Company registration in Singapore for foreigners
A complete guide
Singapore might be the best choice for foreigners to register a company in 2024
Do you know why Singapore is the perfect choice for starting a business in Singapore for foreigners? Entrepreneurs and companies from around the world find Singapore attractive because of its strategic location, welcoming business environment and strong legal framework. The city-state is famous for its open economy and low corporate tax rates. Singapore also offers strong intellectual property protections, political stability, a skilled workforce and top-notch infrastructure. So why wait? Consider starting your own business in Singapore today! We’re always here to guide you through the registration journey.
Requirements and Rules for Company Registration
Unlike locals, foreigners are limited to certain guidelines that they have to follow when it comes to registering a company in Singapore for foreigners. Here’s a detailed guide on what foreigners can and cannot do when starting a business in Singapore, along with a step-by-step overview of the process.
What Foreigners Can Do
- Have Full Ownership of the Company: Foreigners can own up to 100% of the company as there are no restrictions on foreign ownership.
- Select Business Activities: Foreigners can choose any business activity that complies with local laws. The appropriate SSIC code must be selected to classify the business activities accurately.
- Increase Paid-Up Capital: While the minimum paid-up capital requirement is S$1, this amount can be increased as necessary.
- Reserve a Company Name: Foreigners can propose and reserve a company name, ensuring it complies with ACRA’s naming guidelines.
The next two requirements rather fall into category What Foreigners Should do, because these steps are compulsory, according to Singapore regulations
- Engage a Registered Filing Agent (RFA): Foreign entrepreneurs cannot self-register a company and must engage a filing agent. These agents act as intermediaries, carrying out transactions with ACRA on behalf of their clients.
- Provide Required Documentation: Foreigners can submit the necessary documents for incorporation through their RFA, including passports, proof of overseas residential address and additional Know-Your-Client (KYC) information.
What Foreigners Cannot Do
- Self-Register the Company: Foreigners are not permitted to register the company directly with ACRA. They must use the services of an RFA.
- Serve as the Sole Director Without Local Representation: A company must have at least one director who is a Singapore Citizen, Permanent Resident (PR), Employment Pass or EntrePass holder.
- Register Without a Physical Address in Singapore: Foreigners cannot use a P.O. Box as their registered business address. A physical address in Singapore is required.
- Skip Compliance Requirements: Foreigners cannot bypass requirements such as Know-Your-Customer (KYC) due diligence procedures implemented by all RFAs in SIngapore, in line with the recent regulations. Likewise, they can’t avoid appointing a company secretary within six months of incorporation or maintaining accurate records and filings as per ACRA regulations.
Register Under a Prohibited or Inappropriate Name: Foreign entrepreneurs cannot register their company under a name that violates the company name guidelines or in other words is vulgar, obscene or violates existing trademarks and copyrights.
Steps for Company registration in Singapore for foreigners
Company registration in Singapore for foreigners involves several specific requirements and steps. Foreign entrepreneurs must apply through the ACRA Company Registrar and engage an RFA. They provide dedicated managers who assist throughout the incorporation process, ensuring every step with ACRA is completed smoothly.
Foreigners must appoint at least one director who is 18 or older and eligible to hold the position. One director should be a Singapore Citizen, PR or EntrePass holder. The company should have at least one shareholder, with a maximum of 50 shareholders allowed, including individuals or other companies. It is impossible to register a company if you don’t have a physical registered address in Singapore. Appointing a company secretary responsible for managing and filing necessary compliance documents should be done within six months of incorporation.
The incorporation process begins with name approval from ACRA, which usually takes less than an hour if there are no complications. The approval is usually instant unless the name involves regulated activities like publishing, education or medical services. Ensure the proposed name follows copyright and trademark guidelines, is not vulgar or obscene, and is not already reserved. Once approved, the name reservation is valid for 60 days, with an option to extend for another 60 days by submitting a request just before the expiry date.
Finally, you have to file your incorporation application with ACRA and submit the necessary documents. These include the company name, business activities and SSIC code, shareholders’ and directors’ details with KYC information, registered Singapore business address, share capital details and the company constitution. For non-residents, required documents include a photocopy of the passport, proof of overseas residential address and additional KYC data such as a bank reference letter and personal business profile. Once your filing agent collects all necessary documents, they will proceed with the registration via the BizFile+ portal.
Local Director Requirements - Solutions for Foreigners
You cannot start a business in Singapore unless you have at least one director who is a resident. For foreigners seeking to fulfill this requirement, there are several solutions:
- Nominee Director Services:
Many corporate service providers in Singapore offer nominee director services. These services involve appointing a local resident director for compliance purposes. The nominee director typically does not participate in the actual management of the company but serves to meet the legal requirement. You can contact us today to get matched with your ideal nominee director! Our nominee directors have years of professional experience working in this capacity.
- Employment Pass (EP):
Foreigners can apply for an EP, which allows them to work and reside in Singapore. Once granted an EP, they can act as the local resident director of their own company. This solution is ideal for those who plan to actively manage their business in Singapore.
- EntrePass:
The EntrePass is designed for foreign entrepreneurs who wish to start and operate a business in Singapore. By obtaining an EntrePass, foreigners can meet the local director requirement while also receiving the right to live in Singapore.
- Local Partner or Director:
Foreigners can collaborate with a local Singaporean or PR to act as the resident director. This person can be a business partner or a trusted associate who is willing to fulfill the statutory role.
- Dependent Pass with Letter of Consent (LOC):
Spouses of EP holders who are on a Dependent Pass can apply for a Letter of Consent (LOC) to work in Singapore. With an LOC, the dependent can be appointed as the local resident director.
Can a foreigner register a company in Singapore online?
It is possible to register a company in Singapore for a foreigner online through the ACRA’s BizFile+ portal. However, foreigners cannot do it directly. As mentioned above, they must engage a licensed agent to handle the registration process on their behalf. By working with an RFA, foreign entrepreneurs can efficiently register their companies online while ensuring compliance with Singapore’s regulations.
Opening Bank Account
After a successful company registration process in Singapore, you can move on to the next essential step which is opening a corporate bank account. Having a bank account is necessary because it allows you to receive and make business-related payments and manage day-to-day transactions related to your business activities. It’s also a regulatory requirement in Singapore for companies to have a separate corporate bank account to maintain transparency and facilitate financial reporting. With a bank account, business owners will have a proper handling of tax matters, by segregating business finances from personal finances.
Required Documentation
Personal Documents
- Identification: Provide a passport copy for every director and shareholder, including the Ultimate Beneficial Owner (UBO), if different.
- Proof of Address: Submit proof of residence, such as a utility bill or bank statement. Non-English documents must be translated by an authorized translator.
Business Documentation
- Contracts: Supply contracts or draft agreements with suppliers or customers. If unavailable, email correspondence with potential partners discussing planned transactions may qualify too.
- Company Presentation: Prepare a clear and detailed presentation of your business, including the goods and services offered and operational regions.
- Company Website: Having a professional website is crucial.
- Resumes: Have resumes ready for key company figures.
- Shareholder Documentation: If the company has a corporate entity shareholder, provide documents for this entity and the UBOs behind it.
Bank Forms
- Bank Forms: Complete all bank forms for account opening, including a resolution for approving the account manager (signatory) and assigned roles for Internet banking.
Application Review Timelines
- Typical Review Time: After submitting your application and documents, the review process generally takes 2-4 weeks.
- Local Director Advantage: Applications submitted by a local director may be approved faster.
- Possible Delays: Processing times can vary depending on the bank and its review process, sometimes extending beyond the typical period.
For more information on how to choose a bank in Singapore, please refer to our comprehensive guide.
Cost of Registering and Owning the Company in Singapore
Company Registration Fees
A process of Company registration in Singapore for foreigners doesn’t differ much in costs compared to local business owners. The cost can be divided into two main categories: government fees and agent fees.
Government Fees
Company Name Reservation Fee: S$15
Company Registration (Incorporation) Fee: S$300
Agent Fees
While local residents may handle the registration process for only S$315, foreign entrepreneurs must engage an RFA which will add to the overall registration cost.
Additional costs may include bank account opening, company seal or official Certificate of Incorporation, which can be either immediate or deferred purchases depending on your needs.
Breakdown of Agent Fees
The cost of engaging a corporate service provider varies, but typical price ranges are:
- Agent Registration Fees: S$100 to S$500 (average S$200)
- Company Secretary: S$300 to S$1000+ per year (average S$500)
- Local Nominee Director: S$2,000 to S$5,000 per year (average S$3,000), often with a refundable security deposit equal to one year’s service cost.
- Registered Address: S$100 to S$500 per year (average S$250)
Expect to spend around S$3,000 to S$4,000 with a reasonably priced service provider for complete company registration, excluding the refundable deposit for the local director service and bank account opening.
Yearly fees
Because such business expenses as registered office address, company secretary and often the nominee director fees are ongoing, they usually account to the yearly cost of the company. With modest accounting expenses, the yearly cost of maintaining a company in Singapore can vary from S$3,000 to S$5,000.
Office
- Office Rental: Renting or leasing office space is a significant expense. Costs vary depending on location, size, and facilities.
- Utilities: Expenses for utilities such as electricity, water, internet, and phone services add to the overall office expenses.
- Office Supplies: Costs for office supplies such as stationery, equipment, and furniture contribute to operational expenses.
Staff
- Employee Salaries: Payroll expenses include salaries, bonuses, and benefits for employees.
- Employer CPF Contributions: Employers are required to contribute to the Central Provident Fund (CPF) for Singaporean and Permanent Resident employees. CPF contributions are calculated based on a percentage of the employee’s wages.
- Work Passes: If hiring foreign employees, work passes such as EP or S Passes may be required. These passes incur application and renewal fees.
Taxes
- Corporate Income Tax: Singapore has a competitive corporate tax rate, with profits taxed at a flat rate of 17%. Companies may be eligible for tax exemptions and incentives.
- Goods and Services Tax (GST): Companies must register for GST if their annual taxable turnover exceeds S$1 million. GST is currently set at 7% on the supply of goods and services in Singapore.
Withholding Tax: Companies making payments such as royalties, interest, or services to non-residents may be subject to withholding tax, which ranges from 0% to 22%.
Visas for Foreigners
Do Foreigners Need a Visa to Run Their Company In Singapore?
EntrePass for Entrepreneurs:
Entrepreneurs with experience or promising ideas can obtain the Entrepreneur Pass (EntrePass), a special long-term visa for those planning to start and develop businesses in Singapore. This visa is available for new businesses, whether already registered or still in the planning stage. Applicants must be over 21 years old, have relevant qualifications and experience and present a business idea with significant innovative or economic potential. They must intend to relocate to Singapore and own at least 30% of the business, which must be registered as a private limited company within six months of visa approval. For a more detailed guidance on EntrePass, refer to our guide.
Employment Pass (EP) for Directors:
This is the most common long-term visa for skilled workers, company owners and directors in Singapore. Initially issued for 1-2 years, it can be extended for 2-3 years, up to a maximum of 5 years. EP holders can bring family members to Singapore. To qualify, applicants must secure a job offer from a Singapore employer or have an employment contract with their own company. The minimum salary requirement is S$5,000 per month; but in reality, higher salaries are often needed to be paid in order to qualify. Candidates must have appropriate qualifications and experience for the job. The sponsoring company must demonstrate solid business performance, sufficient revenue to cover expenses and a physical office. For a more detailed guidance on Employment Pass, refer to our guide.
Want to know how much tax your company will pay?
Use our Corporate Tax Calculator to instantly calculate how much tax your company will pay depending on the net profit:
Click HereRoadmap to residency
Foreign entrepreneurs who wish to establish residency in Singapore have several pathways to consider:
- Obtain EntrePass or Employment Pass (EP):
Start by applying for an EntrePass as this will allow you to establish and operate your business in the country. Successful EntrePass holders have the opportunity to qualify for PR after successfully running their business for a few consecutive years.
As an alternative, you can work for a Singapore-based company and obtain an EP. EP holders can work towards PR by applying after residing and working in Singapore for a specified period, typically 2 to 3 years.
- Global Investor Program (GIP):
To explore permanent residency options in Singapore through investment you can consider the Global Investment Program (GIP). To qualify, candidates must invest a minimum of S$10 million in a new business entity or in the expansion of an existing business in Singapore. Alternatively, they can invest a substantial amount in a Singapore-based business or an approved investment fund. Eligibility is determined by meeting investment thresholds and other criteria set by the Economic Development Board (EDB). Successful applicants under the GIP can apply for PR for themselves and their immediate family members.
- Family Ties:
Family members of Singapore citizens or PRs, including spouses and children, may be eligible to apply for PR through family ties. Foreigners residing in Singapore on Long-Term Visit Passes (LTVPs) may qualify for PR after meeting residency and other specified criteria.
Business Registration Singapore: Conclusion
Singapore offers an exceptional environment for turning business ideas into reality. Whether you’re in finance, technology, biotech, healthcare or any other industry, Singapore provides the necessary framework for success. By understanding the business registration process, corporate tax system and post-setup tasks, you can navigate the journey of establishing your business in Singapore smoothly. With factors like efficient process of incorporation, attractive tax system, pro-business environment and access to banking services, you are well-equipped to start your entrepreneurial journey in Singapore!
How Foreigners Can Register a Company in Singapore
