Just like Singaporeans, foreigners can also set up a company in Singapore. As a foreigner, this gives you the opportunity to venture into new markets and increase revenue. Moreover, Singapore is a desirable destination for foreign companies because of its favorable business policies and stable political and economic environment.
As you may have noticed, Southeast Asia is attracting the attention of the world’s major brands as a fast-growing region. Singapore is strategically established as the logistics, financial, and trading hub of the region. This is why many entrepreneurs want to start a business in Singapore.
If you’re planning to incorporate your business in this city-state, learn everything you need to know here.
Ways in Which Foreigners Can Register a Company in Singapore
Foreigners can register companies in Singapore through three different ways, including;
- Relocate to Singapore and apply with EntrePass
- Shift to Singapore and apply for the incorporation of your company with an Employment Pass
- Designate a resident nominee director and run the Singapore Company remotely from a different location
Minimum Requirements to Incorporate a Company in Singapore
Entrepreneurs can choose between five business entities as provided by the Singapore government. These business entities include;
- Sole proprietorship
- Limited partnership
- Limited liability partnership
- Private limited company
A private limited company is a common preference to many foreigners because it is flexible and is categorized as a separate legal entity. Depending on which business entity an entrepreneur opts for, here are the minimum requirements to incorporate a company in Singapore;
- The company must have one resident director (either a Singapore citizen or a permanent resident) holding an employment pass or a dependant pass
- The company should have at least one shareholder. Shareholders can comprise either local and non-resident individuals or companies. Upon successful incorporation, shares can be freely issued or transferred.
- You need to provide a physical registered office address in Singapore. The registered address can either be a residential or commercial but not a P.O Box
- Possess an initial paid-up capital or share capital of at least 1 Singaporean dollar to register your Singapore Company. The share capital can be increased upon company incorporation
- Appoint one company secretary (a resident of Singapore) within six months of your company registration. Shareholders and sole directors can’t act as company secretary
- Provide company name registered with ACRA
- Submit Article of Association and Memorandum of Association
- Brief description of business activities
How To Appoint a Resident Director?
Foreigners cannot self-register companies in Singapore; therefore, they must engage a registered filing agent to act as their local director. Locals/ residents over 18 years old can serve as resident directors while registering the company on the BizFile+ portal. The resident must have the total legal capacity with no undischarged bankruptcy.
- When appointing a local director, you can consider the following elements;
- Ensure to employ a permanent resident with an EntrePass or nominate a local Singaporean
- Shift to Singapore and apply for EntrePass, then register your company
- Appoint a nominee director for the new limited company, especially if you aren’t shifting to Singapore
Registering Your Company In Singapore as a Foreigner
Singapore-registered companies are subject to attractive tax exemptions and incentives. Singapore companies don’t need to pay capital gains/ dividend taxes. Here are crucial aspects to keep in mind for the new company setup Singapore;
- Your company name must be approved before registration
- The registration process is done online, thus, eliminating the hassle of traveling back and forth
- Consider applying for an employment pass or the entrepreneur pass (EntrePass)
- Appoint a nominee director if you don’t plan to relocate to Singapore
- Apply for a work visa because foreigners must work in Singapore
- Employ an incorporation service agency to register your company
Possible Work Passes Foreigners Can Use to Work in Singapore
Typically, foreigners can use four different work passes to work in Singapore. They include;
Employment Pass and Personalized Employment Pass
Skilled professionals, managers, and executives mainly prioritize issuing Singapore employment passes. However, foreign entrepreneurs seeking to incorporate a company in Singapore can apply for an Employment pass to shift to Singapore and manage their operations.
Businesses can apply for multiple employment passes, but the candidates must earn at least 4500 Singaporean dollars. Foreign entrepreneurs in their 40s should earn around double the minimum qualifying salary for the youngest applicants.
Foreign financial service applicants must have a minimum qualifying salary of $5000 to get the employment pass. Individuals applying for the personalized employment pass must have a minimum wage of at least $144000 annually. Personalized employment pass (PEP) allows you to enjoy the freedom to switch jobs or pursue new opportunities.
Singapore issues Entrepreneur Pass (EntrePass) to entrepreneurs who wish to incorporate new private limited companies within the region. To attain this particular pass, you must meet at least one of the following criteria;
- You have accumulated funding from a government-accredited VC or an angel investor
- You have an intellectual property
- You have a proven technical acuity or domain expertise in your niche
- You have a reliable entrepreneurial track record and hold significant business experience
- You have a proven track record of success in investing in businesses, and you aim to grow your new business in Singapore
S-pass is mainly issued to mid-level foreign workers with a minimum salary of $2500. Application of the S-pass is evaluated based on work experience, salary, job type, education level, and relevant skills. Various companies can have different numbers of s pass holders depending on the industry’s Dependency Ratio Ceiling (DRC).
Foreigners earning less than $2500 can apply for a work permit. The permit has a maximum duration of 2 years and is subject to applicants’ passport validity and banker’s guarantee. Applicants can check eligibility for the work permit from the approved source countries.
What is the Cost of Incorporating a Company in Singapore?
The company registration fee is 300 Singaporean dollars, and the Accounting & Corporate Regulatory Authority (ACRA) fee for the company name application is 15 Singaporean dollars. You will receive a confirmation email from ACRA upon successful registration and incorporation.
Foreigners are not eligible to self-register their companies. Hence, you must hire a registered filing agent to undertake the registration. The cost of the registration would vary from one agent to another.
Singapore bestows vast opportunities to run businesses. Foreign entrepreneurs can register and incorporate a company in Singapore without physically traveling to Singapore. All you need is to engage a professional firm to register your company.
You can hire a local resident director while operating your company from overseas. Alternatively, you can obtain an Employment Pass or EntrePass to act as the resident director.