Just as a building needs a good foundation to stand on, your business needs to have its foundations properly prepared from the very beginning.
Identifying the best business structure for you may not be as obvious as it may first appear. There are several factors to consider, such as the pros and cons of going it alone or how you intend to source funding. Ultimately, the way you will be running your business will be determined by the business structure you choose.
Should you choose to take the road of business incorporation in Singapore, you must be aware of the many steps that must be taken before your business becomes a full-fledged company. Each step must be done in order and thoroughly completed to ensure a smooth process and to avoid future complications.
It takes a significant amount of time and research to become familiar with all the processes involved and the necessary documents, and it can be easy to simply “breeze through” or even overlook certain steps.
This is where the assistance of experts in business incorporation becomes invaluable. On top of helping you decide on the business structure that best suits your needs, such experts are also able to guide you through the establishment of your business as the entity of your choice.
They will be able to direct you in terms of what to do first, where to go and when, as well as advise you should any difficulties arise. They may even do much, if not all of the legwork for you, allowing you to focus on the myriad other aspects of getting your business up and running.
Doing business in Singapore in 2018 doesn’t have to be difficult. Not when you have U Ventures by your side every step of the way.
Setting Up Your Business in Singapore
Regardless of the business structure you choose, there are several things you need to be aware of:
- You need to register your business with the Accounting and Corporate Regulatory Authority (ACRA).
- There are rules for choosing a name for your business.
- Depending on the nature of your business, registration can take as long as two weeks to two months.
- Companies are required to have at least one director who is a Singapore Citizen, a Permanent Resident, or holds a Singapore work visa.
- You can incorporate a company in Singapore even if you are not a resident, but only with the help of a professional firm.
- The documents necessary for registration differ according to whether or not you are a Singapore resident, or whether you are a corporate entity shareholder.
- There are reporting requirements to be met and annual filings to be made even after registration.
- After registration, you will also need to open a bank account in a major Singapore bank.
- If your company’s projected annual revenue exceeds $1 million, you will have to register for the Goods and Services Tax (GST).
- Singaporean business laws you need to be familiar with include accounting standards, employment laws, the Competition Act and the Personal Data Protection Act.
Why should you choose U Ventures to help you with business incorporation in Singapore?
- We have more than 10 years of experience in management, entrepreneurship and Singapore incorporation services.
- We are experts in Singapore company formation and legal issues, as well as meticulous when it comes to compliance.
- We are passionate about helping startups and SMEs in Singapore with their company set up and continuing business development.
- We have had the privilege of serving clients of various sizes and across various industries.
- We have been recognised for the quality of our service with major awards.
Not sure which structure is best for your business? U Ventures will advise and guide you.
1. Sole Proprietorship
If you prefer to run your business by yourself, a sole proprietorship may be the option for you. In this business structure, you would be the sole owner and decision-maker bearing all responsibility for the business’ assets and liabilities.
A sole proprietorship may be registered by anyone who is at least 18 years old with Singapore citizenship, residency or an Employment Pass. If you are a foreign national or an overseas company, you may register this type of business entity as long as you have a manager who is a Singapore resident.
But while this is a relatively low-cost set up, being sole proprietor of your business also comes with higher risk. You will have unlimited liability, which means your personal assets will not be protected in the event of some misfortune such as a lawsuit. In such a case, your personal assets will be used to meet your business’ obligations or pay for any debts your business has incurred.
If there are two to 20 of you who would like to go into business together, a partnership may seem to be the obvious choice. Like a sole proprietor, each partner or “general partner” would have unlimited liability and can be sued in the business’ name. In addition, you would also be personally liable for any of your partners’ losses, or the debts of your partnership as a whole.
The registration requirements are identical to those for sole proprietorships, with the addition that any self-employed individuals who wish to become partners need to have topped-up Medisave accounts before registration.
Should you choose to form a partnership, take note that there are two other partnership types that you might also want to consider, each with their own advantages and limitations.
In a limited partnership or LP, there is at least one general partner and one “limited partner”, the latter having limited liability. As opposed to the general partner with his unlimited liability, the limited partner can only be liable for the business’ debts and obligations up to the amount he contributed to the business.
If you want to be a limited partner in an LP, you will have to register under the Limited Partnership Act—otherwise, you will be considered a general partner with unlimited liability. As a limited partner, you may not play a management role in the business, as managers are legally considered general partners.
Limited Liability Partnership
A limited liability partnership or LLP, is a partnership where all of the partners are limited partners. None of the partners in an LLP can be made liable for the business’ debts or obligations. An LLP is actually a corporate entity with its own legal personality, and as such, is technically not a partnership per se. Corporations as well as individuals may become partners in an LLP.
The LLP will need to have a manager who is of age, a Singapore resident, and is not necessarily one of the partners. This manager will be responsible for the LLP’s compliance with the Limited Liability Partnership Act. The LLP will also need to have an office that is registered in Singapore.
Much like an LLP, a company is a business structure that is an entity that is completely distinct from its own members. None of those members can be made liable for any of the company’s debts or obligations.
Though a group of more than 20 partners is required to register as a company under the Companies Act, a company itself only needs to have at least two members. It needs to have at least one shareholder and one director who is a Singapore resident.
If a foreigner wants to become a director, he will need to get a Singapore Entrepreneur Pass (EntrePass) from the Ministry of Manpower (MOM). A company must likewise have a company secretary and an auditor as required.
Now while a company is a relatively low-risk set up, its set up and maintenance costs are much higher compared to a sole proprietorship or partnership. It also involves several more procedures and requirements for compliance.
A company usually has “Pte Ltd” (“Private Limited”) or just “Ltd” after its name, which brings us to the three company types that you might want to consider.
Exempt Private Company
This type of company has 20 members or less with none of them being a corporation having beneficial interest in the company’s shares.
This company type has 50 members or less. Considering the Private Limited Company in Singapore advantages offered by this type as compared to sole proprietorships or partnerships, most businesses choose to register as Pte Ltd’s. The advantages of a limited private company include relative ease and flexibility, being allowed to own property, and to sue using the company’s name.
This type of company can have more than 50 members, and may, but not necessarily be listed on a stock exchange. As a “listed company”, it can raise capital by offering shares to the public.
A Public Company Limited by Guarantee, on the other hand, is typically a non-profit company such as a charitable or arts-related organisation.
Singapore is one of the easiest countries in the world to do business, with great government support and access to capital. If you are looking to start up or expand your business in Singapore, let us help you navigate the local rules and legislation.
1. Foreign Individuals
We help you handle all incorporation matters while you focus on the revenue-generating aspects of the business. That way you can hit the ground running when you are ready to do business or raise funds in Singapore.
All aspects of doing business will be ready when you are. This includes all the necessary VISA/work permit-related matters for all key personnel of the business.
2. Foreign Companies
Our local expertise will help you handle and decide whether you should establish a subsidiary company, branch office or a representative office. We will handle the employment matters such as VISA/work permits for all of your company’s personnel . This includes the employment pass, nominee directors, nominee shareholders, etc.
Subsidiary Company + Employment Pass
Subsidiary Company + Nominee Director
Branch Office + Employment Pass
Branch Office + Nominee Agents
Singapore Representative Office Setup
Allow us to assist you in completing your requirements for incorporation:
- Company Name
- Brief Description of Business Activities
- Registered Address
- Memorandum and Articles of Association
- Shareholding Pattern
- Shareholders Agreement
- Shareholder Particulars
- Director Particulars
- Company Secretary Particulars
- Singapore Residents
- Copy of Singapore identity card
- Non-Singapore Residents
- Copy of passport
- Proof of overseas home address
- Know-Your-Client documentation (e.g. personal/business profile, bank reference letter)
- Copy of registration documents (e.g. Constitution, Memorandum and Articles of Association)
We answer your Frequently Asked Questions about accounting in Singapore:
How much will it cost me to set up my business according to my chosen business structure?
How do I know which business structure is right for me?
Be aware that some names, such as those containing the words, “bank”, “insurance”, “education” or “university” will need special approval and may take longer to process. You may also be able to use the name of a local business whose reservation or registration has been cancelled or has shut down, within a period of 1 to 6 years.
Click here to use BizFile for checking whether the name you have in mind is already taken. If your name is approved, it will be reserved for four months, after which you may apply to extend your reservation.
Will I be able to change business structures during the course of my operations?
What is the full extent of limited liability in a private limited company in Singapore?
How may I obtain an EntrePass from the Ministry of Manpower?
Will you be able to continue assisting me even after my incorporation is completed?
We are proud to have assisted many businesses, both local and overseas with business advisory as well as accounting and tax matters.
We’re proud to serve these and other distinguished businesses in Singapore:
Golden Mile Tower Singapore 199589
Let’s start together, today.
Contact us at U Ventures to ensure correct business incorporation for your enterprise.