Singapore Company Formation Guidance
Singapore Key Points
- Time – 3 days to incorporate your company
- Directors – a Pte requires a Singapore resident director
- Shareholders – only one shareholder is required, individual or corporate
- Share Capital – the share capital requirement is only $1
- Support – using our 20 years experience we guide you throughout every step of the company formation process
- A Singapore Company is required to appoint a qualified Company Secretary
There must be one director of the company who is above 21 years of age
- There must be at least one shareholder and one resident director.
- However, most companies opt to have at least 2 directors as banks and other financial institutions usually require 2 signatories
- A company secretary
Types of Companies
Most companies in Singapore are private companies limited by shares – Pte Ltd.
- Limited liability – Liability for debts and losses are limited to the value of the shares. The personal assets of shareholders are protected.
Once your registration has been approved by the Accounting & Corporate Regulatory Authority – ACRA, you must observe the following rules.
Rules for Companies
- Appoint a company secretary within six months of incorporation. The sole director cannot act as company secretary.
- Your registered office must be open and accessible to the public for not less than three hours between 9am and 5pm on weekdays.
- Companies with less than 20 individual shareholders (Exempt Private Companies) do not need to appoint an auditor, audit their accounts or file them with ACRA if their revenue is less than S$5 million for the financial year.
The taxation system in Singapore is territorial. Tax is levied on income accrued and derived in Singapore, and foreign income remitted into Singapore.
Singapore’s tax rate is one of the lowest in Asia and the system is less burdensome.
In addition to its relatively low tax rate, there are various tax exemptions and tax concessions for companies which qualify under different economic incentive programmes.
Effective from June 2003, foreign dividends and foreign branch profits and service income derived from foreign sources remitted into Singapore are exempted from tax, subject to conditions. Singapore has also abolished withholding tax on dividend. Also Singapore does not impose tax on capital gains. Goods and Services Tax is applicable in Singapore. It adopts a simple and single goods and services tax system which is easy to administer. Singapore has a network of more than 40 double tax treaties with both regional and other trading partners.
Singapore’s taxation structure & incentive schemes have been put in place to help companies grow their business, such as:
- The first S$100,000 net profit (of a Singapore exempt private company), for the first 3 years from the date of company’s incorporation, is tax-free. And in order to qualify for this tax exemption, at least 10% of the shares must be hold by an individual shareholder.
- Legal Tax Minimization – Offshore income earned outside Singapore is not subject to local tax, if not remitted back to a Singapore Bank. Thus, a properly structured Singapore company is the perfect entity to book international profits in a wholly legal manne.
- Singapore has formed double taxation treaties with a network of over 60 countries, including powerful economic nations such as the US, China, Japan, UK, Canada, France and Germany.
- The corporate tax rate is 17% and the maximum income tax rate is 20% .