Company Incorporation Steps and Services in Singapore

As one of the top three digital cities in the world and a leading financial hub in Asia with a strong track record of economic growth, Singapore has always been an attractive destination for investors. The nation’s appeal is further strengthened by its consistently high scores in political stability and government transparency, which assure investors that they are doing business in a safe and predictable environment. Complemented by the country’s mix of investor-friendly policies and highly educated workforce, these factors make Singapore an attractive place for individuals seeking to start a business.

To set up a company in Singapore, incorporation or registration is the first step that most entrepreneurs need to take. Corporate incorporation is specifically registering your business with the state so that it is legally a standalone entity. As simple as this process sounds, the decisions you make can significantly affect your organisation. To help you out, here is a breakdown of the different structures, their pros and cons, and the services you may need to incorporate or register your business rapidly and smoothly in Singapore.

Types of Business Structures

There are various types of business structures, and each has its advantages and disadvantages as follows:

Sole Proprietorship

An individual fully owns a company under sole proprietorship. As it is not considered a separate entity from its owner, it does not go through incorporation, but the owner still needs to register it. Sole proprietors have full autonomy over all decisions about the company. Thus, this structure offers a high degree of business agility valued in the competitive business landscape, where speed is the key to capitalising on opportunities. As a bonus, sole proprietorship companies are easy to start up and do not involve profit sharing. However, this legal structure can have potential downsides as follows:

• Sole proprietor has full liability for all debts and obligations: This can be financially stressful, especially since a business’s product or service development process is often capital-intensive.
• Limited access to financing: As the business owner faces unlimited liability, banks consider sole proprietorships risky, which can lead to difficulties in obtaining loans.
• Potentially higher tax: Companies in Singapore are taxed at a fixed rate of 17%. However, sole proprietors treat their profits as personal income. Thus, sole proprietors can be subjected to a higher tax rate of up to 24%.

Due to the extent of responsibility borne by sole proprietors, this structure often best suits small businesses with low risk.

Private Limited Company

A private limited company can have a maximum of 50 shareholders, and it does not publicly list its shares. This structure is favoured because of these advantages:

• Financial and legal protection: Recognised as a standalone legal entity, any debts and losses incurred by the business or legal actions against it will not affect its shareholders.
• Tax benefits: Companies with this structure face a flat corporate tax rate instead of potentially encountering a higher personal income tax rate. They also enjoy extra tax benefits and exemptions.
• Ease of accessing capital: Since incorporation limits the liability to investors, which minimises the risk of their investment, a private limited company will appeal more to investors. Consequently, entrepreneurs may find it less challenging to raise capital to support business growth.

However, this structure typically subjects companies to more stringent disclosure requirements. For instance, they are required to file the Annual Returns and Director’s Report after incorporation. Professional company incorporation services providers in Singapore can easily resolve these concerns.

Limited Liability Partnership

A limited liability partnership (LLP) is a business structure combining the features of a partnership and a corporation. The entity, owned by two or more partners, legally separates from its owners. As such, LLPs are advantageous for several reasons:

• Financial protection.
• LLP partners will not face implication even when they are liable for losses due to their own wrongdoings.
• Perpetual succession of a LLP promises greater business continuity and security that makes companies with this structure enticing to investors.

However, individual LLP partners can enter into business agreements without the consent of other partners. Thus, this poses concerns about potential conflicts disruptive to operations. LLPs are often more suitable for professionals such as accounting or law firms whose work relies heavily on reputation.

How to Register and Incorporate a Company in Singapore

After you have decided on the business structure of your company, the next step involves preparing for registration or incorporation, and here are the key things you need:

• One or more directors (one director must be resident in Singapore)
• Company secretary
• Auditor
• One to 50 shareholders
• A minimum of S$1 share capital

You will also need to file the list of documents below with ACRA:

• Company name
• Description of a business’s intended activities and services
• Particulars of shareholders, directors and secretary
• Registered address in Singapore
• Details of share capital
• Constitution

Apart from the above, specific requirements may vary depending on your business structure and the type of applicant you are. For private limited companies, company secretary reporting and annual general meetings are necessary. Meanwhile, as foreigners cannot independently register companies under any business structure, they must enlist the help of a company incorporation service provider in Singapore.

Hassle-free Incorporation in Singapore with Segovia’s Services

With the amount of paperwork to navigate and each step of the application involving tedious processes, company incorporation and registration can be daunting and challenging for entrepreneurs to manage independently. At Segovia, doing the heavy lifting for entrepreneurs so they can focus on the truly vital aspects of their business is at the heart of what we do. That is why we offer a comprehensive portfolio of services to help entrepreneurs. These range from incorporation, directorship and secretarial services to accounting and banking that will be helpful for your firm from set up to expansion. With over 20 years of track record in the industry, we are confident in leveraging our experience to incorporate your company smoothly and efficiently so you can start growing your business in Singapore quickly. Reach out to us today to learn how our services can fit into your business plan.