Company formation in Singapore implies completing several steps. In the process of registering a company, one must consider the legal and accounting requirements imposed by Company Law and various accounting regulations.
Below, our accountants in Singapore explain the procedure of registering an enterprise in the city-state and the taxes you need to be aware of after incorporation. Feel free to get in touch with us for details on the services we can provide for you and your business.
|Types of companies available for registration
– sole trader;
– limited liability company (private and public).
Taxation of sole traders
|Sole traders are subject to the personal income tax ranging from 0 to 22.5%
Taxes imposed to partnerships
Members of partnerships must pay the personal income tax if they are natural persons and the corporate tax if they are companies.
|Taxation of corporate forms
|Corporate tax of 17%; exemptions from the corporate tax are also available for certain types of income.
|Taxation of holding companies
Holding companies are subject to different tax regimes in accordance with their use: investment based or financial based.
|Corporate secretary requirements (if any)
Yes, private and public companies must appoint corporate secretaries.
– income taxes;
– social security contributions.
|HR and payroll support (YES/NO)
Yes, we offer support in payroll in Singapore.
|Support in applying for tax incentives (YES/NO)
Yes, we can assist in applying for tax benefits under various schemes enabled by the government.
|Assistance in GST registration (YES/NO)
|Yes, you can rely on us for support in GST registration and taxation in Singapore.
|GST rates in Singapore
– 9% standard rate in 2024
|Access to double tax treaties
Yes, foreign companies can access approximately 100 double tax agreements.
|Audit services (YES/NO)
Yes, we also have a team of auditors in Singapore.
|Industry-oriented services available (YES/NO)
Our services are oriented to companies operating in industries that are subject to special tax regulations.
– tax filing services;
– tax compliance;
– support in filing for financing, etc.
|Legal forms available for foreign companies
– liaison office
Definition of tax residence for companies
|Tax residence refers to the place where the general management or business operations are completed.
Tax registration requirement (YES/NO)
Yes, companies need to register with the Inland Revenue Authority (IRAS).
|Local bank account required (YES/NO)
|Yes, Singapore companies need local bank accounts.
|Mandatory legal address
|Taxation of subsidiary companies
Subsidiaries are treated as domestic entities, therefore will pay the corporate tax on their worldwide income.
|Taxation of branch offices
Branches are non-domestic entities, therefore they will pay the corporate tax on the income generated in Singapore.
|Taxation of liaison offices
The liaison office does not pay the corporate tax, as it cannot engage in economic activities.
|Financial year in Singapore
The financial year is usually the same as the calendar year in Singapore, except for newly-registered businesses.
|Withholding tax rates in Singapore
|The standard withholding tax rate is 15%, however, other rates also apply (10% for royalties payments) in the case of non-resident companies.
|Capital gains taxes
|Assistance for small companies (YES/NO)
Yes, we offer support to small enterprises.
|Tax planning solutions (YES/NO)
|Support in filing tax returns (YES/NO)
|XBRL filing services available (YES/NO)
|Yes, we can offer support in filing tax returns under the XBRL system.
Table of Contents
Company registration steps in Singapore
When dealing with company formation in Singapore, here is what you need to know:
- you first need to reserve a trading name;
- you must also have the incorporation papers drafted and notarized;
- you must also open a bank account with a Singapore bank;
- the documents must then be filed with ACRA (the Accounting and Corporate Regulatory Authority);
- you must obtain a tax identification number;
- you can also register the company for GST, however, this is not a requirement in the first stages of the incorporation procedure.
As part of our company incorporation packages, our accounting firm in Singapore can assist with the registration for taxation and obtaining a GST number. You can also rely on us for accounting services after the incorporation has been completed.
Types of businesses that can be set up in Singapore
Singapore is quite offering in terms of legal forms that can be used to launch a business. Among these, you can take notice of the following:
- the sole proprietorship which is available for single entrepreneurs, and comes with certain tax advantages;
- the partnership which can be divided into general and limited;
- the limited liability company with its two forms – private and public.
Foreign companies can also establish branches and subsidiaries for developing commercial activities and liaison offices for marketing purposes. You can rely on us for bookkeeping services in Singapore for each and every type of entity presented above.
Here is also an infographic on this subject:
Company formation documents in Singapore
The Singapore company formation process implies having drafted and authorized various documents in accordance with the type of entity selected. For the simple ones, namely sole trader and partnership, an application form, respectively a partnership deed is required. For corporate forms, the Articles of Association are the main papers that need to be created.
Our local specialists are at your disposal with complete company formation services based on the industry you want to operate your business in. This is also available with our Singapore accountants who can tailor their services based on sector-specific particularities.
Also, if you want to hire personnel, one of the key services we can provide is payroll in Singapore.
Local legal address – a mandatory requirement for all Singapore companies
One of the first steps in company incorporation in Singapore is having a suitable legal address for your business. From this point of view, you can choose between office buildings or industrial sites, depending on the type of activities to undertake.
The legal address must be written in the company’s bylaws and must also be recorded with ACRA. Also, should you decide to change it, the new address must be reported to ACRA.
We remind you that if you need assistance with the company registration process, we have dedicated specialists who can help you. Once it starts operating, you can count on us for one of the basic accounting requirements: bookkeeping in Singapore.
Opening a bank account for a Singapore company
There are several steps associated with the company formation process in Singapore, such as the bank account opening one. This is also one of the most important procedures, mainly because it is one of the lengthiest. Our specialists can assist with it, especially in the case of foreign investors who do not have the time to deal with it. The reason why it takes so long is the verifications that need to be completed by the bank.
Here is how you can reduce the waiting period associated with setting up a corporate bank account in Singapore:
- follow the recommendations of our accounting company in Singapore, as they have experience with several banks in the city-state;
- choose to work with a branch of a bank that also operates in your home country for faster due diligence procedures;
- make sure all the paperwork is in order so that you don’t have to come back for clarifications;
- start the bank account opening procedure as soon as possible, if you know you want to start operating sooner rather than later.
After completing the incorporation procedure, feel free to address our payroll company in Singapore if you need assistance in registering for employment purposes.
Company officers in Singapore
No matter if a company is incorporated by a local or foreign investor, the appointment of company officers remains the same. A Singapore company must have:
- at least one director;
- a secretary;
- an auditor (unless the company is exempt from this requirement) – our auditors in Singapore can offer more information on this condition.
The company director is in charge of overseeing the business’s operations. According to the Companies Act, the director must make sure that:
- records are kept accurately and on time;
- financial statements are compiled as necessary;
- the company adheres to corporate filing requirements and other disclosures.
In addition, the director is legally obligated to behave in good faith and with integrity when executing their authority, all while promoting the company’s interests. Choosing a competent management is one of the most important parts of company formation in Singapore.
Each corporation is required to have a minimum of one local Singapore resident as a director.
The main requirements for the director are:
- he/she must be at least 18 years of age;
- must have a legal capacity;
- he/she can be a Singaporean national, a permanent resident, an EntrePass holder, or an employment permit holder;
- he/she must have not been barred from serving as a director of a business.
Considering the director can also be deemed an employee, if you are considering employment registration from the beginning, you can rely on us for payroll services in Singapore.
The company secretary in Singapore
Within 6 months of company formation in Singapore, enterprises are required to designate a company secretary. This position cannot be unfilled for longer than 6 months, otherwise the directors risk a fine.
The administration of the business is under the supervision of the secretary. In addition, he or must make sure that every director and shareholder is aware of their legal responsibilities, which include filing annual returns.
A secretary’s duties can change based on what the demands of the business are. Here are a few instances:
- keep the company’s minute books and registrations up to date;
- oversee, participate in, and draft minutes for shareholder and director meetings;
- inform company directors of the dates by which yearly returns and any other necessary files must be submitted.
Also, within 3 months after establishment, unless the company is excluded from audit requirements under applicable parts of the Companies Act, it needs to appoint an auditor.
If you need guidance on taxation matters after handling the appointment of company officers, our accounting firm in Singapore is at your service.
One of the primary motives for company formation in Singapore is the available tax benefits. Establishing a business in the city-state is a smart decision because of the country’s business-friendly tax laws and breaks available to enterprises. You can also rely on us for bookkeeping services in Singapore.
Here is also a video on this subject:
Companies from a taxation point of view in Singapore
One of the reasons that investors from all over the world decide on company formation in Singapore is taxation. Here are the main aspects to consider:
- for companies, the corporate tax is 17%, however, not all companies must pay it (our accountants can clarify this aspect for you);
- the personal income tax which is levied on sole traders and members in partnerships applies progressively at rates ranging from 0% to 22.5%;
- the GST which has been altered in 2024, the rate was raised to 9%.
We remind business owners that they must also comply with audit requirements before filing tax returns. For this purpose, our auditors in Singapore are at their service. They are accredited by the Institute of Internal Auditors.
Decide on the financial year of your company
An important part of the Singapore company formation process is establishing the financial year. From an accounting point of view, this must span over a calendar year (except for newly registered businesses for which it can be shorter).
The importance of the financial year has two components:
- it establishes the accounting period and the filing dates for the tax returns;
- it also sets out the period of the year in which the corporate tax must be paid.
Please mind that tax filing periods depend on the type of structure used for your company in Singapore. These can be 7 or 8 months after the termination of the financial year.
Our accountants are at your service with advice on how to choose the financial year. You can also rely on our audit firm in Singapore if you need to have company accounts audited before filing.
What to consider as a foreign investor in Singapore
The Singapore company formation procedure for foreigners implies a few additional steps compared to the process completed by local entrepreneurs, namely:
- hiring a local professional to represent them in relation to all authorities;
- they must still meet the requirements for having a local director even if no one in the company plans to relocate to Singapore;
- the owners do not require a separate travel visa if they intend to incorporate their businesses without moving.
It is possible to run your business from abroad and use a visitor visa to come to Singapore to attend to business-related matters. With respect to financial matters, you can rely on our accountants in Singapore.
Accounting services for companies in Singapore
Running a business in Singapore is not difficult, especially since there are tailored solutions that you can use as a foreign investor. One of the most important is related to accounting. From this point of view, we have a team of accountants in Singapore who are at your disposal with various services, among which we would highlight the following:
- support in tax registration;
- payroll setup;
- financial statements preparation;
- tax returns filing;
- company secretary solutions.
All these services are tailored to the size and specific industry your company operates, so if you want to outsource its accounting, you can benefit from specialized services just like you would with an in-house department.
The Singapore economy in 2024
The Monetary Authority of Singapore (MAS) has projected that in 2024, there will be a significant decrease in the rate of inflation and a rise in the growth of the city-state’s economy. The Federal Reserve’s stabilization of interest rates and the expected rebound in Singapore’s exports suggest that the new year may be a turning point in Singapore’s financial development. Sectors like tourism, food and beverages, manufacturing, and trade are expected to contribute to the growth.
According to Singapore’s economic outlook for 2024, a few important points come to light:
- based on recent estimates, the GDP growth rate is expected to be approximately 2.3%;
- forecasts also suggest that inflation will average 3.4 percent, with the maximum possibly coming in at about 4%.
If you need support in company formation and accounting in Singapore, do not hesitate to contact us for a personalized experience.