Singapore is one of the largest business centres in the world. It is also one of the most business-friendly, so for start-up companies wishing to enter the Southeast Asian market, Singapore is an excellent place to begin trading. So what do you need to know about registering a business in Singapore and are there any pitfalls to be aware of?
Anyone engaged in business activities for commercial gain in Singapore must register their business. This includes sole proprietors, private limited companies, and limited liability partnerships. Even if you are working from home, perhaps via the internet, you still need to register your business.
Timeline of Company Registration
It doesn’t take very long to register a business in Singapore – typically about two days – and the process is very efficient. However, first you will need to have your company name approved, so make sure it isn’t too similar to existing local company names or an infringement of trademarks.
Any sole proprietorship registered in Singapore must have at least one manager working for the company who is a native Singaporean. The business must also have a Singapore address. Because of this, a non-native Singaporean can’t register as a sole proprietor in Singapore. Instead they must register as a limited company or limited liability partnership. If you do register as a sole proprietor, you will need to renew your registration every year and any profits your business makes will be taxed as personal income.
Anyone can register a private limited company in Singapore. If you are considering starting a new business, at least one of the company directors must be a Singapore citizen or permanent resident.
There are a number of tax advantages to registering a private limited company in Singapore. The Singapore government offers registered companies many tax advantages. Currently, Singapore tax is only 9% for the first S$300k of annual profits. Thereafter it is a flat rate of 17%. In the UK, corporation tax is 20% for profits below the £300k threshold and 26% for profits above, although there may be some reliefs available. Indeed the generous tax benefits are one of the reasons why budding entrepreneurs opt to register a company in Singapore.
Registering a Business in Singapore as a Foreign National
To the uninitiated it might seem incredibly complicated to incorporate a company in Singapore when you are not a Singaporean native. But this is a long way from the truth and in fact the process is actually pretty simple.
Foreign nationals can operate a company in Singapore and run it from an overseas location – you don’t need to be living in Singapore to do business there. However, foreigners are not allowed to register a company. By law, a foreign national, whether they intend on registering a sole proprietorship, private limited company or limited liability partnership, must use a professional firm such as Servcorp to undertake the company registration on their behalf as individuals can’t do it.
Private limited companies will also need to engage the services of a local resident director. This person may be provided by the company you hire to incorporate your business.