Johnny and Dan were talking shop. Suddenly, as it happens their talk switched to an application Dan was working on. Let us read how did their conversation go.
Johnny: Hey, don’t let that idea go to waste. You should do something about it. Maybe you should start a company. How about opting for company registration in Singapore?
Dan: Man, it is too much of a trouble, and I don’t know much about selling.
Johnny: Why I can help you with the selling. You take care of the product. What if we, You and Me, incorporate a company in Singapore?
Johnny: We cannot be all that bad a team.
Johnny: I know you are innovative and good with technology. And you know that I can sell a fridge to an Eskimo.
Dan: Yaaa? What the hell for?
Johnny: Well, to keep the milk warm for his kids.
Dan: We will also need to find whether foreigners like us can start a company there or the documents it requires. And things like, “How much minimum share capital we need to invest in it?”
Dan: And, you know I am totally broke!
Johnny: Shut up man! Don’t put the cart before the horse. Ok!
Johnny: We will see about it later on. Cross the bridge when we come to it.
Johnny: Does that put us on the right track?
Dan: Yes, sort of. It is a start. Let’s start with who can incorporate a company in Singapore?
Anyone over the age of 18 can incorporate a company in Singapore. Even the foreigners, individuals, and corporates can own 100% of shares in a company.
Yes, the process for the Singapore business incorporation is simple and straightforward one. You only have to complete two procedures in it; a) Approval for the name of the proposed company, b) Applying to ACRA for your company registration. It is an online process that an expert from your Singapore company registration services can initiate after receiving incorporation documents from you.
Johnny: It is obvious that the incorporation cost will change as per the services providers. We will have to make a list of Singapore incorporation packages and what they offer to find the most suitable one.
Johnny: The cost may also depend on the type of Singapore company one would like to register.
We can choose one of the following business structure,
- Private Limited Company (Pte Ltd)
- Exempt Private Company (EPC)
- Sole Proprietorship
- Limited Liability Partnership (LLP)
- And following types are for the use of corporate
- Subsidiary Company
- Branch Office
- Representative Office
Johnny: My goodness, this thing has really fired me up. I am all curious.
Dan: Yes, as the Alice said, “It is getting curiouser and curiouser!”
Dan: We will also have to make sure that there are no hidden costs.
Johnny: Maybe we should look for an introductory or promo incorporation package that offers discounts like, “Buy 1, Get 2 or 3 services.
Dan: Yes, I found one. It is by SBS Consulting Pte Ltd. If we pay S$699 only for registering our private limited company, we get two additional services for free.
Dan: Yes, we get company secretary and registered local office address services for FREE for the first year.
Johnny: Go on, read further. Do we really need the extras? Maybe they are shafting us by making us buy what we don’t need.
Johnny: Check out the pre-incorporation requirements for company registration in Singapore.
Dan: Let’s get to the bottom of it.
Dan: What are the pre-incorporation requirements for setting up a Singapore company?
It says we need
- At least one shareholder (maximum of 50)
- Minimum initial paid-up capital of S$1
- At least one resident director
- At least one company secretary
- Registered local office address
Johnny: Seriously, only S$1. It is so affordable. But what is a local resident director? How many directors do we need to register a company in Singapore? Is having a local director necessary for a Singapore company?
Dan: Yes, it is necessary to have at least a local director for our company registration. As per the Company Registrar of Singapore (Accounting and Corporate Regulatory Authority), someone who ordinarily lives in Singapore. Someone who is Singaporean, permanent resident or an EntrePass or Employment Pass holder.
Dan: It means one of us need to live in Singapore after our Singapore business incorporation. Did I get it right?
Johnny: Yes, and Danny, that is tough. Is there any alternative?
Dan: We could get nominee director service from our Singapore company registration services provider. It will definitely jack up the total cost, wouldn’t it?
Dan: Let me check whether a foreigner incorporates a Singapore company on his own? No, the answer is big no. We have to appoint one Singapore company incorporation agent for the task. On the other hand, locals also prefer an agent.
Johnny: And most importantly, every foreigner needs a work pass in Singapore. That means we will have to get an Employment Pass or Entrepreneur Pass.
Dan: How are we supposed to get this work pass or work visa?
Johnny: See, it is quite simple. First, we hire a Singapore company registration services providing firm. Submit our incorporation documents to it. They register a company with ACRA. We then hire Company Secretary. This is the professional who goes and applies to the Ministry of Manpower for our work passes. Only after that, we can work in Singapore. Or, else we will have to continue with the nominee director service.
Dan: I hope it works. But we will need money. And, I am totally broke.
Johnny: Slow down, Danny. And for God’s sake, stop counting your chickens before they are hatched.
Johnny: Yes, we will need to go there to sign the documents before they are submitted to the company registrar
Dan: I found the list of documents needed for Singapore company registration.
- Approved company name
- short description of business activities
- Particulars of shareholders
- Particulars of directors
- Particulars of company secretary
- Local registered office address
- Company Constitution (M&AA)
Johnny: Don’t we have to submit any special document?
Dan: Yes, there are. The foreigners need to submit,
- Copy of passport
- Proof of overseas residential address
- Know-Your-Client documents like bank reference letters, personal and business profiles, etc.
Johnny: What about the locals?
Dan: Lucky bastards, they only have to submit a copy of their Singapore identity card with the application. And corporate shareholders have to provide copy of their Certificate of Incorporation and Constitution (M&AA)
Johnny: Is there anything on the opening of a corporate bank account? See if this SBS Consulting charges separately for it.
Dan: No, they don’t charge anything for. However, their assistance is for an account in a local bank.
Johnny: Well, that is good. A corporate account is a must. It is an easy way to keep our personal and company finance separate.
Dan: Oops, I never thought about that.
Dan: Can we have a corporate as our shareholder?
A Singapore private limited company can have as many as 50 shareholders. There are no restrictions on shareholding. The foreigners can own their company completely. We don’t need any local partner, just to start a company. They can be corporates or individuals like you and me.
Johnny: That is great.
Dan: Why does a company require a registered office address in Singapore?
Johnny: It is the place where its important documents are stored. It is also the place officials from the regulating agencies visit to inspect company’s statutory registers and records.
Johnny: See we have no address in Singapore. That is why Singapore company registration services provider arranges one for us and to register the company. Later on, we can rent a place and change the official address of our company.
Dan: What if a Singaporean wants to use a residential address as the company address?
Johnny: Yes, it is possible under the Home Office Scheme. The business owners need to take permission from the appropriate authorities. And you can start your business activities only after acquiring the necessary business licenses?
Dan: What if we don’t appoint a company secretary for our Singapore company?
Johnny: Of course, the company owners can save money by doing it themselves. But it is a tough task. It needs thorough knowledge about the rules and regulations related to statutory compliance and corporate governance. However, you as a sole director will not be able to act as a company secretary.
Dan: Who we can appoint as a company secretary? What are the qualifications of a secretary?
Johnny: Actually, a private limited company can hire any Singapore resident experienced in handling the responsibilities of the task. A Singaporean, a permanent resident or an employment pass holder can be a company secretary. A company director can also act in this capacity but not the sole director.
Johnny: However, public limited companies are required to hire a qualified, in-house company secretary on the full-time basis. It is actually very important position and authorities count it among the officers of the company.
Dan: Does SBS Consulting offers stand-alone company secretary services?
Johnny: Yes, the service is on offer, and it costs S$299 for a year and there is promo incorporation package for the startups.
Dan: I suppose that after registering our company, we will also need the bookkeeping and accounting services in Singapore.
Johnny: Yes, you are spot on this time. Our company will need monthly, quarterly, or annual bookkeeping & accounting services to update our books, to put our expenses and earnings in black and white.
Dan: Why bother with it? We will have it in our head, right?
Johnny: Regularly updating of books is an obligation. Moreover, the accumulated data is used for analysis, finding market trends, business cycle, and actual financial status of the company. Most importantly, the accounting service prepares various types of financial statements for us.
Dan: How much a Singapore accounting services provider is going to cost us?
Johnny: Well, that depends on how we negotiate with them. They may charge us as per the volume of transactions processed or may use some other parameter.
Johnny: Oh, they can help us with the preparation of compilation report/ Director’s report. It is something we will have to file with the ACRA at the time of annual filing.
Johnny: They may also provide us with the payroll services if we grow and hire employees.
Dan: What is XBRL & GST filing?
Johnny: Singapore applies a Goods and Services Tax on goods consumed and services used. After our company registration, our accounting services provider will help us to determine whether we need GST registration. They will also help with the quarterly GST return filing.
Johnny: At the end of the financial year each company (unlimited or limited by shares) incorporated in Singapore needs to file its financial statements to ACRA in XBRL format. It is part of compliance requirements.
Time will tell whether Johnny and Dan will succeed or not with their Singapore company registration. And that was a few hours from the life of Johnny and Dan, the representatives of the new breed of entrepreneurs. Thanks for being interested in their discussion. Maybe you also learned a bit or two about what you should expect if you are thinking about a Singapore business incorporation to implement your ideas.
Contact us:
SBS Consulting Pte Ltd
High Street Center,
#17–02, 1 North Bridge Road,
179094 — Singapore
Phone: +65–6536 0036
Email: info@sbsgroup.com.sg
