees and Managing Human Resources
It is important to mention that compliance standards are increasingly complex and can involve significant costs. Data privacy should be taken into account, and sensitive personal data should be handled only by people who really need it to do their jobs, and it should not be retained by the employer if there is no longer a need for it. Special consideration also needs to be given to your e-commerce and website structure as data collection standards are very strict in Singapore, and non-compliance could result in heavy fines. Finally, it is important to ensure that all employees are aware of compliance in this area.
Human Resource (HR) consulting and payroll solutions can be outsourced to avoid the administrative management and legal obligations associated with employing staff. Most companies outsource their payroll, typically using the company that sets up the accounting system and processes payments to the Inland Revenue Authority of Singapore (IRAS) and employees’ wages.
Hiring employees in Singapore is relatively straightforward compared to many other countries in the world. Once your company is set up and you obtain an employment pass, you can begin hiring. The Ministry of Manpower clearly lays out how to comply with employment laws, but HR, training, and onboarding can be involved and time-consuming activities. It is recommended to have a clear hiring strategy and a training plan including product, sales, and customer service skills, as the costs of wrong hires can have a significant impact.
Intellectual Property Protection
Intellectual property protection can help you develop a range of useful and marketable products and services. When correctly used, patents, copyrights, trademarks, and trade secrets can provide your company with many benefits. One of the key benefits of intellectual property protection is that it helps your business to protect its financial investment in research and product development. Once you have fully defined your business concept and it’s properly teased out, take steps to protect it through an intellectual property strategy. Ensure that your startup is doing things legally, so that you do not unknowingly infringe on others’ intellectual property rights. Businesses should properly identify and protect all of their IP before filing for patents and other rights in multiple countries using the priority of its first-filed application. Doing so will prevent competitors from securing patents and other rights worldwide first.
Intellectual property (IP) protection is another key consideration for anyone in the process of setting up a new company. Think of IP protection as another layer of protection; it is often overlooked by businesses but critical to startup success. Patents, trademarks, copyrights, and trade secrets, among others in the intellectual property portfolio, are vital to your competitive advantage. With a well-considered intellectual property strategy, you can avoid costly mistakes in the future. By protecting your intellectual property, you’ll also be in a stronger position to raise investor funding since investors are more likely to invest in companies that have taken the necessary measures to protect their ideas and new products. And if you decide to sell your company, patents will help you maintain stronger bargaining power in negotiations.
Access to Funding and Government Support
In Singapore, start-ups that are earning a profit can raise capital through various government-provided tax incentive schemes. Under these schemes, entrepreneurs and businesses can take advantage of the absence of corporate tax for start-ups in an environmental, friendly and tax-efficient way. For example, the Start-Up Companies Programme and the Singapore Economic Development Board have worked with private investors to set up the Corporate Investment Fund. Here, private investors who also spend money on a base fund will benefit from the Entrepreneur start-up Firm, for starters, from a two-dollar foundation for each three-basis capital invested in an approved technology company.
Incorporated start-ups and SMEs that seek funding, which are able to take advantage of the support schemes and initiatives offered by the Singapore government, benefit from the financial landscape of the country. The qualifications range from grants, for example, those that give the company development support to AI start-ups, to direct funding where the equity stake of the government in the business will ensure capital flow. In addition to direct and sponsored funding, other types of investments by governmental organizations, including that such organizations serve public investment intermediaries, and incentives for regular seed investment. For Singapore-based start-ups, one of the most well-known investor bodies is the National Research Foundation (“NRF”), an organization set up to help improve research and development in Singapore. The NRF provides not only financial support to such agencies wishing to build a sound research and development, together with companies or other research agencies.