They say it is easy to do business in Singapore. However, “they” did not tell you about the complexity and tortuousness involved in setting up a business in Singapore. The first obstacle you will encounter when setting up a company in Singapore is to choose the right business structure.
To a large extent, outsourcing the Singapore company registration process to external companies is a widely accepted option. However, it is important to understand the different business structures in Singapore before you hire any company that provides Singapore company registration services.
Integrating business into various business structures in Singapore
Usually, foreigners do not need any type of government approval to open new business in Singapore. Singapore allows about 100% foreign ownership, making it the best and preferred location for foreign entrepreneurs to do business.
To merge a bank or financial institution, you must obtain approval from the Monetary Authority of Singapore. Let us look at the different options for entrepreneurs to merge companies in Singapore.
Representative office: A foreign company that is willing to conduct business in Singapore but does not intend to carry out any business activities here should use its company as a representative office. The Singapore corporate environment treats the representative office as an administrative arrangement, primarily designed for non-commercial activities. Therefore, the registered office does not have any independent legal status with its parent company. Please note that Singapore does not allow registered offices to conduct any business activities with the incentive to generate revenue and earn profits.
Branches: Foreign companies that do not want to establish independent companies in different names in Singapore should be more willing to join the branch. After the establishment of a branch, you can conduct business activities under or under the corporate brand name of the foreign company. A branch incorporated in Singapore is legally considered an extension of its parent company. Please note that the branch will never be considered a subsidiary owned by the foreign parent company. The Singapore Companies Act does not provide for any special or separate company charter memorandum (MAA) for branches. Branches are free to run their shareholder structure and business activities as directed by the foreign company's original MAA.
Subsidiaries: Private limited companies with foreign companies as their main shareholders should include their business in their subsidiaries. The subsidiary is a resident company of Singapore and is governed by Singapore law. A subsidiary has a legal status in Singapore and is therefore considered a company different from a foreign company. In this option, the liability of a foreign company is limited to the equity it has invested in. In addition, foreign companies have terminated their debts and debt obligations. Please note that subsidiaries are usually registered as limited liability companies in Singapore.
Registered company: Singapore offers two main options for registered companies; private limited companies and listed companies. A private limited company can have up to 50 shareholders and can also limit equity transfers. In contrast, a public limited company does not have such restrictions and can have as many shareholders as they want. In addition, public limited companies can raise funds by providing stocks and bonds to the public. A registered company can be registered with a minimum capital of S $1, with at least one shareholder, one director and one company secretary. If the selected shareholder is an individual or a company, then that's fine. No shareholder needs to be a permanent resident of Singapore. Please note that the shareholder's liability is limited to the unpaid amount of the issued shares (if any). In addition, S $ 1 is the fixed face value of each share of stock, and no par value and bearer stock are allowed.
Limited Liability Partnership: When two or more partners want to register a company in Singapore, registering the company as a limited liability partnership (LLP) is the best option. Under the partnership entity, ACRA identifies two partners as different individuals who can be sued or prosecuted. In addition, partners are allowed to own property in their own name.
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