Incorporating in Singapore: The Versatile Appeal of Private Limited Companies

Co Authored by: Ho Hui Ling & Lim Sim Ving

Singapore has long been recognized as a global business hub, attracting entrepreneurs and corporations alike with its pro-business policies, strategic location, and economic stability. One of the most popular structures for company incorporation in Singapore is the Private Limited Company (Pte Ltd). Renowned for its flexibility, credibility, and limited liability protection, this structure empowers businesses of all sizes to thrive in a competitive landscape while enjoying numerous tax benefits and operational advantages.

Understanding a Private Company:

 

Exempt Private Company

• An exempt private company is limited by shares and is a separate legal entity from its shareholders.
• Shareholders are not personally liable for the company’s debts beyond their share capital.
• Can have up to 20 shareholders.
• No shareholder is a corporation.

 

Private Company Limited by Shares

• A private company limited by shares is limited by shares and is a separate legal entity from its shareholders.
• Shareholders are not personally liable for the company’s debts beyond their share capital.
• Can have up to 50 shareholders.
• A corporation can be a shareholder.

 

Key Steps to Incorporate a Private Company in Singapore:

For company incorporation, these key steps ensure a smooth and hassle-free process.

1. Reservation of Company Name:

• • The first step is to choose a company name and submit a name application to the Accounting and Corporate Regulatory Authority of Singapore (“ACRA”). Your proposed company name cannot be identical to an existing name or contain prohibited and undesirable words.
  • When you submit a name application, you will need to specify your business activities (up to 2) by selecting the most relevant Singapore Standard Industrial Classification (SSIC) code.

 

Registration Requirements and Timeframe

1. 1. An application must be made to the ACRA for the approval and reservation of the proposed name of the company electronically.
   2. Approval or rejection (due to undesirability, similarity, or prohibition) is typically provided within the same day. Some name applications may be referred to Referral Authorities for approval. The processing time for referred applications may take between 14 to 60 days and appeals may add another 5 working days.
   3. After the name application is approved, the ACRA will reserve the name for 120 days. If you do not proceed to incorporate the company within this period, the reservation will expire and the name will be released for anyone to register.
   4. Once the ACRA has approved the proposed name, the entity can be incorporated within a day upon submission of the incorporation documentation and completion of the registered filing agent due diligence process.

 

2. Appointment of Company Officers:

• • A private company in Singapore must have at least one director who is a Singapore resident (Singapore citizen or Singapore permanent resident). An expatriate who has a valid employment pass could be appointed as a resident director, subject to obtaining consent from the Ministry of Manpower. A company director must be at least 18 years old.
  • A company secretary has to be appointed within 6 months from the date of incorporation. The company secretary must be a natural person who is ordinarily resident in Singapore. The company secretary cannot be the sole director of the company.

  

3. Share Capital and Shareholders:

• • You may decide on the amount of share capital for your company. It is common for companies to have an initial paid-up capital of S$1.
  • The company must have a minimum of one shareholder who may be local or foreign, either an individual or a corporation. The details of the shareholders and their respective shareholdings must be provided during the incorporation process.

 

4. Decide on a Financial Year End (“FYE”):

• • The FYE is important as it determines your company’s basis period for taxation. Income earned in a financial year is taxed in the following year.
  • Additionally, the FYE determines the deadlines for your company’s annual filing requirements. For instance, a private limited company in Singapore must hold its annual general meeting within 6 months after FYE and file an annual return to the ACRA within 7 months after the financial year end.
  • Many Singapore companies opt for a FYE of 31st December. However, shareholders of a company have the flexibility to choose any date as its FYE.
  • If your company decides to change its FYE, you must inform the ACRA.

 

5. Registered Office Address:

• • The registered office must be an address in Singapore, but it need not be the place of business operations.
  • All companies must ensure that their registered office is open and accessible to the public for at least three hours during ordinary business hours on each business day. A business day is any day excluding Saturday, Sunday and public holidays.
  • The purpose of this requirement is to allow members of the public to reach out to the office if necessary and to facilitate the delivery of any legal documents.

 

6. Constitution:

• • The constitution is a legal document which spells out the rules and regulations on how the company should be governed.
  • You must submit a copy of your company’s constitution when you incorporate your company. A copy of the constitution signed by the shareholder(s) (also referred to as ‘subscriber(s)’) at point of incorporation must be kept at the company’s registered office address.
  • If you do not have a customised constitution, you may choose to adopt the Model Constitution provided in the Companies (Model Constitutions) Regulations 2015.

 

7. Engaging a Registered Filing Agent:

Foreigners registering a private limited company in Singapore must engage a registered filing agent (such as a corporate services firm) to submit the Company’s name application and incorporation documents to the ACRA.

Read more: Engaging Experienced Corporate Secretarial Agents In Singapore

 

Post-Incorporation Compliance Requirements for Private Company:

After incorporation of a company, the Directors have to ensure compliance with ongoing requirements:

• • Appointment of Auditor: Companies are required to appoint an auditor within three months from the date of incorporation unless the conditions for audit exemption are met.
  • Annual Filing: Must hold an annual general meeting with 6 months after your company’s financial year end and file an annual return within 7 months after your company’s financial year end.
  • Notification of Changes: Informing the ACRA of any changes to the company’s details, such as changes of directors, shareholders, registered address, and other relevant information, within prescribed timeframes to ensure compliance with the regulations.
  • Maintain Statutory Records: Keep records of shareholders, directors, and other key personnel.
  • Tax Filing: The Inland Revenue Authority of Singapore (“IRAS”) will notify the Directors of the company on the corporate tax filing requirements once the company is registered with the ACRA. The company should assess if it is required to register for Goods and Services Tax with the IRAS.
  • Licenses and Permits: Depending on the nature of your business activities, you may need to obtain specific licenses or permits from the relevant authorities.
  • Hire Foreign Employees: If you plan to hire foreign employees, you have to apply for the necessary work passes such as Employment Pass or S Pass through the Ministry of Manpower.

Singapore business incorporation offers a strategic advantage for entrepreneurs seeking growth and stability. Ledgen Group, a trusted corporate services provider in Singapore, can assist you with expert guidance and seamless incorporation solutions to set your business on the path to success.

About Ledgen

Ledgen Group is a premier professional firm with 20 years of experience providing accounting, tax, corporate secretarial and payroll services to businesses. It is headquartered in Singapore and has direct presence in Malaysia and Hong Kong. Ledgen Group also operates in other parts of Asia, Europe and America through our affiliates network and partners globally. For queries on our services, please contact us @ enquiry@ledgengroup.com.

 

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