Singapore is known around the globe for its ease of business, generous governmental policies and idyllic location. Compared to many other countries, starting a business is a relatively simple process, however it still has its complications. It’s important that you prepare in-depth for company incorporation in Singapore to avoid the many simple mistakes that can be both time consuming and costly. Here are 5 things you should know before you begin the process of Singapore business incorporation.
1. Define Your Business Structure
Before you begin your day to day operations in Singapore, you should have created an in-depth plan for your business structure. You should be able to answer questions about your business which may be asked during the incorporation process. These include but are not exclusive to:
- What niche are you operating in?
- What is your startup capital?
- What are your yearly revenue projections?
- How quickly do you plan on scaling your business?
- How many shareholders will you have?
- How many employees do you have?
By knowing the answers to each of these questions, you can choose the correct legal structure for your business when starting the incorporation process. Compared to many other countries, Singapore offers a plethora of legal entity structures for new businesses. These include Limited Liability Companies, subsidiaries, branch offices, representative offices, proprietorships and partnerships. Each of these options will impact several factors such as the way you expand your company, tax exemptions and credibility. If you’re unsure as to which structure is the best for you, you can talk to an incorporation service provider to review your options. Having a plan in advance will help you to come to a faster conclusion.
2. Choose The Best Company Name
After constructing a comprehensive plan for your business, it’s time to choose a name that represents your business activities. This will then be reviewed by the ACRA (Singaporean governing body) for business incorporation. You will be required to fulfil particular criteria including:
- Must not contain any obscene words.
- Must not infringe on any trademarks.
- Must not be too similar to any existing business.
- A list of 3 different options for you to choose from.
You can also begin searching for a website domain that fits your business as this will help with the incorporation process.
3. Begin Preparing Your Registered Business Address
During company incorporation in Singapore, the ACRA will require you to submit an official address for your business. This is where all your mailing and communications will be sent to and therefore certain criteria must be met. These include:
- An office space that is open for at least 5 hours during a normal business day
- Official property that has been designated for commercial, office or industrial purposes within Singapore
- It cannot be a P.O. box, it must be an actual location
- Virtual offices and coworking options are also available within certain areas in Singapore. If you believe this is the best option for you, you should discuss this with an incorporation service provider.
4. Find A Resident Director
If you’re a foreign entity looking to incorporate your business in Singapore, this next step is essential. You must choose a director for your company who fits certain criteria. According to the official ACRA website, these include:
- A Singapore citizen, Permanent Resident, or holding a Singapore Pass such as the Entrepreneur Pass.
- A director may also be an Employment Pass (EP) holder. However, in these cases the director must first get a Letter of Consent (LOC) from the Ministry of Manpower.
- At least 18 years old.
- Have a clean criminal record.
- Never have declared bankrupt.
If you meet each of these criteria, then you can be the director of the business yourself. If you do not, then your best option is to look for a trusted business partner. If you are the sole partner of your business, then many incorporation service providers can provide a nominee director service so that you can meet these requirements.
5. Look Into Hiring A Company Secretary
As well as a business director, you will also need an official company secretary to incorporate in Singapore. These are the criteria noted on the official ACRA website:
- A Singapore citizen, Permanent Resident, or holding a Singapore Pass such as the Entrepreneur Pass.
- At least 18 years old.
- Appointed within six months of company incorporation.
Corporate compliance is extremely important in Singapore and therefore your company secretary will be able to provide you with guidance regarding compliance issues. It’s important to note that a director of your company cannot be the company secretary (unless you have multiple directors). If you need assistance with this process, many incorporation services can provide you with a corporate secretarial service. As a result, you can outsource all secretarial affairs to professionals who will be fully accountable to your company.
