With Singapore’s position as the global business capital, it’s understandable why many entrepreneurs across different countries wonder if foreigners are allowed to start a company in Singapore.
Now, the good news is, foreigners can indeed register a company in Singapore. As a matter of fact, thousands of foreigners from various countries have already set up different types of companies, which continue to enjoy all the business benefits the city-state offers.
On a sad note, though, the whole process of starting a business in Singapore may not be that simple for foreigners. Turns out the Accounting and Corporate Regulatory Authority (ACRA), along with other government bodies, have enacted stricter conditions for foreign applicants.
So, read along as we reveal not only the types of businesses available to foreigners in Singapore, but also the accompanying registration requirements and costs.
Individual Foreigners vs. Foreign Companies
At least Singapore is generous enough to offer foreigners multiple corporate structures. It’s worth noting, however, that your specific range of options depends on how you choose to register the business.
If you intend to start the business from scratch, Singapore’s Companies Act allows you to choose between the following core categories:
Private Limited Company.
Limited Liability Partnership.
But, on the other hand, if you seek to expand an already existing foreign company into Singapore, you get to choose between the following types of overseas establishments:
That said, let’s now explore the main features you should expect from each corporate structure.
Corporate Structures For Foreigners Starting a New Business In Singapore
The business is not recognized as a separate entity from its owner.
The business is managed and administered directly by a single proprietor.
The proprietor is entirely responsible for all the liabilities, losses, and debts that arise from the business.
Revenue from the business is considered part of the owner’s personal income.
The business doesn’t pay corporate income tax. Instead, the Inland Revenue Authority of Singapore (IRAS) charges its owner personal income tax that encompasses profits from the business.
The personal income tax rate after starting such a business in Singapore for foreigners ranges between 0% and 22%.
A representative office is only a temporary establishment for conducting market research and feasibility studies in Singapore.
The company is not recognized as a separate legal entity from its parent foreign company. Rather, the two are essentially one and the same entity.
Such an establishment does not have the privilege of engaging in any profit-making activities.
It comes with unlimited liabilities.
It can only hire a maximum of 5 employees.
To register a representative office company in Singapore, the parent foreign company should have a company history that spans more than 3 years, along with a corresponding annual turnover of at least S$250,000.
Key Requirements for Foreigners Setting Up a Company in Singapore
The company registration requirements across various corporate structures are quite different, even for foreigners. So, as you compare the company options based on their corporate features, you might want to consider their corresponding incorporation requirements as well.
And to help you with that, here’s a breakdown of the registration requirements in Singapore for foreigners in each of the categories; sole proprietorship, Pte Ltd company, and Partnership.
Sole Proprietorship Registration Requirements For Foreigners In Singapore
The foreigner must be at least 18 years of age.
You should not have a bankruptcy or criminal history.
The application process is conducted on ACRA’s BizFile+ portal, with the help of a registered incorporation services provider.
The foreigner should be a permanent resident of Singapore, with a valid resident’s pass such as EntrePass, Employment Pass, or Dependant’s Pass.
If the foreigner happens not to be a permanent resident of Singapore, they should appoint a local representative who resides in Singapore.
In that case, the local representative assumes full responsibility for the company’s operations and liabilities.
The business should have a local residential address.
An approved business name should accompany the application.
ACRA further requires applicants to submit an explicit description of the business activities.
A foreigner must appoint at least one manager of at least 21 years of age, and who should be a local resident in Singapore. Otherwise, the owner is automatically assumed to be the business manager.
Limited Liability Partnership (LLP) Registration Requirements For Foreigners In Singapore
Starting an LLP business in Singapore is open to foreigners of at least 18 years of age.
The application should include a minimum of 2 partners and a maximum of 20, who can be individuals or company entities.
As a foreigner, you’re required to appoint a local manager who resides in Singapore. This gives you the chance to administrate the company without relocating to Singapore.
If you intend to run the LLP company yourself, you should first secure a valid resident’s pass from the Ministry of Manpower (MOM) before proceeding with the application.
The LLP business should have a registered residential address in Singapore.
While all LLP incorporation applications are submitted via ACRA’s BizFile+, foreigners cannot proceed directly. They are, instead, required to hire a registered filing agent to handle everything on their behalf.
Each application should be accompanied by an approved and unique business name.
Other required documentation includes; Consent to Act as Manager, Statement for Non-Disqualification to Act as Manager, Declaration of Compliance, plus the personal details and proof of the residential address of each partner.
Private Limited Company (Pte Ltd) Registration Requirements For Foreigners in Singapore
To register a private limited company in Singapore, you first need to be at least 18 years of age.
The application should be filed on ACRA’s BizFile by a registered incorporation service provider based in Singapore.
The Pte Ltd company should have at least one shareholder.
Should have at least one company director, who could double up as a shareholder. And although you’re free to include multiple foreigners, at least one of the directors should be a permanent resident in Singapore.
A foreigner can only qualify as the company’s resident director after securing a valid resident’s pass like EntrePass. Alternatively, foreigners can go ahead and appoint a local representative based in Singapore.
The application should state a paid-up capital of at least S$1. But, if you intend to manage the business from Singapore, you need a paid-up capital of at least S$50,000 to boost your chances of securing an Employment Pass from the Ministry of Manpower.
The business should have a registered local address.
The application should include the personal details of all the company’s shareholders and directors- in the form of copies of your identification documents and foreign passports.
You should attach a comprehensive company constitution, complete with its Memorandum of Association and Articles of Association.
You need to appoint an auditor and a company secretary, and then submit their details to ACRA.
Attach a unique business name, fully approved by ACRA.
How Much Does It Cost to Incorporate a Company in Singapore?
Well, the truth is, it depends.
The cheapest it can cost you is $315- $15 for reserving a unique business name, and $300 for company registration. But, get this- that only applies to locals in Singapore. If you’re looking to start a business in Singapore as a foreigner, you can expect a much costlier incorporation process.
ACRA, for starters, tends to charge foreigners higher company registration fees. And then there’s the issue of hiring a filing agent to submit your BizFile applications.
The costs don’t end there, though. You might also be required to apply for a resident’s pass like EntrePass or Employment Pass- whichever you choose, the Ministry of Manpower will charge you an application fee at the very least.
But, still, that’s not all. You’ll ultimately incur additional indirect expenses from buying or renting business premises, hiring local representatives, and making business license applications.
Next Steps After Setting Up a Business in Singapore
Once you register a company in Singapore as a foreigner, you should proceed to:
Apply for relevant business licenses from Singapore’s GoBusinessplatform.
Apply for Employment Passes to manage your business from Singapore.
File your taxes before the 15th of December every year.
Enroll with relevant government business schemes for foreigners.
Hold your company’s Annual General Meetings along with other shareholders and directors every year, within 6 months from the close of the financial year.
File your company’s annual returns within 30 days after the AGM.
Where To Start
We know what you might be thinking at this point. While it’s a relief that foreigners can indeed start fully-fledged companies in Singapore, this whole process can be a bit technical and cumbersome.
The good thing is, we understand. That’s why our corporate experts are willing to make everything easier and much cheaper for you. So, go ahead and talk to us today for essential business services like incorporation filing, compliance filing, payroll management, and accounting.
Need Help? Contact US!
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