According to one world bank report, Singapore ranks second among 190 surveyed economies as the easiest place to set up a business for locals and foreign nationalities. The Lion City scores highly due to its straightforward business incorporation procedures.
However, while the process is straightforward, you must meet the prerequisite requirements for each step to incorporate your business within the desired time frame. Therefore, you must conduct prior research on each step to prepare and inject fluidity into the incorporation process. Therefore, below is a cheatsheet featuring top considerations to help make incorporating your business in Singapore a breeze.
The Company Name
A company name is its most significant identifier; therefore, registering your company name is the first step towards incorporating your local business in Singapore. Singapore’s Accounting and Corporate Regulatory Authority (ACRA) is the body in charge of company name registration in the city-state.
The body lays out the following criteria for registering your company’s name. First, the name must be unique or distinct from any other existing business. Therefore, you must check your chosen business name’s availability on ACRA’s online business registration and filing portal as part of the Company Incorporation Singapore procedure. The portal is easy to navigate and will show you if any incorporated businesses with a similar name exist.
You can modify your business name to retain essential elements while remaining unique in case an incorporated business already exists with a similar name. However, some generic modifying words do not qualify as sufficiently different and would likely lead to a second rejection. The ACRA features a list with said modifying words to help you avoid a rejected application.
Besides being identical or similar to another business, the business name should not contain elements of patented brands within or outside Singapore. Lastly, the business name should be free of profanities or words the ACRA is likely to consider vulgar or obscene.
The ACRA takes as little as 15 minutes to approve your name once you pay the required S$15 fee and if the name meets the laid out criteria. However, company names that include technical names like “school” or “hospital” must undergo scrutiny by the requisite authorities before receiving ACRA approval. Business names requiring authority approval have a longer processing time, taking 14-60 days.
Lastly, the ACRA reserves the approved business name for 120 days, buying you time complete other incorporation procedures. However, the name loses its reserved status if you fail to incorporate the business when the 120-day window lapses.
Company Type/ Legal Entity Structure
As highlighted below, Singapore classifies businesses into four entity structures or vehicles for doing business.
- Sole proprietorship (sole owner)
- Partnership: Has at least two partners
- Limited partnership (LP): Features at least two partners, one acting as a general partner and the second as a limited partner, and is not a separate entity from the partners.
- Limited liability partnership (LLP): Operates like a partnership while existing as a separate legal entity from the business, akin to a private limited company.
Each structure has advantages and disadvantages, depending on the business operation model your company intends to adopt. For starters, they have different liability and capital contribution requirements.
Minimum Company Setup/ Key Personal Appointments
Another crucial requirement in setting up a business in Singapore is including shareholders and appointing resident directors and a company secretary. A company must have at least one shareholder who can be a Singaporean citizen, resident, or foreign national.
The country’s laws allow 100% local or foreign shareholding, and their details appear on public records. Company shareholders in Singapore have several rights and responsibilities, including paying the full share price, attending meetings, voicing interests and opinions, rights to dividends, and dissolving the company.
Second, the company must appoint a resident director who must either be a Singaporean citizen or a permanent Singapore resident. However, foreign nationals who are EntrePass holders qualify for the resident director position.
Besides citizenship matters, a resident director must be at least 18 years old and mentally and physically fit to conduct their duties effectively. They should also be free of previous criminal malpractice convictions and not have declared bankruptcy at the time of the appointment.
Lastly, any business entity seeking incorporation as a company in Singapore must appoint a company secretary. The company secretary must be a citizen, resident, or foreigner holding an EntrePass and a Singaporean residential address. Their primary function is to ensure that the company complies with regulatory requirements.
Have A Physical Registered Office Address
The ACRA requires that any business seeking incorporation into a company must have an official physical business address registered as an office. Its primary function is as a registry whereby the business stores crucial documents and files required by the law. Additionally, the address shall function as the company’s mailing and communications department, whereby relevant authorities send official notices and documents.
Besides being a registered physical address (not a P.O. box), the address must meet the following criteria.
- It must be open and accessible for at least five hours during all business days.
- It must be in a designated commercial or industrial space, not a residential one.
Co-working spaces qualify as official physical addresses.
A Company Constitution
A company’s constitution lays out its governance and structure, including shareholders’ roles and responsibilities. It includes chapters like the business’s Memorandum of Association, Article of Association, and excerpts from Singapore’s Companies Act.
Conclusion:
Incorporating a company in Singapore may seem daunting if you lack a sense of direction. However, this cheat sheet has you covered, highlighting the most crucial steps to take while incorporating your business to avoid unnecessary delays due to lack of compliance.
