We are able to provide a comprehensive range of services related to company formation within Singapore and in other jurisdictions. Depending on your requirements, we are able to assist you on the following:
|Singapore Citizens &Residents||Foreign Individuals||Foreign Corporations|
|For those individuals residing in Singapore looking to set up a company here
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|Foreign individuals can explore the available options on setting up a Singapore company (with or without relocating here)
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|A foreign corporation can look into expanding its operations here under 3 available structures; that is by creating a subsidiary / branch office / representative office
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Singapore Citizens and Residents intending to start business in Singapore
The incorporation process by a Singaporean or Singapore Permanent Resident is the most straightforward. Different types of businesses necessitate different company setups. Before starting a business or incorporating a company, learn which type of company will work most efficiently for your business.
What Kind of Entity to Select for Registration
The first thing the resident need to decide is which type of business entity to form. The most common options available are Private Limited Company, Limited Liability Partnership and Sole Proprietorship. Brief explanations on these 3 types of entities are provided below.
Private Limited Company
A company is a business entity registered under the Companies Act, Chapter 50. It has a legal personality i.e. it has rights to own properties, has perpetual succession and can sue or be sued in its own name. It has a separate legal status from its shareholders and directors and as such have limited liabilities for the debts and losses of the company.
It usually has the words 'Pte Ltd' or 'Ltd' as part of its name.
Limited Liability Partnership
A Limited Liability Partnership (“LLP”) is a vehicle for doing business in Singapore. An LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.This means that the LLP is seen as a body corporate and has a legal personality separate from its partners. The LLP has perpetual succession, which means any change in the partners of an LLP will not affect its existence, rights or liabilities and it has rights to acquiring and holding property in its name and it can sue or be sued in its own name.
This structure is generally suitable for those individuals engaged in professional services such as lawyers, architects, accountants and management consultants. Singapore citizens, residents, and employment pass holders can register a LLP. Foreign individuals and companies may also register an LLP but must appoint a local manager.
A Sole-Proprietorship is a business owned by one person or one company. There are no partners. The Sole-Proprietor has absolute say in the running of the business. This is seen as the simplest form of business entity to set up. A foreigner or a foreign company, who would like to register a Sole-Proprietorship in Singapore, must appoint a local resident manager.
If you plan to move to Singapore to be involved in your company operations, you need to apply for a work pass (Employment Pass or Entrepreneur Pass). Note that approval of a work pass is at the sole discretion of the government authorities. Each application is considered based on its own merits.
The key criteria for Employment Pass is the educational qualifications and professional experience of the applicant. A tertiary level education from an approved university is expected for Employment Pass application. The other factors include applicant’s prior professional experience and share capital of the company. It takes between 5 weeks to process the application.
Entrepreneur Pass is meant for business owners who lack tertiary level education but otherwise have good entrepreneurial background. Some basic requirements for Entrepreneur Pass include a minimum investment of S$50,000 in the company, hiring of local employees and the business owner having at least one third of shares in the company. Entrepreneur Pass applicants are also need to submit no more than 10 pages comprehensive Business Plan together with their application. It takes between 6 to 8 weeks to process the application.
If no Relocation Required
If you do not wish to physically relocate to Singapore to manage your business but intend to operate your company from overseas, we can provide a nominee to act as your resident local director to fulfil the local statutory requirement.
New start-up companies are eligible for tax exemption. A qualifying Singapore start up can avail of a 0% tax rate on its first S$100,000 of profits for each of its first three consecutive tax filing years. To qualify for this, the company must not have more than 20 individual shareholders and for company with corporate shareholder(s), one individual must hold at least 10% of the issued shares.
Property and investment holding companies are not eligible for the start-up tax exemption.
There is no tax on capital gains or dividend distributions for Singapore companies.
Corporate tax rate on profits in Singapore is 17%. With the available tax exemptions, the effective tax rate for annual profits of up to S$300,000 can be less than 9%. With Singapore signing tax treaties with many countries, Singapore companies can easily avoid any double taxation when conducting international trade.
The choice of entity will depends on the goals and objectives of the foreign firms.
Branch office: is treated as an extension of the parent company and as such its liabilities extend to the parent company. A branch office is considered a non-resident company and tax exemptions available to resident companies are not available to a branch office. As such, setting up a branch office is not a popular choice compared to setting up subsidiary company.
Subsidiary company: is treated as a locally incorporated legal entity that is separate from its foreign parent company. As such, its liabilities do not extend to the parent company. A subsidiary company is treated as a resident company and therefore is eligible for tax exemptions available to local companies. This is the most popular option for foreign companies intending to set up a company in Singapore.
Representative office: is a temporary set up and has no legal status of its own. A foreign company that wishes to test the Singapore market before making long-term investment commitments can set up a Singapore Representative Office. The purpose of a Representative Office is to conduct market research activities on behalf of its foreign head office. It cannot engage in trading activities or business activities that generate profits.The registration of a Singapore Representative Office is valid only for one year and must renewed on an annual basis. After a period of 3 years, a Representative Office must upgrade itself to either a Singapore subsidiary or Singapore branch office.
Staff Relocation Considerations
Foreign companies that have established their office in Singapore and wish to relocate some of their professional staff including executives from the head office will be required to apply for Employment Pass for each such staff member. Each application is subject to review and approval by the authorities and will be considered based on its own merits. Good tertiary level education, professional experience, and the employee salary are some of the key factors during application consideration. There is no quota system for employment pass applications.
If no Relocation Required
Foreign companies (those setting up subsidiary or branch offices) but do not wish to physically relocate to Singapore to manage your business but intend to operate your company from overseas, we can provide nominees to act as your resident local director (for subsidiary) / local agents (for branch) to fulfil the local statutory requirement
Singapore subsidiary company is taxed as a Singapore resident entity and qualifies for tax exemptions and tax benefits.
Singapore branch office is taxed as a non-resident entity and does not qualify for tax exemptions or tax benefits and is unable to take advantage of double tax treaties. It is taxed only on earnings derived from its Singapore operations.
A representative office is not subject to any taxation in Singapore as it’s not a revenue generating entity.