How To Set Up A Singapore Private Limited Company

By Author: Enterslice
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Setting up a Private Limited Company (Pte Ltd) in Singapore is a strategic move for many entrepreneurs and businesses. Known for its robust economy, favourable tax system, and strategic location in Asia, Singapore offers an excellent environment for business growth and international expansion. This guide will walk you through the essential steps and considerations for Private Limited Company formation in Singapore.

Why Choose a Private Limited Company in Singapore?

A Private Limited Company (Pte Ltd) is the most common and preferred business structure in Singapore due to its many advantages:

Limited Liability: Shareholders are only liable up to the amount they have invested in the company.
Separate Legal Entity: The company is a separate legal entity from its shareholders, allowing it to own property, sue or be sued.
Tax Benefits: Singapore offers a low corporate tax rate and various tax incentives for new companies.
Ease of Raising Capital: It's easier to attract investors and ...
... raise capital compared to other business structures.

Steps to Set Up a Private Limited Company in Singapore

1. Pre-Incorporation Requirements

a. Company Name: Choosing an appropriate company name is the first step. The name must be unique, not infringe on any trademarks, and not be obscene or offensive. The Accounting and Corporate Regulatory Authority (ACRA) of Singapore handles name approval.

b. Directors: A Private Limited Company must have at least one director who is a resident of Singapore. A resident is defined as a Singapore Citizen, Permanent Resident, or holder of an Employment Pass, EntrePass, or Dependant's Pass. Directors must be at least 18 years old and not be undischarged bankrupt or convicted of offences related to dishonesty.

c. Shareholders: The company must have between 1 and 50 shareholders, who can be individuals or corporate entities. Shareholders can be local or foreign, and 100% foreign ownership is allowed.

d. Paid-up Capital: The minimum paid-up capital for registration of a Singapore company is S$1. This can be increased anytime after the incorporation.

e. Registered Address: The company must have a registered physical office address in Singapore, which can be commercial or residential. P.O. Boxes are not allowed.

f. Company Secretary: Within six months of incorporation, a company must appoint a qualified company secretary who is a resident of Singapore. The company secretary ensures compliance with corporate regulations.

2. Incorporation Process

a. Reserve Your Company Name
Submit your proposed company name to ACRA for approval through the BizFile+ portal. The process usually takes a few hours to a day unless the name requires review by another government authority.

b. Prepare Necessary Documents
Prepare the following documents for submission:

Company Constitution: Formerly known as the Memorandum and Articles of Association (MAA).
Consent to Act as a Director and Company Secretary: Form signed by each director and the company secretary.
Identification and Address Details of Directors, Shareholders, and Company Secretary: Passport copies and proof of residential addresses for foreigners, or NRIC for locals.

c. Submit the Incorporation Application
Once your company name is approved, submit the incorporation application through BizFile+. The following details will be required:

Company name
Description of business activities
Shareholders' details
Directors' details
Registered office address
Company secretary details

3. Post-Incorporation Requirements

a. Certificate of Incorporation: Upon successful registration, ACRA will issue an e-Certificate of Incorporation. This document confirms that your company is legally incorporated.

b. Business Profile: You will receive a business profile containing key information about your company. This document is often required for opening a corporate bank account and other business activities.

c. Open a Corporate Bank Account: Choose a bank and open a corporate bank account. Most banks in Singapore require the physical presence of directors and a copy of the Certificate of Incorporation and business profile.

d. Register for GST: If your company expects an annual turnover exceeding S$1 million, it must register for Goods and Services Tax (GST). Voluntary registration is also possible for businesses below this threshold.

e. Compliance with Statutory Requirements: Ensure ongoing compliance with statutory requirements, including:

Annual General Meeting (AGM): Hold your AGM within 18 months of incorporation and subsequently once a year.
Annual Return: File your annual return with ACRA within one month of your AGM.
Financial Statements: Prepare and file annual financial statements by Singapore Financial Reporting Standards (SFRS).

Additional Considerations

a. Employment Passes
If you intend to hire foreign staff, you will need to apply for Employment Passes or other relevant work visas. The Ministry of Manpower (MOM) handles these applications.

b. Business Licenses and Permits
Depending on your business activities, you may need to obtain specific licenses and permits from relevant authorities. Check with the GoBusiness Licensing portal for more information.

Conclusion

Setting up a Private Limited Company in Singapore is a straightforward process thanks to the country's business-friendly environment. By understanding and following the necessary steps, you can successfully establish your company in Singapore and take advantage of the numerous benefits offered by Singapore's dynamic economy. Whether you're a local entrepreneur or a foreign investor, Singapore provides a solid foundation for business success.