Are you a new business owner thinking about setting up your Singapore private limited company in 2023? Starting a company is a challenging task and the company incorporation process can be daunting.
There are many things to do before the company is up and running such as registering the company, getting a license to operate as well as setting up the company operations.
Read on for a well-detailed guide, updated with all the latest information to help you set up a Singapore private limited company in 2023.
What Is A Singapore Private Limited Company?
A limited company is any company that has a separate legal identity from its owners, directors, and managers. A private limited company is a type of limited company whose stocks are not open to the public and usually has a maximum of 50 shareholders.
Private limited companies in Singapore are considered tax residents and can qualify for tax benefits and exemptions.
Singapore Private Limited Company: Main Features
Singapore private limited companies are characterized by the following:
- It has a legal identity separate from that of its owners, shareholders, directors, or managers; hence, it can sue or be sued by other entities in its name.
- The shareholders or owners are not held responsible for the company’s debts.
- The liabilities of company directors and shareholders to the company are limited; this means that the personal properties and assets of the shareholders or members of the company are protected from the company’s creditors and they do not have any legal obligations, provided the shares are being paid.
- The company has the right to ownership of properties and assets.
- The company can only have a maximum of 50 shareholders and a minimum of 1.
Advantages Of A Singapore Private Limited Company
It’s a fact that setting up a private limited company has its perks, such as opening the business up to opportunities like financial grants and loans in its name, and incentives like tax exemptions. Other benefits of setting up a Singapore private limited company include:
- Shareholders and members are not held personally liable for the debts or losses of the company.
- The company is charged corporate tax rates, and bonuses in the custody of the shareholders are non-taxable.
- The demise of one or more of the company’s shareholders will not affect the existence of the company since it is a separate entity from the shareholders.
- The finances and personal assets of the company’s shareholders are protected since they have no personal responsibilities for the debts or losses of the company.
- The company’s business operations will not be affected by the change of shareholders or the pattern of holding.
- Newly incorporated private limited companies qualify for tax benefits and exemptions.
- The company communicates a professional image and will be able to make the most of financial benefits or bank loans.
- It allows the business a reliable reputation in the business world.
- Expansion is possible because there can be a transference of ownership and appointment of new shareholders.
Who Can Set Up A Singapore Private Limited Company?
A Singapore private limited company can be set up by anyone aged 18 and above, whether the individual is a citizen or a local of Singapore.
Requirements To Set Up A Singapore Private Limited Company
The following requirements must be fulfilled to set up a Singapore private limited company:
- A minimum of one shareholder; either a corporate or individual shareholder
- An office address in Singapore
- A minimum of $1 in initial paid-up share capital
- A company secretary
- A resident director
Required Documents For Setting Up A Singapore Private Limited Company
The following are the basic required documents for setting up a Singapore private limited company:
A well-thought-out company name that is not similar or the same as an already existing company is required. The ACRA will not register similar names that are already in use. However, ensure that your company name is unique and memorable.
An initial paid-up share capital of at least $1 is required to set up a private limited company. As the business grows, additional shares can be issued to increase the funding.
Particulars of shareholders
The particulars of at least one shareholder must be presented. Both foreigners and locals can be allowed 100% ownership for a start. More shareholders can be appointed as the company expands.
Particulars of directors
To set up a Singapore private limited company, you need at least one company director. The company director must be a citizen, or resident of Singapore, or have an Entrepass and a Singapore address. The shareholder can also double as the company director if the above requirements are met.
Particulars of company secretary
One company secretary is required to set up a Singapore private limited company. The company secretary must be appointed within six months of incorporating the company.
Registered company address
The private limited company must have a registered address in Singapore. Documents of this address must be available while setting up your Singapore private limited company.
A detailed document showing the obligations as well as the entitlement of each shareholder that has been duly signed by the shareholders should be presented.
The company constitution is a document that states the company’s intended activities and also highlights the internal management and operation of the company. Companies that were formed before the implementation of Companies (Amendment) Act 2014, effective 3 January 2016, might have a Memorandum & Articles of Association (M&AA) instead.
How To Set Up A Singapore Private Limited Company
The process of setting up a Singapore private limited company can be divided into three stages, which include:
The pre-registration phase
The pre-registration phase involves the steps taken before the actual company registration such as getting the required documents ready, ensuring that the requirements are met, and picking a company name. You can use the following tips when choosing a name for your company:
- Ensure the name is not identical to that of an already existing company.
- Ensure the name doesn’t contain any vulgar or offensive language.
- Run the name through Bizfile+ to see if it is still available before selecting it.
Registering the company name and activities
After choosing a name for your company, log into Bizfile+ using your SingPass to register the name. After the registration, the chosen name will be reserved for 120 days pending the company’s incorporation. If the company fails to be incorporated within that time, the name is made available to the public.
The company name should be registered alongside the activities that the company intends to carry out.
Register the company with ACRA
The Accounting and Corporate Regulatory Authority is responsible for registering companies in Singapore. Once all the required information is filled in the bizfile+ portal, the form can be submitted for incorporation. If everything goes well, you can make the required payment and your company will be registered within 15 minutes.
Post-Incorporation Process of Setting Up a Singapore Private Limited Company
After the successful registration of your private limited company with ACRA, you should ensure to complete the following steps for the post-incorporation process:
Open a company bank account
Since the company is a separate entity from its owners or shareholders, it is expected to have a bank account in its name. Many banks usually require the physical presence of all the signatories and directors for opening a Singapore corporate account. However, in the event that you can’t be present, you may have the option to meet with the banker via a video call and submit notarised copies of documents as required.
Licenses and permits
Get the required licenses and permits to operate as well as carry out the operations your company intends to perform, especially if your activities are subject to approval by the authorities of the state.
Getting an office space
For a company to be incorporated in Singapore, it must have a registered Singapore address. After registration, you may set up your office space at the registered address. Your registered office must be accessible to the public for at least three hours a day.
Goods and services tax registration
This is a mandatory requirement for every Singapore company with more than $1 million in annual taxable revenue.
Recruit necessary staff
Once your company is incorporated, you can recruit the necessary staff to get your company up and running. Personnel like an accounting and auditing team, company secretary, and others should be employed.
Ensure that the registration number issued by ACRA during registration reflects on all official documents such as letterheads, quotations, and invoices, among others.
How We Can Help – Our Company Incorporation Services
If you’re new to the corporate scene and you’re having a hard time navigating the registration process, we’re here to help you. At SJH Advisory, we offer Singapore company incorporation services.
We can handle all aspects of the legal registration including preparing your documents and even contact with ACRA. If you’re located outside Singapore, our services are best for you as you don’t have to worry about traveling to Singapore to get your company registered.
We also offer advisory and consultation services, so you can also reach out to us if you have any questions about business incorporation in Singapore.
Singapore Private Limited Company - Frequently Asked Questions
Company incorporation simply refers to the process of registering your business or company with the right authorities in a country or state. It is an important process because it gives your company legal rights to operate and make a profit in said country.
It also qualifies your business for available benefits of running a business such as tax exemptions and property security.
No, you do not have to be. Your company can be incorporated with or without your presence in Singapore. Additionally, you can choose to hire a third party like professional business incorporation services to handle your business incorporation process in your absence.
There is no specific timeline for incorporating a company because there are several factors involved such as planning and getting all required resources.
However, once the above factors have been put in place, the actual registration can be completed in under one week. Once you meet the requirements and have all documents on hand, you can submit them and the process can be completed within three days.
Yes. Singapore permits 100% company ownership by foreigners as long as the individual is above 18 years.
However, it is best to have your company incorporation handled by professional company incorporation services to save you the stress if you’re a foreigner based outside Singapore.
Yes, private limited companies can have both corporate and individual shareholders. A company can have all fifty shareholders as individuals.
However, if the majority of the shareholders are corporate entities, the company must have at least one individual shareholder with at least 10% ownership.
A Singapore private limited company is legally allowed to have a maximum of fifty shareholders and its stocks are not open to public trade. On the other hand, a public limited company can legally have more than fifty shareholders and its stocks are open to the public for trading.
Yes, Singapore is a great place to start a business or set up a company. It has a flourishing economy that is focused on helping companies and businesses thrive.
Fundings and grants are available to businesses in need of financial help as well as tax exemptions to reduce the financial burdens on businesses.
A Singapore private limited company is considered a separate entity from the owners, which gives them better standing in the business world.
Also with a private limited company, your assets and personal finances are protected in the event of losses or debts, and it is easy to get funding for your business as a Singapore private limited company.