How to start a business in Singapore A Foreigner’s Guide

How to start a business in Singapore: A Foreigner’s Guide for 2024

Are foreigners able to easily establish a company in Singapore? Foreigners hoping to start a business in Singapore always need reliable advice. Each morsel of information helps them to make important decisions about this project. Fortunately, it is easy for non-residents to set up business in Singapore. Foreign investors are well advised to get advice from a reliable business consultant like FastLane Group.

How can Foreigners Register a Company in Singapore?

A foreigner can register a company in Singapore and have 100 % of the ownership, yet without any obstacles, exactly like locals. That is, so long as they are 18 years of age or older and are free of any convictions for criminal offenses or bankruptcy, anyone can form a company in Singapore. Besides Singaporeans, Permanent Residents (PR), those with Employment Passes, EntrePasses and dependent’s passes can all register a company and become shareholders. The company must get started in Singapore with human presence.

Key Requirements for foreigners to set up a new business in Singapore

How to Appoint Local or Resident Director

Residents can serve as the resident director when self-registering their company on the BizFile+ portal. Shareholders must pass a resolution to designate the local director, selecting an individual over 18 years old and possessing full legal capacity. Those with undischarged bankruptcy cannot assume this role.

On the other hand, foreigners need to:

  • Appoint a local director.
  • Employ a registered filing agent to register their company since foreigners are unable to self-register their company in Singapore.

Consider these approaches to appoint a local director

Hire a local director who is either Singaporean, permanent resident or has applied for an Entrepass.

  • Choose a nominee director for your new company.
  • First obtain an EntrePass to set up the company.
  • Agree with the appointee that he or she will not get involved in your business. The appointee will not have control over the company’s bank account.

As a result, you will continue to be the sole owner of the company and its corporate bank account.

Can an Employment Pass Holder Register a Singapore Company?

Yes. Those in possession of an Employment Pass can indeed start their own company in Singapore and have 100 % control over its stock.

On the other hand, because they were hired by a Singapore firm which obtained their EP for them, they cannot act in their own company as local or resident director. Consequently, they have to recruit a director at the time of incorporation.

How Much Does it Cost to Incorporate a Company in Singapore?

In fact, foreigners (non residents) cannot directly register a company in Singapore. It requires them to delegate an authorized registered filing agent.

The ACRA fees for:

  • S$15 Company name application (60 days reserved, extension requires additional fees)
  • Company registration fee is S$300

Following a successful registration, ACRA sends an Incorporation Email. In Singapore it is equivalent to the incorporation certificate. It’s hard copy is available for purchase at reasonable charges.

How to start a business in Singapore

Registering a Singapore Company for Foreign Individuals

It takes only 2 procedures to establish a company in Singapore.

The second is choosing the right structure for your company. It may even change the way your business is taxed.

A foreign individual can register the following businesses in Singapore:

  • Private Limited Company
  • Sole Proprietorship
  • Limited Liability Partnership

Private Limited Company (Pte Ltd)

Private limited companies are thus popular choices for Singapore company registration.

  • It may have anywhere from one up to 50 shareholders (owners).
  • At least one local director must be an ordinary resident of Singapore.
  • A private limited company has a legal status independent of its owners.
  • It is endowed with the same rights as a natural person.
  • It has a perpetual existence.
  • The liability of shareholders in Pte Ltd is limited to their investment.
  • It pays corporate tax (0%-17%).

Both banks and financial institutions are more likely to trust Pte Ltd than a sole proprietorship or partnership. Expanding business operations doesn’t involve any problem for them in raising capital.

Sole Proprietorship

This is not an incorporated company, but a sole proprietorship. Only when a business is of extremely low risk will we recommend this structure to clients.

  • It also lacks legal status apart from that of its owner.
  • It is unlimitedly liable for the debts and losses of its owner.
  • Income from a sole-proprietorship business is treated as personal income.
  • Personal income tax (0-22 %). paid by the owner.

Limited Liability Partnership (LLP)

According to the Singapore Company Law, two or more people and corporations may register as a partnership.

  • LLP is a separate entity in law from its owner.
  • LLP is held liable only if the owners are found to have been careless, or done, or failed to do something which caused loss.
  • However, the partners must still pay personal income tax (0 to 22 %) on LLP income.

The limited liability partnership brings together the advantages of both partnership and company. This enables them to put together their various complementary skills & make a profit.

Singapore Company Registration for Foreign Companies

Registration of foreign companies in Singapore represents a marvellous opportunity for all SMEs throughout the world. According to their own business goals, they can establish a.

  • Subsidiary Company
  • Branch Office
  • Representative Office

Subsidiary Company

Foreign firms benefit most by including a subsidiary company. The subsidiary company is itself a kind of limited liability company.

  • It can be 100 % owned by its parent company.
  • A subsidiary company is a different entity from its parent company.
  • This means the parent company ’ s liability is limited to its share capital.
  • The debts and losses of the subsidiary are not paid out of parent assets.

Once the parent firm has established a subsidiary company it will have to send someone specialist to take charge in Singapore. For working in Singapore, the employee will require an employment pass.

Branch Office

In Singapore, most foreign SMEs choose to register a branch office.

  • After registration, a branch office becomes a legal entity itself.
  • This is an extension of its parent company.
  • All the debts and liabilities of the branch office shall be borne by its parent company.

At least one ordinarily resident Singaporean must be employed by the branch office.

Representative Office

A foreign firm may establish a representative office in Singapore. The main aim is to study the commercial feasibility of the Singaporean market.

It conducts feasibility studies.

  • A representative office is not a legal entity independent from its foreign parent company.
  • It should also have no more than five employees.
  • It may not engage in profit-making operations.

The parent company must have been in business for more than 3 years and annual turnover exceeds S $ 250,000. If it is dissolved, the representative office is de-registered.

A Few Other Essential Notes

If you’re eyeing expansion for your ongoing business, setting up a Branch Office of your parent company is an option worth considering. Engaging professional corporate service provider like FastLane Group can streamline the incorporation process in Singapore without hassle.

To find suitable business spaces in Singapore, approaching the Economic Development Board is advisable as they offer a variety of location choices. Singapore provides several cash grant schemes tailored to support startup companies, accessible to both locals and foreigners without limitations.

For guidance on these schemes and more, consulting with government agencies like the Standards, Productivity and Innovation Board, and International Enterprise Singapore is recommended. Despite this, it’s crucial to uphold the Fair Consideration Framework of MOM, prioritizing local professionals over foreign hires. Utilizing online job portals for recruitment or advertising job openings can be helpful in this regard.

Compliance with regulatory authorities such as ACRA, MOM, and IRAS (Inland Revenue Authority of Singapore) is imperative while conducting business in Singapore. Adhering to their laws and regulations is a must.

Understanding how Singapore simplifies rules for foreigners aiming to establish a business is crucial. It’s essential to analyze available facts to address whether foreigners can register a company in Singapore. Maintaining focus on the goal of registering a business in Singapore is key.

We provide guidance to our clients on selecting the most suitable company structure for their specific purposes. Choosing the right business structure is vital as it impacts the taxation and operations of the new business entity. Contact FastLane Group for free consultation.

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