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.

Corporation

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?

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 in Singapore.

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 outside Singapore.

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.

Representative Office

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 promotional activities.

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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