Setting Up a Local Company in Singapore
When going through the process of setting up a local company in Singapore, you may choose to register a private limited company.
A private limited company is well-known to be one of the most common entity types selected by Singaporean entrepreneurs.
There are many positives of setting up a local company in Singapore as a private limited company.
A private limited company provides entrepreneurs with limited liability and the ability to have many shareholders. In fact, a private limited company allows business owners to have up to 50 shareholders!
Advantages of Setting up a Local Company in Singapore as a Private Limited Company
- When setting up a local company, note that a Private Limited Company is an independent entity. Therefore, the company’s officers (i.e. the directors and shareholders) are not affected by the Singapore local company’s liabilities.
- A Singapore Private Limited Company is considered a tax resident, regardless of the nationality of its directors. Thus, it is eligible for local tax exemptions and incentives provided by the government.
- All profits of local companies are taxable at 17% flat rate (Corporate Income Tax). Dividends will not add on to the local company’s shareholders’ personal taxes.
- For the first three years from the date of setting up a local company, there are partial tax exemptions. This is only for companies set up from the year 2020 and onwards.
- Ownership of a private limited local company can be transferred easily through a transfer of ownership of company shares.
Disadvantages of Setting up a Local Company in Singapore as a Private Limited Company
- Failure to comply with the Singapore Companies Act when setting up a local company will result in penalties and even jail time in serious cases and offences.
- Setting up a local company requires proper paperwork. All documents must be verified and filed for annual reporting. Any Important changes that must be reported to ACRA after setting up a local company in Singapore, such as the Annual General Meeting, and Annual Return.
- There is a higher maintenance cost; secretarial fees and compliance fees will be incurred when you register a Private Limited Company in Singapore.
- Entrepreneurs must follow compliance requirements from ACRA and the IRAS when setting up a local company in Singapore.
Requirements when Setting Up a Local Company in Singapore
- There has to be a minimum 1 local director when setting up a local company
- A foreigner who wish to register a private limited company in Singapore must appoint a nominee director, and are required by law to engage an incorporation firm.
- The appointed director must be a minimum of 18 years of age. They must not be bankrupt during the time period of setting up a local company.
- There must be a minimum of 1 individual or corporate shareholder.
- A company secretary has to be appointed within 6 months from incorporation date.
- There has to be a minimum initial paid-up share capital of at least SGD $1.
- The applicant has to state a Singapore registered office address when they incorporate a company in Singapore
What are the Singapore Company Incorporation Fees inclusive of?
- ACRA’s name search and company name reservation.
- ACRA company incorporation application fees.
- Provision of 1 named corporate secretary.
- Company memorandum and Articles of Association (M&AA).
- Share certificates as proof of shareholders’ ownership of the new Singapore company.
- Setting up of the company’s Statutory Registers and Records.
- The director’s resolution for 1st Bank Account Opening. Examples of Singapore banks include OCBC, UOB, DBS and Maybank.
- Advisary on setting up a local company in Singapore as either a Singaporean or foreigner. We also provide advice and expertise on accounting services, Singapore taxes, immigration, attaining a Singapore work pass and more!
Required Information for the Set Up Company Application
- A registered business address./
- Proof of residency. This is applicable for foreign officers only.
- Preferred bank to open a corporate bank account. Examples include OCBC, UOB, DBS and Maybank.
Contact WLP Group
WLP group offers company registration services for all entrepreneurs seeking to incorporate a company in Singapore regardless of nationality. We will be able to advise you on the documents and any other HR matters that need to be prepared and provided prior to the process of company registration in Singapore.
WLP Group can assist those interested setting up different kinds of local companies, such as entrepreneurs looking to register a Private Limited Company in Singapore. For more information on how we can help you, contact us today for a Free Singapore Company Registration consultation.