How Can a Foreigner Start a Business in Singapore
Starting a Business in Singapore
“Is it easy to register a company in Singapore for a foreigner?” Many foreign entrepreneurs desperately search reliable info on, “How to start a business in Singapore for a foreigner?”
Every bit of useful information helps them in making hard & fast decisions about the move. The good news is that starting a business in Singapore for foreigners is quite easy. If you are first-timer, take advice from a reliable registered filing agent.
How can Foreigners Register a Company in Singapore?
Just like a local Singaporean, a foreigner can register a company and own its 100% shareholding without facing any difficulties.
In fact, anyone over the age of 18 years can start a company in Singapore. Provided that he has not been convicted of any legal offence or bankruptcy.
In addition to the Singaporeans, its Permanent Residents (PR), and holders of Employment Pass, EntrePass, Dependents Pass, can register a company and be its shareholders.
It requires your physical presence in Singapore at the time of setting up your company.
*All prices exclusive of 9% GST (Goods and Services Tax)
Key Requirements for foreigners to set up a new business in Singapore
How to Appoint Local or Resident Director
Locals can act as the resident director while self-registering their company on BizFile+ portal. The shareholders of the company must pass a resolution to appoint the local director. Choose a person over 18 years in age and of full legal capacity. An individual with undischarged bankruptcy cannot take this position.
However, foreigners must:
- Appoint local director.
- Engage registered fling agent to register their company, as foreigners cannot self-register their company in Singapore.
Options in Appointing Local Director
- Option 1: Employ a Singaporean, Permanent Resident, or EntrePass holder as local director.
- Option 2: Appoint a nominee director for your new company.
- Option 3: Form a company by first applying & acquiring EntrePass.
**Sign a contract with the appointee to keep them out of your business activities. The appointee will not be a bank signatory.
**You, alone, will have full control over the company and its corporate bank account.
Starting a Business in Singapore
Can an Employment Pass Holder Register a Singapore Company?
Yes!
Holders of employment pass can register a company in Singapore. They can also own its 100% shares.
Since they are working for their Singapore employer who got the EP for them, they cannot work as a local or resident director of the company they own. They will have to hire one at the time of company set up.
Also Read: Singapore Payroll Services
How Much Does it Cost to Incorporate a Company in Singapore?
As a matter of fact, non-residents or foreigners cannot self-register a Singapore company on their own. They have to appoint a registered filing agent for it.
The ACRA fees for:
- Company name application is S$15 (Reserved for 60 days, to extend it, you need to pay extra fees)
- Company registration fee is S$300
After the successful registration, ACRA sends you an Incorporation Email. In Singapore, it serves as the Incorporation Certificate. You can obtain its hard copy by paying appropriate fees.
Registering a Singapore Company for Foreign Individuals
You need to complete only 2 procedures to set up a Singapore company.
Choosing the right business structure is the key to successful company registration in Singapore. It can affect the taxation of your business.
A foreign individual can register the following businesses in Singapore:
- Private Limited Company
- Sole Proprietorship
- Limited Liability Partnership
Private Limited Company (Pte Ltd)
A private limited company is a favoured business structure for Singapore business registration.
- It can have 1-50 shareholders (owners).
- It needs at least one local director who is ordinarily resident of Singapore.
- A private limited company has a separate legal identity from its owners.
- It has the rights of a natural person.
- It has perpetual existence.
- Pte Ltd limits the liability of its shareholders to the amount they have invested in its shares.
- It pays corporate tax (0%-17%).
The banks & financial institutions consider Pte Ltd more credible than a sole proprietorship or partnership. They can easily raise funds for expansion of their business activities.
Sole Proprietorship
A sole proprietorship is not an incorporated company but a business firm. We advise this business structure to our clients only when their business is highly risk-free.
- It has no separate legal entity from its proprietor.
- The owner has unlimited liability towards its debts and losses.
- The income of a sole proprietorship is considered as that of its owner.
- The owner pays personal income tax (0%-22%).
Limited Liability Partnership (LLP)
Under the Singapore Company Law, two or more individuals and/ or corporate can register a partnership.
- LLP has separate legal existence from its owners.
- Its liability of its owners depends on their carelessness, actions or inactions leading to LLP’s loss.
- The partners need to pay personal income tax (0%-22%) on their income from LLP.
A limited liability partnership combines the benefits of a partnership and a company. It allows them to pool their complimenting skills & earn a profit.
Singapore Company Registration for Foreign Companies
Foreign company registration in Singapore offers a great opportunity for SMEs from all over the globe. Depending on their business goals, they can choose to form a,
- Subsidiary Company
- Branch Office
- Representative Office
Subsidiary Company
Incorporating a subsidiary company is most beneficial to foreign corporates. A subsidiary company is a form of limited liability company.
- The parent company can own 100% of its shares.
- A subsidiary company is a separate entity from its parent company.
- The parent company’s liability is limited to its share capital.
- The parent’s assets are not used to pay the debts and losses of the subsidiary.
After forming a subsidiary company, the parent company will have to relocate one of its employees to Singapore to take its charge. The employee will need an Employment Pass to work in Singapore.
Branch Office
Mostly foreign SMEs prefer to register a branch office in Singapore.
- A branch office is a legal entity after registration.
- It is an extension of its parent company.
- The parent company is responsible for all the debts and liabilities incurred by its branch office.
The branch office must hire at least one ordinarily resident Singaporean.
Representative Office
A foreign company can set up a representative office in Singapore. Its purpose is to research the business potential of the Singaporean marketplace.
It conducts feasibility studies.
- A representative office does not have a legal identity separate from its foreign parent company.
- It must also appoint not more than 5 employees.
- It cannot indulge in any profit-making activities.
The parent company should be an established company for more than 3 years, with an annual turnover of more than S$250,000. In case it gets dissolved, the representative office gets de-registered.
Read on: Comparison of Subsidiary Company, Branch Office, & Representative Office
A Few Other Essential Notes
- If you are looking for expansion of your on-going business, you can set up a Branch Office of the parent company. For this, you should approach an agent for incorporating a company Singapore without any hassle.
- You can check with the Economic Development Board for availing a viable business space in Singapore. There you can find a variety of location choices.
- Singapore has many cash grant schemes to support start-up companies.
- You can consult with the various government agencies such as Standards, Productivity and Innovation Board and International Enterprise Singapore.
- There is no limitation on foreigners from availing these schemes.
- As per the Fair Consideration Framework of MOM, you must prefer locals over foreign professionals. Thus, you may refer to online job portals for searching for candidates or advertising job openings.
- While you are in Singapore, you must abide by the requirements of regulatory authorities very rigorously. Make sure to adhere to the laws of ACRA, MOM, IRAS (Inland Revenue Authority of Singapore) by any means.
Know how Singapore has simplified rules to make it easy for foreigners to set up a business in Singapore. Analyse available facts and resolve, “Can foreigners register a company in Singapore?” Most importantly, do not get sidetracked from your goal of registering a business in Singapore.
We advise our clients on registering the most suitable type of company for their purposes. Choosing the right business structure for starting a business in singapore is an important decision as it can affect the taxation of the new business entity.
Yes. You, as an EP holder, can register a company in Singapore like everyone else at any time. However, you need to know more if you also want to be its Singaporean local director. This vital info can save you some trouble and headache while starting your business.
The right time to open a corporate bank account is after successful company registration and before starting your business activities. Such an account is necessary for your business' financial transactions.
There are more than 127 banks in Singapore. Depending on your business needs, you can choose any of them for your purpose. You will need the following documents to open a bank account.
- Accurately filled & duly signed forms for opening a corporate bank account
- Residential address proof of stakeholders in the company like directors, other signatories, & the ultimate beneficiary owner
- Certified copy of Certificate of Incorporation of your company
- Company’s business profile from ACRA
- Signed resolution to open account by the Board of Directors & Signatories to the account
- Certified copy of company’s M&AACertified copy of company’s M&AA
- Certified copies of Passport or of SingPass
- Certificate of Incumbency & Certificate of Good Standing(For Offshore Accounts Only)
It is easy to register a company in Singapore. With all the required incorporation documents in hand, a commonly purposed business can be incorporated within 1 day. However, in practice, we can register your Singapore business in 1-3 days.
Foreigners and locals over the age of 18 can register their Singapore companies easily. Foreigners can own 100% equity of shares in their company. It gives them ownership of the company.
By law, companies are legal persons and have rights similar to natural born persons. It means, as individuals, local and foreign companies, too, can register a Singapore company. The parent companies can own 100% equity or shareholding in the new company.
Foreigners can register a company without immigrating to Singapore. They need to appoint a local director at the time. Afterwards, they can go back and direct their company from their native country.
If they want to form their Singapore company and work as its local (resident) director, they need to immigrate. They can do so only after acquiring an appropriate work pass. Without the proper work pass or visa, they cannot work in Singapore.
Yes. Appointing a corporate secretary for your Singapore company is necessary. You need to do so within 6 months of the date of company incorporation.
If you are hiring a company secretary for a public company, you need to appoint a certified secretary from a reputable institute.
If you are hiring for a private limited company, make sure that the appointee is qualified and well versed with the tenets of the company Act. They also need experience in handling the duties of the job.
ACRA, the Company Registrar, considers secretaries as one of the officers of the company. They liaison with the authorities and world outside of the company and enables its managers to work without distraction.
Anyone over the age of 18 years can set up a Singapore company and be its shareholder (owner). As a shareholder, you have the right to appoint a local director (employee).
Unlike Singapore citizens and its Permanent Residents who can incorporate a company and act as its local or resident director (employee), Foreigners need a work pass like Entrepreneur Pass to act in this capacity. With the pass, you can relocate and work in Singapore. You can apply to the Ministry of Manpower & get this pass.
Foreigners who don't have work pass can choose to appoint a nominee director, an individual who is ordinarily resident of Singapore to act as your local director. It is essential to have at least one to complete the process successfully.
*Being a shareholder (owner) of a company and working for it as a local director (an employee) are two different things.
The Employment Pass, Dependent, and other pass holders can also set up a company and be its shareholder. However, they need to appoint a nominee director to complete the registration process. They cannot act as its resident director or take any other position in it as its employee.
As a shareholder, you are the owner of your company. You can also work for it as its local director. If you choose to do so, you can expect a salary from the company. So, there is a distinction between being an owner and the local director of a company.
You can also appoint one of your friend or a family member (over 18 years old) as the local director. They will have to work within the framework and act in the best interest of the company.
They will need to take care of the following tasks:
- Company's statutory requirements
- Calling Annual General Meeting of the company
- Filing of its annual returns with authorities
- Acquiring a local registered address for the company
- Maintain of statutory registers like register of members, directors, managers, secretaries, auditors, directors’ shareholdings & charges
- Passing resolution for the opening of a bank account
- Appoint company officers including directors, auditors and company secretary
- Make certain of corporate governance
- Discharge corporate social responsibility
- implement ethical & socially responsible practices
- Interact with society
The age-limit requirement for registering a Singapore company is the same for both local and foreign entrepreneurs. You have to be over 18 years of age to do so.
In addition, you need to fulfill the following requirements to successfully set up your company:
- A minimum initial paid capital of S$1
- At least one shareholder (maximum 50)
- At least one local (residential) director
- At least one qualified company secretary
- Registered local address for the company
Make sure to appoint a company secretary within the 6 months of the incorporation date of your company. It is one of the basic criteria.
As a shareholder, you are the owner of your company. You can also work for it as its local director. If you choose to do so, you can expect a salary from the company. So, there is a distinction between being an owner and the local director of a company.
You can also appoint one of your friend or a family member (over 18 years old) as the local director. They will have to work within the framework and act in the best interest of the company.
They will need to take care of the following tasks:
- Company's statutory requirements
- Calling Annual General Meeting of the company
- Filing of its annual returns with authorities
- Acquiring a local registered address for the company
- Maintain of statutory registers like register of members, directors, managers, secretaries, auditors, directors’ shareholdings & charges
- Passing resolution for the opening of a bank account
- Appoint company officers including directors, auditors and company secretary
- Make certain of corporate governance
- Discharge corporate social responsibility
- implement ethical & socially responsible practices
- Interact with society
Hiring your friend or a family member as the local director may work for you perfectly than cause you any harm. When you have to take a break from company affairs, you can consult with a competent lawyer and can choose to give them a limited power of attorney. It will allow them to discharge their additional duties. Surely, you trust them not to steal your company.
