Company formation in Singapore

Company formation in Singapore

Our company provides assistance in establishing business entities in Singapore. Our goal is to let our customers focus on doing business instead of dealing with bureaucracy. We can take care of everything from choosing the most appropriate legal form to submitting the required documents to the business registry. For a fixed fee, you may appoint as many directors as needed. If you need any permits or licences to start operating, we will take care of that as well. Contact us for more details.

Types of Business Entities

Singapore is one of the easiest places to do business, because of its straightforward, comprehensive system of company structure and governance, which is easy for entrepreneurs or foreign investors to grasp and understand.

Sole Proprietorship – Ideal for Small Businesses, but only for residents

Partnership – An Alternative for Small Businesses with more than One Owner
Similar to a sole proprietorship in terms of structure, liability, and taxes, the most significant difference is that a partnership can comprise of two or more partners, subject to a maximum cap of twenty individual partners. As with all other business entities, a local manager must be appointed who is a natural person and at least 18 years of age, is ordinarily resident in Singapore and is not an un-discharged bankrupt. This business structure allows for foreign individuals or companies to be partners. Similar to a sole proprietorship, the tax rate imposed will be that of the partner, i.e. if the partner is an individual, the personal income tax rates will apply, if the partner is a company, corporate tax rates would apply. The greatest risk associated with a partnership is the fact that it is not considered a separate legal entity and all partners are personally liable for the partnership’s debts and losses, even if the debts and losses are incurred by other partners.

Limited Partnership
Given the risks associated with a partnership, a limited partnership provides the option of allowing a degree of limited liability. Similar to a partnership, there are at least two partners, but there is no maximum cap on the number of partners. Of the partners, at least one partner will be the general partner, who will have unlimited liability and will be personally liable for all debts and losses. The other partners may be limited partners, who are not personally liable for debts or obligations, save for that which is his or her agreed liability.
Both the general partner and limited partners can be either individual of at least 18 years old or a corporate entity. In addition, in the case where the general partner is not ordinarily resident, a local manager who is ordinarily resident will have to be appointed. Similar to that of a sole proprietorship and partnership, a limited partnership will not qualify for any tax incentives provided to companies and profits earned will be subject to each partner’s personal tax rate. However, if the partner is a company, then corporate tax rates would apply.

Limited Liability Partnership (LLP)
Despite the similarity in its name, a limited liability partnership (LLP) is distinctly different from a partnership and limited partnership; and is more similar to a private limited company. The main similarity is that partners of an LLP are taxed at their personal income tax rate. As the name implies, in an LLP, each individual partner’s liability is limited.

The key differences between an LLP and the other forms of partnership lie in its legal status – it is considered to be a separate legal entity from its partners; and can own property in the LLP’s name, which is not possible for the other forms of partnership. In addition, while partners will be held personally liable for debts and losses, this is restricted to debts and losses resulting from their own wrongful actions, not that of other partners.

However, an LLP will need to submit an annual declaration of solvency to state whether the LLP has the ability to satisfy its debts during the normal course of its business. This requirement is not applicable to other forms of partnership.

Private Limited Company – the Ideal Company Structure
A private limited company is the most common form of the company chosen by entrepreneurs and investors, mostly because of the tax incentives that can be applied for, as well as the fact that it is considered as a separate legal entity and is separate and distinct from its shareholders and directors.

The main benefit of this is that the members of a company will not be held personally liable for the debts or losses of a company.

Unlike all the other business entities, a private limited company can qualify for tax exemption schemes and is taxed at the effective corporate tax rate of 0-17%.

Given that the Singapore government has always been actively promoting the spirit of entrepreneurship and innovation, there are two key tax exemptions that have proven to be extremely beneficial for companies. For newly incorporated companies that meet the qualifying conditions, 75% tax exemption can be claimed on its first S$100,000 of chargeable income for each of its first three consecutive years of assessment. A further 50% exemption is given on the next S$100,000 of chargeable income for each of the first three consecutive years of assessment.

Notwithstanding the attractive tax incentives, it should be noted that there are more formalities and procedures for a private limited company to comply with. For example, it is required to appoint a company secretary within six months of incorporation and an auditor within three months of incorporation, unless the company is exempt from audit requirements. In addition, there is the requirement for annual returns to be filed annually with the Accounting and Corporate Regulatory Authority (ACRA).

Each business entity has its unique advantages and disadvantages. However, unless one is a small business operating at low profits, with little expectation of expansion, a partnership is usually not the preferred choice. In contrast, while it may come with several more statutory obligations, a private limited company is a far better vehicle as it is easier to obtain loans from financial institutions and presents lower risks in terms of liability for its members.

Shelf companies in Singapore and their features:
- incorporated as a Singapore private limited company
- single shareholder with one share
- paid-up capital of S$1
- registered local address
- nominee director serves as the current resident director
- Information required for purchase of shelf companies:
- personal details of new shareholder
- appointment of a new director of your choice, or
- engagement nominee director

The following services are included with the purchase of a shelf company:
- transfer of company share
- provision of pertinent documents
- certificate of Incorporation
- certificate of Memorandum and Articles of Association (M&A)
- share Certificate

Optional Services:
- company Secretarial Service
- assistance in opening of a bank account in Singapore, if necessary
- registered Address Service
- local Resident Nominee Director Service

Note: A corporate bank account with a Singapore bank of your choice can be open immediately upon purchase.

Do you wish to start the procedure?

Just drop us an email or give us a call and we will send you short list of information that we need. After you provide it to us you can come anytime to proceed with the formalities.