Doing Business In Singapore? Expanding your business to Singapore has numerous financial advantages. Singapore is internationally renowned for its incredibly business-friendly environment, including low taxes, a centralized location with access to huge Asian markets, and the ability to retain 100% ownership of the new branch.
If you want to expand your company to Singapore, you will need to go through the correct formal steps to legalize your company. If you are considering a subsidiary-based entity, registering a foreign company in Singapore can be a complicated, costly, and lengthy process. You’ll need a confident understanding of the details before you begin.
Options on how to expand a company to Singapore
When your company is ready to expand to Singapore, you have two main options: You can set up a subsidiary or work with an organization such as an Employer of Record (EOR). If you work with an EOR, the process is likely to be much faster, easier, and cheaper. However, some companies choose to establish a subsidiary because they are more familiar with this traditional option.
To get started with a conventional subsidiary-based option, your company will need to gather information on topics such as taxes and labor laws. You should also research hiring requirements and understand how your company should handle the essentials of employment, including:
- Contract structure and requirements
- standard wages
- Paid vacations and holidays
- Profits
- Notification requirements
- Termination restrictions
However, before taking on these tasks, you will need to officially incorporate and register your business. These steps are necessary for your company to operate legally in Singapore.
One of the first steps in establishing a company in Singapore is deciding how it will be incorporated. You should generally join as soon as you have decided to do business in Singapore. Here are some of the benefits of early enrollment:
- Name Protection: You will be able to register the name as a formal trademark and protect it from unauthorized use.
- Ability to sign legal agreements: The official constitution allows your company to enter into binding legal transactions.
- Intellectual Property Ownership: Your company must be incorporated before you can claim rights to your intellectual property in Singapore. Formal incorporation makes it easier to resolve disputes over the ownership of intellectual assets.
- Equity Ownership: Early incorporation also allows your company to claim more of the equity before value begins to accumulate. Late incorporation, on the other hand, will decrease the number of equity owners can receive.
- Easier fundraising: Banks and other lenders will find your business much more attractive as a client once you’ve officially incorporated. Investors will also generally only invest in incorporated businesses.
What are the requirements for company formation in Singapore?
Establishing a business subsidiary in Singapore can be a complex and labor-intensive task. Here are some of the steps your company will need to complete.
1. Reserve your business name and physical address
Company registration in Singapore begins with the formalization of your company name and address. Reserving the company name generally has three main components:
- Choosing a name: When selecting the name of your company, you will need to meet a few requirements. The name must be unique, must not be obscene or offensive, and must not be a name expressly prohibited by the Minister of Finance. Once you have met those criteria, you can legally register the name.
- Registering the name: Your company must then register the chosen name through the Accounting and Corporate Regulatory Authority (ACRA), through the electronic filing and information retrieval system. known as BizFile+. After registration, the name will remain reserved for 120 days. If the branch is not registered and incorporated within that time, the registration expires, and the name is available for use by other entities. Some names require additional approval from the relevant authorities. A name indicating an educational facility needs approval from the Ministry of Education, for example.
- Specifying business activities: Your company must declare the exact business activities that will be carried out under the registered name. You must identify the primary and secondary business activities that your branch will conduct, and you must indicate the Singapore Standard Industry Classification (SSIC) that best represents each activity.
When setting up your new business location in Singapore, you will need to select a physical location and prove your legal right to do business at that address. You must provide a physical address, rather than a PO Box, to ACRA with your registration.
2. Formalize your incorporation
As you establish your new company’s presence in Singapore, you need to choose the structure your company will use to incorporate. Singapore has several types of incorporation for international business:
- Sole proprietorship: Your business is likely to avoid the sole proprietorship model unless your business consists of a single owner who does not wish to set up a separate entity. A sole proprietorship is easy to register, manage, and operate, but has limited utility for larger businesses.
- Fellowship: Forming a company in Singapore requires at least two and no more than 20 people who are willing to act as partners and owners of the company. The partnership is not a separate legal entity from the partners, and the partners have unlimited liability, making them personally liable for debts and losses incurred by the business. A partnership requires annual renewals.
- Limited Liability Company: Forming a limited company in Singapore requires at least two partners, with at least one general and one limited partner, and no maximum limit on the number of partners. It is not a separate legal entity, and the general partner has unlimited liability for the debts and losses of the business. The limited partner has limited liability. A limited partnership also requires annual renewals.
- Limited Liability Company (LLP): A limited liability company, or LLP, is a common model for international companies expanding to Singapore. This model requires at least two partners, with no maximum limit, and stands out as a separate legal entity. Therefore, the partners are responsible for the company’s debts and losses incurred only by their own actions, not those of the other partners. The LLP must make an annual declaration of solvency or insolvency.
3. Submit your business record with BizFile+
When you register your company in Singapore, you will first need to log in to the BizFile+ portal. From there, all business partners must indicate their consent to register the company. Then your company can submit the official registration application to become legally incorporated. As of 2021, the registration fee for a new business entity was 100 Singapore Dollars, with an additional SG$15 required for name registration. Each annual renewal will then require an additional SG$30.
Alternatively, some companies choose legal or accounting experts to handle the registration process. A law firm, accounting firm, or corporate secretarial firm can file the paperwork on behalf of the company to save time and ensure compliance.
4. Get a unique entity number (UEN)
If your business is incorporated as a limited liability company, you will receive a randomly assigned unique entity number (UEN). You will need to use that UEN for all transactions with government agencies in Singapore.
Alternatively, your branch can decide to receive a Special Unique Entity Number (SUN). After registering for SUN services and paying the required fees, your business can select a desirable UEN from a shortlist of reserved numbers. These SUNs often contain strings of consecutive digits and other easy-to-remember patterns.
The advantage of obtaining a SUN is that business owners can easily identify and remember their own UEN. However, the high expenses of the SUN program – typically between SG$1,000 and SG$3,000 – make this measure prohibitive for many businesses.
5. Download your business profile
Once you have registered your company branch, you will be eligible to receive your official digital. ACRA job profile. A company’s business profile typically contains information like this:
- Company Name
- Registry number
- Incorporation date
- Main activities
- Amount of paid capital
- Registered office address
- Partner and director details
Your branch will need this business profile to open a corporate bank account. You can also use the profile as supporting documentation for license and approval requests.
6. Open a bank account
Your company must establish a corporate account with an institution that has full banking status in Singapore. This account will allow your company to carry out legal business transactions in the country.
When applying for your corporate bank account, your company will generally need to provide the following documentation:
- Corporate bank account documentation completed and signed
- Proof of address
- Certified copy of the business profile of the company from the ACRA
- Official certificate of incorporation
- Certified copy of the articles of incorporation and the statutes of the company.
- Resolution of the board of directors to allow the opening of the account.
- Certified copies of director’s passports or SingPasses
- For offshore accounts, official certificates of incumbency and good standing
7. Get a CorpPass
CorpPass is a corporate digital identity that allows your company to carry out transactions such as filing taxes, applying for licenses, and generally interacting with the Singapore government when necessary. Using CorpPass also helps your company eliminate paperwork and ensure cybersecurity in its dealings with the government.
To sign up for a CorpPass, your company will need to provide the following information:
- SBU Company
- Business registration documents
- CorpPass Admin ID
Once you have prepared the registration documents, an authorized person can register as a CorpPass administrator on the CorpPass website. From there, that person can create accounts, delegate roles, and sign up for the necessary digital services.
8. Apply for licenses and approvals
Once your business has been formally registered, it may also require approvals and licenses. specific to your industry. For these, you will need to contact the appropriate government agency.
For example, if your business is a food service business, you can obtain a food store license, concession stands license, liquor license, or halal certificate, among many other options. Veterinary or animal services, for example, can obtain a license to exhibit animals, a certificate of freedom from the disease within Singapore, a license for a veterinary center, or a license to possess veterinary biologicals.
9. Sign up to receive contributions to the Central Provident Fund
Your company will need to work with an insurance agency to sign up and contribute to the Central Provident Fund (CPF). You must complete this step before you begin recruiting and hiring, as you will need to contribute to this fund on behalf of your employees each month. You will need to apply online with your UEN and CorpPass information to set up your contribution processes.
Once the authorities have approved your application, you will receive these essential elements:
- CPF Shipping Number (CSN)
- General Interbank Recurring Order Request (GIRO)
- Notice of payment through the CPF91 form
Knowing your CSN is essential because this number allows your company to pay its contributions to the CPF and carry out transactions with the official board of the CPF.
