Doing Business in Singapore
Business registration procedures
Businesses in Singapore may be any one of 3 entities: sole
proprietorships, partnerships or corporations.
Sole proprietorship and partnership
A sole proprietorship
or partnership must be registered with the Registrar of Businesses
under the Business Registration Act. A partnership may consist
of individuals or companies, whether Singapore residents or
not. The number of partners must not exceed 20. Limited liability
partnerships can be formed in Singapore.
A private company is
one that restricts share transfers, limits membership to 50
and prohibits public invitation for subscription to its shares
or debentures or for loan of money to it. A variation of the
private company is the exempt private company, which is essentially
a private company but is conferred privacy on its financial
statements. Such a company does not have to file copies of
its financial statements with the Registrar of Companies (ROC).
A private company qualifies as an exempt private company if
it has not more than 20 members and if no beneficial interest
in its shares is held directly or indirectly by any corporation.
Thus, a local subsidiary of a foreign corporation cannot be
an exempt private company. Any company that is not a private
company is a public company. A public listed company is essentially
one whose shares are listed on the Stock Exchange of Singapore.
Why Incorporate a Company in
Singapore ranks as one
of the top most competitive and profitable places for business
investors. Singapore today is a reputable financial centre,
a key regional trading centre, the world's busiest port, and
a top location for investments and doing business.
Singapore's safe, pro-business environment is supported by
a well-respected government with transparent and consistent
policies that protect companies' physical and IP investments.
Small and medium size enterprises (SMEs) are critical to Singapore's
economic success. There are more than 100,000 SMEs in Singapore,
accounting for about 35% of the economy's value added and
more than 50% of the employment.
Singapore economy is based on free enterprise, with no restrictions
on foreign ownership of business. The repatriation of profits
and the import of capital are freely allowed. Singapore has
low corporate tax rate compared to other leading economies
in the world. Capital gains are not taxable.
Singapore Foreign Company Registration:
Subsidiary Company * Branch Office * Representative Office
A foreign company is
one that is incorporated outside Singapore and wishes to register
its business in Singapore. A foreign company may either register
an office for non-business purposes or for business purposes
For non-business purposes, it may register a Singapore
Representative Office where as to
conduct business it may either incorporate a Singapore
Subsidiary Company or as a Singapore
Branch Office of the foreign company.
The procedure and documentation for the registration
of a Singapore Subsidiary Company is different from that of
a Singapore Branch Office. Generally, it is faster and easier
to incorporate a Singapore Subsidiary Company.
There is no significant tax deviation on income derived by
a branch or a Singapore subsidiary company.
How are they different?
Singapore Subsidiary Company
This is the most widely
used option by foreign companies. A Singapore Subsidiary Company
is a separate legal entity altogether. Generally, the Singapore
government permits 100% ownership of the Singapore Subsidiary
Company by the foreign company.
A company requires to have a minimum of one director and one
shareholder. At least one of the directors must be ordinarily
resident in Singapore. There is no restriction on the number
of foreign directors that a company may have.
Singapore Branch Office
A Singapore Branch of
a foreign company is not a separate legal entity as it is
considered to be merely an extension of a company incorporated
A Singapore Branch does not have a distinct legal personality.
Therefore, its liabilities may be enforced against all the
assets of the foreign company, whether or not the assets are
in Singapore, and whether or not the liabilities are attributable
to the branch's operations in Singapore. Any action against
a Singapore Branch Office is tantamount to an action against
the head office.
As the Singapore Branch is regarded as an extension of its
head office, potential claimants (whether in the country of
incorporation, Singapore or elsewhere) would, therefore, also
have access to the Singapore courts in respect of the foreign
company's business activities worldwide.
A Representative Office
of a foreign company in Singapore can be used for promotional
activities only and it cannot enter into any business transactions
either in its own capacity or on behalf of the parent company.
A Representative Office in Singapore has very limited use
since it cannot engage in any other business activities but
Approval can take from one to two weeks and will usually be
valid for one year. A representative office must re-apply
for a continuation of its status after the expiry of the initial
period of approval.
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