For the entrepreneurs planning a Singapore company registration, there are a few choices in the business structures. The most favored among them is that of a private limited company (Pte Ltd). The other options open to the entrepreneurs are Sole Proprietorship and 3 types of partnerships namely, General Partnership, Limited Partnerships, and Limited Liability Partnership. However, if you have chosen to incorporate a Singapore private limited company, it shows your planning and determination to persist with your goals.
Singapore Company Registration
The business owners choose to incorporate a Singapore private limited company because it is the most dynamic and scalable business structure available. It is the right choice for the entrepreneurs with the fire in their guts and plans in their heads to make something big out of their new company. In the long run, a private limited company assists them in creating a brand name and eases the difficulties involved in the raising of funds for the expansion of business activities.
Most importantly, it limits their liability to the amount they have invested in its shares. A Pte Ltd in Singapore is considered as a local company and qualifies for the tax incentives, rebates and exemption schemes offered by the tax authorities. It has a separate legal identity from its shareholders. It can buy and sell real estate for its own use. It can sue and be sued in its own name. It is responsible for the liabilities and debts arising out of its business activities.
Incorporating a private limited company in Singapore is considered a complicated task when compared to the registration of other business structures. But, do not let it worry you. ACRA (Accounting and Corporate Regulatory Authority), the Company Registrar of Singapore, has taken care to keep the process simple and straightforward enough. It has only two procedures in it; a) Company name approval and registration and b) Applying for Singapore company registration. Moreover, there are incorporation services providers to assist you in the task.
Key Requirements of Company Registration Singapore
Minimum initial paid-up capital of SGD1
At least one shareholder (maximum of 50)
At least one company secretary
At least one resident director
At least one auditor
Local registered office address (P.O. Box address is not valid)
The entrepreneurs can also opt for Singapore company registration in the form of Exempt Private Company (EPC) in Singapore. It is a sub-type of private limited company. It needs a minimum of 1 shareholder, and they cannot be more than 20. Corporate are not allowed to hold shareholding in an exempt private company.
Small Company in Singapore
The Singapore Companies Act amendment enacted on 1 July 2015 introduced the concept of ‘Small Company.’ According to it, a private company fulfilling two of the following criterion qualifies as the small company:
Total Revenue not more than S$10 million
Total Assets of not more than S$10 million, or
Number of employees not more than 50
The private companies confirming with the above requirement are tagged as the “Small Company” and are exempted from audit compliance. They do not have to appoint an auditor. The exemption drastically reduces their regulatory cost. On the other hand, private companies failing to stick with the criterion need to hire an auditor. They also need to get their accounts audited by a professional firm.
It is beneficial for the entrepreneur to incorporate a Singapore private limited company. One of the main reason behind the decision is the lower tax rates applied by the Singaporean authorities. The Singapore corporate tax ranges in 8.5% – 17%. Moreover, the local registered Singapore companies also qualify for the tax exemptions awarded to the start-ups. For the first three years, their taxable net income is up to SGD100,000 is tax-free. Next, SGD200,000 is taxed at 8.5%. In addition, various tax incentives schemes and grants are available to these companies.