A company is a legal entity that is separate and distinct from its shareholders and directors. In Singapore, there are two main types of companies – public and private. Listed companies are listed on the Singapore Exchange (SGX) and usually have more than 50 members. Private companies are not listed on the SGX, with a maximum of 50.
The owners of these companies are called shareholders. The shareholders then appoint directors to manage the company. According to the Singapore Companies Act, anyone over the age of 18 (foreign or local) can register with a Singapore company.
Unlike sole proprietors and partnerships, company owners have limited liability. A company is a separate and unique legal entity from its owner. Therefore, the company owner is not personally liable for the company's debt or any legal action taken against the company.
However, companies have more compliance requirements than sole proprietors and partnerships. These include filing an annual return and holding an annual general meeting, and failure to do so will result in disciplinary action by the Accounting and Corporate Regulatory Authority (ACRA). It also involves more work to end the company – the company may take up to 5 months to remove from the register.
For companies that want to grow, the company will be the most appropriate business structure. Contrary to other business structures, registering a company as a company can also bring other important benefits, such as relatively easy fundraising and ownership transferability. You can refer to our article on various business structures in Singapore for more information.
Pre-registration: matters needing attention
At least one person who is ordinarily resident in Singapore (Singapore citizen, Singapore permanent resident, or a person who has obtained an EntrePass, Employment Pass or Dependent Pass) must be appointed as a company director.
There is no limit to the number of local or foreign directors a company can specify in Singapore. A director must be at least 18 years of age and must not have gone bankrupt or been convicted of any wrongdoing in the past.
Directors also do not have to be shareholders. Therefore, non-shareholders can be appointed as directors.
Singapore Pte Ltd can have at least one, up to 50 shareholders. A shareholder can be a natural or legal entity, such as another company or trust.
Singapore companies can own 100% local or foreign ownership. After the company completes the registration process, it may issue new shares or transfer existing shares to others.
Under the Singapore Companies Act, each company must appoint a qualified company secretary within six months of its incorporation. The company secretary must be a natural person who usually lives in Singapore.
It is important to note that the same person cannot be the company secretary if there is only one director/shareholder. The company secretary's office cannot be vacant for more than six months at any time.
The minimum paid-up capital of a Singapore company registration is S$1. The paid-in capital (or equity) can be increased at any time after the establishment of the company.
To register a Singapore company, you must provide your local Singapore address as the company's registered address. The registered address must be the actual address (which can be a commercial or residential address) or a P.O. box.
According to the Home Development Department's Home Office plan, individuals can also use their address as a business address. This program applies to HDB and private property.
If you wish to use your home address as your company address, we recommend that you consult the appropriate permissions. Eligible owners/occupiers must obtain prior approval from the HDB, and owners of private residential properties must obtain prior approval from the URA.
For Singapore companies, Singapore's registered office must be operational and open to the public during normal office hours.
Singapore's corporate tax rate is 17%. Singapore registered companies enjoy very attractive tax exemptions and rewards. For example, a new startup will be exempt from the first S$300,000 tax payable of S$200,000.
It is worth noting that Singapore companies do not have capital gains or dividend taxes. For more information, please see our Corporate Tax Guide in Singapore.
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