Starting a company in Singapore is simple and straightforward. You can incorporate your company online via Accounting and Corporate Regulatory Authority (“ACRA”) website. You will need a Singpass to gain access to the portal. Once you are logged in, you can simply follow the steps below to start your own company.
- Selection of a name for your company.
You can check if your preferred name is available to use on Accounting and Corporate Regulatory Authority (“ACRA”) website. Sometimes, your preferred name may not be available because the name contains similar terms or phrases that other companies have used. Common terms include “ventures”, “global” and “investment”.
- Make sure you have a local director for your company
In Singapore, a foreigner can own 100% of the company but need a local director. A local director refers to a Singaporean, Singapore Permanent Resident or a foreign individual who holds an employment pass and work permit.
- Assemble your shareholders and determine their respective shareholding
The minimum share capital in Singapore is one dollar. There is also no ceiling for share capital. You need to specify the currency that the share capital will be based in. The amount of share capital that you determine belongs to the company and is entirely up to the company to use for the purpose of conducting the business. There is no need for you to restrict the usage of the share capital, unlike other countries.
Individuals who have voting rights are usually classified as ordinary shareholders. If you are intending to have investors and plan to reward the investors by allowing them to have their cut on dividends first before the ordinary shareholders, these shareholders are classified as “Preference Shareholders”. Preference shareholders can either have a voting right or no voting right.
- Determine the registered office address
Every company must have a registered office. The registered office must be open and accessible to the public for at least three hours during ordinary business hours on each business day. This is to allow the public to reach out to the office if necessary and to deliver any legal documents to the office.
- Decide on financial year-end
The company needs to decide on their financial year-end. The financial year-end marks the completion of an accounting cycle. Your financial accounts should be prepared in accordance with the financial year-end.
Financial year-end need not follow the calendar year. You can choose to end your financial year in any month. We would recommend you select the financial year-end on a 12-month basis. This would allow you to utilize the tax exemption scheme fully for your company. For example, if your company is incorporated on 15 July 2021, then the financial year-end should be 30 June 2022.
Company Incorporation in Singapore – DIY or via a Service Provider?
Although you can incorporate the Company online via the ACRA website, we strongly encourage you to use a service provider like YTK Management Consultants. These are a few reasons:
- Filing the application online is merely the first step. You can get the company incorporated but you need to prepare the share certificates and resolutions to document the existence of the shareholders and the company. These documents are necessary for future company operations such as the opening of bank account and getting investors to invest in the company. These documents should be prepared by a professional.
- You may make mistakes during the application process and rectifying the mistake later could be costly. One of our clients wanted to put down $10,000 as paid-up share capital. However, he made a mistake and put down $10,000,000 as paid-up share capital. When he realized that he made a mistake, he was horrified and needs to file a “Notice of Error” and explain the error to ACRA. It costs him his time and money to rectify the error.
Starting a Company is easy but maintaining a company is tough. At YTK, we understand your situation and the motivation to start the company. We will be able to advise you on compliance issues, and how to protect your company and your interest moving forward.