Company Incorporation in Singapore for Foreigner
9 Essential Facts
for Foreigners Setting Up a Business in Singapore
Singapore is an attractive location for foreigners looking to set up businesses, due to its supportive regulatory environment, favourable tax system, and stable political climate.
Here are 9 essential facts to help you navigate the process:
Key Advantages for Foreign Entrepreneurs in Singapore
Setting up a business in Singapore for foreigners offers numerous benefits, including:
100% Foreign Ownership
Business-friendly Low Corporate Tax Rates
Stable Political and Social Environment
Comprehensive Banking Facilities
Choosing the Right Business Structure
Foreigners setting up a business in Singapore can choose from several business entities:
A Pte Ltd is a popular choice due to its scalability, credibility, and tax advantages. It is a separate legal entity owned by shareholders and requires a minimum paid-up capital of SGD $1. Foreigners need to appoint a local resident director (Singapore Citizen or Singapore Permanent Resident) and obtain an Employment Pass (EP) to manage their company in Singapore.
This is the simplest and most cost-effective business structure, owned and managed by a single individual. However, the owner is personally liable for the business’s debts and losses. Sole proprietors pay personal income tax on their business profits.
Foreigners can register a sole-proprietorship in Singapore, but they must appoint an authorised representative who is a legal resident in Singapore if they reside outside of Singapore. A legal resident includes: Singapore citizens. Permanent Residents.
Foreigners who wish to be present in Singapore to manage the operations of a sole proprietorship or a partnership must seek approval from the Ministry of Manpower after registering the sole proprietorship or partnership.
An LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company. The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.
It is generally preferable for professional services firms but may have more complex regulatory requirements than other business types.
Obtaining a Work Pass
To work in Singapore to as a foreigner, you must obtain a work pass. Several options are available:
Employment Pass (EP)
Suitable for foreign professionals, managers and executives. EP applicants need to earn a minimum fixed monthly salary of S$5,000 (S$5,500 for financial services sector) and pass the Complementarity Assessment Framework (COMPASS) by the Ministry of Manpower.
EntrePass
Designed for foreign entrepreneurs who are keen to start and operate a business in Singapore that is venture-backed or possesses innovative technologies.
Tech.Pass (by EDB)
Tech.Pass is a visa that allows established tech entrepreneurs, leaders or technical experts from around the world to come to Singapore to perform frontier and disruptive innovations. Aimed at elite tech professionals, the Tech.Pass targets experts in fields like e-commerce, AI, and cybersecurity, enabling them to contribute to Singapore’s tech ecosystem.
To be eligible for the pass, applicants must satisfy any two of the following conditions:
- Have a last drawn fixed monthly salary (in the last 1 year) of at least S$22,500.
- Have at least five cumulative years of experience in a leading role in a tech company with a valuation/market cap of at least US$500mil or at least US$30mil funding raised.
- Have at least five cumulative years of experience in a leading role in the development of a tech product that has at least 100,000 monthly active users or at least US$100mil annual revenue.
Appointing a Local Director and Corporate Secretary
Foreigners setting up a business in Singapore must appoint a local resident director and a company secretary. The local director ensures compliance with Singapore company law, while the corporate secretary acts as a liaison with authorities.
Opening a Corporate Bank Account
A corporate bank account is essential for business operations. Entrepreneurs must provide incorporation documents, identification for directors, and the company’s constitution to open an account.
As part of tightening KYC requirements by the banks, the directors and business owners may also need to provide detailed resumes with experience relevant to the business they are setting us, as well as communicate their business model, customers and suppliers as part of the assessment to fulfil Anti-Money Laundering and Counter Financing of Terrorism requirements.
Navigating Legal Compliance and Licensing
Foreign business owners must navigate legal compliance and obtain specific licenses for industries like food and beverage, construction, finance, and education. Familiarity with regulations such as the Employment of Foreign Manpower Act (EFMA) and the Employment Act is crucial.
Government Assistance and Incentives
Singapore offers various support programs for foreigners setting up a business in Singapore, including grants, loans, and tax breaks.
Hiring Local Employees
Adhering to employment regulations and guidelines, such as the Fair Consideration Framework, is vital. Compliance with the EFMA and Employment Act ensures a positive work environment and avoids legal issues.
Annual Filing Requirements and Deadlines
All Singapore entities are required to file Annual Returns with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore, and submit annual Tax returns. The timelines of which depends on your chosen business structure.
Summary
Company Incorporation in Singapore for Foreigner
Setting up a business in Singapore for foreigners offers numerous growth opportunities, thanks to the supportive business environment, attractive tax regime, and government assistance. These 9 essential facts provide a basic understanding for foreign entrepreneurs to achieve success in Singapore’s dynamic market.
Our expert advisors are ready to provide personalized advice and compliance solutions.
Reach out at:
Let us help you navigate the incorporation process in Singapore smoothly and effectively.
Reach Out to YYC Corporate Services Pte Ltd
Led by a team of professionals, we can assist you every step of your entrepreneurial journey, covering incorporation, corporate secretary, implementing accounting software, bookkeeping, payroll, financial review, financial statements, taxation, corporate tax and GST (Goods and Services Tax) in Singapore.
Contact Info
60 Paya Lebar Road, #11-19, Paya Lebar Square, Singapore 409051
+65 8893 3960
enquiry@yycadvisors.com.sg