Incorporation of Singapore company
SINGAPORE COMPANY INCORPORATION
(A) PROCEDURES/ESTABLISHMENT COSTS
(1) The Approach
The first requirement to register a Company under the Companies Act (Chapter 50) is to apply to the Accounting & Corporate Regulatory Authority (ACRA) for reservation of the proposed Company name. Once the name is approved, it is reserved for two months and the ACRA will not allow use of the same name by any other person.
If incorporation is to be proceeded with, it involves submitting to ACRA incorporation papers, including the Company’s Memorandum and Articles of Association, particulars of a subscriber who must be a Singapore National or a Singapore Permanent Resident or an Expatriate holding a valid Singapore Employment or Dependent Pass. To expedite the
Company’s incorporation, the subscriber can be yourself while in Singapore or one Professional.
(2) Incorporation Period
It generally takes one day to incorporate a Company. This includes the application for approval of reservation of proposed Company name by using one of our professionals as subscriber for the initial 1 (one) unit share and acting as the first “local director”, if desired. Following your instruction, the nominee will transfer the 1 (one) unit share to the Company’s Beneficiary and resign on incorporation of the Company.
(3) Cost of Company Incorporation
Our charges are upon request for the incorporation of a Singapore Company, excluding 7% Goods & Services Tax and disbursements, are the following:
· Formation Fee
· Company’s Secretary (annually)
· Registered Address (annually)
· Mailing Address (annually)
· Local Director (3 months/12 months)
· Nominee Shareholder (annually)
· Deposit for the Director’s Services (refundable)
· Business Plan Development (for EntrePass Applications only)
· Assistance to set up a bank account with Singapore-based bank (OCBC, DBS, UOB, CIMB)
Quotation always is given
· Setting up a trust in Singapore using an existing Singapore Company as a Trustee
We may add that we have dormant companies available for your use on an immediate basis. Where incorporating a new entity is desired, we will be delighted to accept the assignment to incorporate a Company for your requirement. This will take about two to seven working days from the date of our submission of the preferred name to the ACRA.
A standard set of corporate documents of a Private Company Limited by Shares (Singapore) includes:
1) Company Business Profile, Printout from Registrar of Companies & Business of Singapore;
2) Memorandum and Articles of Association, signed by the Subscriber/s of the Company.
3) Minutes of the Meeting (Pre-Incorporation Memorandum of Association), signed by the Subscriber/s of the Company;
4) Written resolutions of Directors and Shareholder, a document confirming appointment of the Nominee Director/s and Shareholder/s of the Company;
5) General Power of Attorney, signed by the Nominee Director/s. Name and surname of the Attorney must be specified at the moment of purchase of the Company;
6) Agreement for the provision of nominee services and indemnification of the nominee, a document confirming the ownership rights of the Beneficial Owner. Signed by the Nominee/s;
7) Share Certificates, signed by the Nominee Director/s;
8) A seal of the Company;
9) Full Set of Documents (include true copy of Documents: 1; 2; 3; 4; 5 & 6), certified by UK Notary and Apostille.
10) Certificate Confirming Incorporation of Company (true copy) in English language, issued by the Registrar of Companies & Business of Singapore, certified by Singapore Notary public & Ministry of Foreign Affairs of Singapore;
There is no restriction on a Singapore Company being 100% foreign owned. The Companies Act allows for a single person to incorporate and maintain the Company. One of the directors, however, must be a “local resident” i.e. a Singapore National or a Singapore Permanent Resident or an Expatriate holding a valid Singapore Employment or Dependent Pass.
(5) Company Bank Account/s Opening
To facilitate the Company’s Bank account/s opening, we recommend that it be incorporated with an individual shareholder or shareholders to avoid necessity of the banks to perform due diligence on any corporate shareholder. Such Bank account/s can be operated by Executive(s) nominated by the Beneficiary(ies) of the Singapore Company. Following opening of the Bank account/s, share/s of the Company can then be transferred to any corporate shareholder.
A Singapore Company is required to have a minimum of one resident director at all times. The resident director must again be a “local resident”. In addition, a Cypriot director can be appointed with the Singapore director. It is also the requirement that the Company has at least one Company Secretary who must be appointed within six months of the incorporation of the Company. Where a director is the sole director of a Company, he shall not act or be appointed as the secretary of the Company. The Company Secretary is required to maintain the statutory records and attend to the filing of statutory papers with the ACRA.
(7) Audited Accounts
A Singapore registered Company is required under the Companies Act to have its accounts audited annually and approved at the Company’s Annual General Meeting which is required to be held annually. An Auditor accordingly must be appointed within three months of incorporation of the Company unless it qualifies to be an “exempt private” Company on satisfaction of the following criteria:
· No corporate shareholders and with less than 20 shareholders who are natural persons;
· Annual turnover does not exceed SGD 5 million;
· It is not insolvent as at the end of any financial period or financial year.
Where applicable and, on electing for such an exemption, the onus of ensuring that the Company’s accounts are properly prepared is on the Board of Directors in general and the Managing Director in particular. It is, however, expected that the Revenue Department will scrutinize in more depths when the accounts are not certified by an independent Firm of Certified Public Accountants.
Any Company which is insolvent at the date that the profit and loss account for the financial year has been made up is required to submit the following documents for filing with ACRA:
(a) Report and Statement of the Directors;
(b) Last Balance Sheet;
(c) Last Profit & Loss Account; and
(d) Notes to the Accounts
A solvent Company, however, needs only to lodge an exempt private Company certificate to the Authority.
(8) Registered Office
All Singapore companies must have a registered office in Singapore to which official communications and notices are addressed. The registered office may or may not be the place of business. Our service provider’s office can be used as the registered address. A P. O. Box address is not allowed.
(9) Authorized/Paid-Up Capital
No requirement to state the authorized capital of a Company in the Company’s Memorandum of Association. The share capital of the Company will be referred to as the “Issued Capital” in ACRA’s records and reports. The term “Paid-Up Capital” will be used to denote the amount paid on the shares issued. Paid-up Capital along with the Company’s yearly accounts can be denominated in any international currency other than Singapore Dollars (SGD). However, if it is the intention of a non-Singapore shareholder/director to apply for a Singapore Employment Pass to be employed as the Company’s Executive Director, reasonable paid-up capital in the region of SGD100,000 is recommended depending on economic requirements of the Company.
Depending on the working capital requirement of a Company, it would be appropriate for the Company’s issued/paid-up capital to be an amount sustainable for its business operations. Capitalization for the Company’s equities could be reviewed following incorporation.
(10) Singapore Business Federation (SBF)
The SBF was inaugurated on 1st April 2002. In accordance with the provisions in the SBF Act 2001, companies with paid-up capital of SGD 0.5 million and above become statutory members of SBF and are liable to pay the following prescribed annual subscription fees.
The subscription rates are as follows:
Company Paid up Capital Annual Fees (without GST)
SGD 10 million and above SGD 800
SGD 5 million to less than SGD 10 million SGD 600
SGD 1 million to less than SGD 5 million SGD 400
SGD 0.5 million to less than SGD 1 million SGD 300
(B) STATUTORY COMPLIANCE SERVICES
(1) Non Exempt Company
A Singapore incorporated Company is required to:
· Submit annual accounts which are certified by a Firm of competent Certified Public Accountants in Singapore if audit exemption criteria are not satisfied;
· Appoint a ‘qualified’ Corporate Secretary to ensure that the Company complies with the provisions in the Companies Act; and
· Submit its Tax Returns based on the accounts of the preceding financial year.
(2) Audit Services
The audit service, subject to satisfaction of the ‘audit exemption’ criteria and requirement of your Company’s Board of Directors, will be provided by our Audit Division, Singapore Assurance PAC (Public Accounting Corporation), upon nomination by the Company’s shareholders.
Annual audit fee, which may be billed as work progresses, is based on time required by our staff assigned to the engagement plus direct out-of-pocket expenses. Individual hourly rates vary according to the degree of responsibility involved, experience and the skill required. As an indication and generally based on our experience, annual audit fee including preparing the financial statements in XBRL (Extensible Business Reporting Language) format varies between 0.15% to 2% on the Company’s turnover subject to a minimum fee of SGD 800 if no trade activity was transacted.
(3)(i) Corporate Secretarial Services
The Corporate Secretary must be appointed within 6 months of the Company’s incorporation and can be any of the Company’s Directors or a natural person who has his principal or only place of residence in Singapore and is one who is qualified and has the requisite knowledge and experience to discharge the functions of a secretary of the Company. It is however still a requirement for a Public Company to have an ‘approved’ person who is defined as an Advocate & Solicitor, an Accountant, a Member of the Singapore Association of the Institute of Chartered Secretaries & Administrators or a member of the Company’s Board to act as Corporate Secretary.
The responsibilities of the Corporate Secretary primarily relate to:
· advising the Board of Directors on compliance requirements to the provisions in the Companies’ Act;
· circulating notices relevant to the Company’s filing of document relating to its Annual General Meeting;
· maintaining the Company’s statutory records;
· assisting in preparation of documents for the Company to establish its bank account;
· assisting in the preparation of Resolutions on decision policies of the Company; and
· providing general guidance on the Companies’ Act.
For all of the above services, an annual fee of SGD 1,000 is charged with such a fee payable in advance and pro-rated for refund in the event of termination of such services. A Service Agreement will be drawn to incorporate the aspects.
Where our office is to be used as the Company’s registered address to receive communications from the Government and other statutory bodies, the charge is SGD 800 annually.
(3)(ii) Singapore Companies Act, Chapter 50
COMPULSORY FILING OF FINANCIAL STATEMENTS IN EXTENSIBLE BUSINESS REPORTING LANGUAGE (“XBRL”),– EFFECTIVE FROM 1 NOVEMBER 2007
Effective 1st November 2007, a Singapore incorporated Company is required to lodge with the Accounting and Corporate Regulatory Authority (“ACRA”) its accounts in eXtensible Business Reporting Language (“XBRL”).
In compliance with the provisions in the 8th Schedule Amended Provisions to the Companies Act, Chapter 50 and the Companies (Filing of Documents) Regulations, it is necessary for your Company to translate its financial statement in XBRL format for our filing on your Management’s behalf with ACRA. To facilitate preparation of the XBRL Financial Statements, ACRA has provided free online software “FS Manager” for the data processing. Kindly visit www.bizfile.gov.sgfor details. However, accuracy and correctness of Financial Statements in XBRL remain the responsibility of the Directors instructing us as the Company Secretary to submit the relevant accounts to ACRA.
A Singapore incorporated companies which are either limited by shares or unlimited are required to file the financial statements in XBRL format, in either one of the following two options –
Option A - Filing a full set of financial statements in XBRL format
Option B - Filing only partial Balance Sheet and Income Statement in XBRL format
A company which elects to file its full set of financial statements in XBRL format (Option A) with its AR will have to use FS Manager to prepare its full set of financial statements for tabling at the AGM.
A company which elects to file only its Balance Sheet and Income Statement in XBRL format (Option B) must also file a Portable Document Format (PDF) along with copy of its full set of financial statements as tabled at the AGM.
Following companies are exempted from filing of annual financial statements in XBRL format:
(i) Banks, insurance companies and finance companies whose activities are regulated by
the Monetary Authority of Singapore; and
(ii) Companies that are allowed by law to prepare accounts in accordance with accounting standards other than the Singapore Financial Reporting Standards or the International Financial Reporting Standards.
In relation to compliance requirements, time costing fee for your Auditors’ provision of the relevant services as summarized:
Financial Year’s XBRL Preparation Fee
Option A – Full set at time costing charge of SGD1000.
Option B – Partial set at time costing charge of SGD700.
Kindly advise if no assistance is required from your Auditors to prepare your Company’s annual accounts according to XBRL format. Quotation always is given.
(4) Income Tax Services
Our Practice provides specialized consultation and advice on tax planning in addition to the rendering of compliance services relating to preparation and submission of the tax computations with supporting schedules for the Company and its executive employees. We will communicate with the Comptroller of Income Tax direct as the Company’s Tax Agent and attend to related issues. Our estimated annual fee for the comprehensive responsibility is estimated to be in the region of SGD 2,000. A tax service for an individual’s compliance to the provisions in the Singapore Income Tax Act is SGD 1,500.
The fee for tax planning and consultation is based on complexities of the requirements.
Hourly time cost for any specific assignment is SGD 700.
(5) Accounting Services
With adequate information and explanation furnished by the Company, the following accounting services can be provided:
· maintaining and updating the cash book, sales, purchase and general journals;
· compiling general ledgers;
· preparing a detailed Trial Balance and Bank Reconciliation;
· preparing a statement of Accounts Receivables/Payables;
· preparing the Balance Sheet and Profit & Loss Account.
Our functions will include:
· ensuring that the accounts of the Company are maintained in accordance with the accounting policies established by the Company;
· submitting periodic reports to the Company on our observation on matters relating to accounting and internal controls with recommendations for improvement, if applicable.
For the relevant services, the charges are:
· For nature of the Company’s services, the annual accounting fee ranges from SGD 4,000 to SGD 7,000 depending on volume of the Company’s activities. This fee can be mutually reviewed after the first six months of our rendering services; and
· Reimbursement for stationeries, transport, photocopying charges and other incidentals incurred on the Company’s behalf.
We may mention that we have a range of software for computerizing clients’ accounts and will be glad to elaborate on the scope for the computerization of the Company’s accounts, if requested.
(6) Goods and Services Tax Compliance
Registration for GST is obligatory where turnover of the Singapore Company is expected to be SGD 1 million or more. In any other situation, we will advise on the merits to register on a voluntary basis to claim refund, if appropriate, of the 7% ‘input’ GST. We will be delighted to assist in the Company’s GST application for a fee of SGD 1000 and in its submission of the quarterly GST Return for an annual nominal fee of SGD 3,000.
(7) Corporate Tax
Corporate Tax: 0 – 17% max
New startup companies (for the First 3 Years of Assessment):
First S$100,000: No Tax
S$100,001 – S$300,000: 8.50%
Above s$300,000: 17%
Single-tier corporate tax system
Taxation of Dividends: None
Capital gain tax: None
Foreign-sourced Income: Tax–exempt
Singapore Tax is based on 2 factors:
1. The profit was made in Singapore, and
2. The profit is remitted into Singapore.
Usually, if the profits are not remitted into Singapore, then the profit is reported but not taxed. It would be better if the company has another office somewhere else that does all the business. In addition, note that the company is not subject to Singapore Double Tax Treaties.
(C) NOMINEE SERVICES
A Singapore incorporated Company requires a minimum of one director who must be a ‘local director’ defined as either a Singaporean or Singapore permanent resident or an expatriate having a valid employment pass to work in Singapore. We can assist in securing the services of a ‘local director’ on the Company’s behalf for an annual fee of SGD 3,200 with refundable deposit of SGD 3,200 payable in advance.
Where a nominee shareholder is needed, this can be provided at a nominal annual fee of
SGD 2,000 with a Service Agreement, Power of Attorney and Trust Deed executed in favour of the beneficiary.
(D) APPLICATION FOR SINGAPORE EMPLOYMENT PASS,
PERMANENT RESIDENCE AND SINGAPORE CITIZENSHIP
We will discuss with the candidate on the degree of possible success before submitting the application for the above to the Immigration Authorities. Our fee is:
· Employment pass (per application) 2000
· Employment pass and resident visa for an applicant and his family
(per application) 2500
· Permanent residence for an applicant and his family } Depending
· Singapore citizenship after permanent residence is obtained } on Complexity
Our responsibilities for the assignment include ascertaining from the applicant particulars required for the completion of the Forms for submission to the Ministry of Manpower
(MOM), a write-up of the rationale for favourable consideration by the MOM and liaising with the Authority on matters relating to the application.
Application for an expatriate’s Permanent Resident (PR) status in Singapore can be a consideration after receiving the Employment Pass and following two consecutive employment years in Singapore. Submission for PR can include those of immediate family members with children less than 16 years of age. Male children who choose to retain their Singapore Permanent Resident status are, however, required to serve a term of two years National Service on reaching 18 years of age. This does not apply to daughters of the Singapore PR family.
(E) STAFF PAYROLL ADMINISTRATION
This will be by our computerized payroll software system for preparing details of the Company’s monthly staff remunerations for prior approval before payment, from funds received by us, to each of the employee’s bank account. Scope of such services will be mutually agreed by a Service Agreement for following fees to be charged:
· One time initial set-up cost including registering the Company
for Foreign Worker Levy, Skill Development Levy and or 800
Central Provident Fund contributions, where applicable
· Monthly minimum processing fee for 5 employees 300/month
· Each additional employee after the 5th staff 100/month
(F) COMPANY CLOSURE
Please be informed that disposal of the Company for whatsoever the reasons render it obligatory for the Director/s to:
· Ensure submission of the Company’s accounts for all the years up to and including the year or period to the date of the Company’s closure.
· Following the above, obtain a tax clearance from the Inland Revenue Authority of Singapore.
· Comply with the provisions in the Singapore Companies Act.
Minimum professional costs/fees for closing the Company are in the region of SGD 5,000 and can be substantially more depending on complexity of the reason/s for the Company to apply for its deregistration for approval at discretion of the Accounting & Corporate Regulatory Authority or for it to wind up on voluntary basis. Quotation is always given.
1. A company is required to keep proper accounting records and any other such records that will sufficiently explain the transactions and financial position of the company and enable true and fair profit and loss accounts and balance sheets to be prepared and audited, if necessary.
Requirement for AGM & Accounts
2. Section 175 of the Act requires a company to hold its first AGM within 18 months from the date of its incorporation. Thereafter, an AGM must be held in every calendar year and not more than 15 months after its last preceding AGM. Please note that dormant and/or single director-single shareholder companies are also required to hold AGM and file AR with ACRA every year.
3. For the convenience of private companies, with effect from 15th of May 2003, section 175A of the Act was introduced to allow private companies to dispense with the holding of the AGM. Where an AGM has been dispensed with, matters which are to be dealt with at an AGM are dealt with by way of written resolutions.
4. For the financial year commencing from 15th of May 2003, if your company is dormant or if the turnover does not exceed the prescribed amount, you only need to prepare and lay before your shareholders, un-audited financial statements.
5. Please also note that with effect from 1st of November 2007, locally incorporated companies that are required to file accounts with ACRA, other than those under the excluded categories, are required to prepare a set of accounts in eXtensible Business Reporting Language (XBRL) and file these with their AR if the accounts relate to financial years which end on or after the 1st of April 2007. Exempt private companies which are solvent are not required to file accounts with ACRA. Please refer to practice Directions No. 2 and 5 of 2007, No. 3 of 2008 and No. 4 of 2009 on ACRA’s website for more information.
Requirement for AR
6. Within one month of the AGN or the passing of written resolutions in place of the AGM, the directors will have to file the AR online via Bizfile to comply with section 197 of the Act. For more information on AR, please visit ACRA’s website and select ‘’Company’’ followed by ‘’Making Changes’’ and ‘’Filling Annual Returns of Local Company’’.
7. Effective from 24th of April 2010, companies that comply with all 3 requirements under sections 175, 197 and 201 of the Act will have a green tick reflected in ACRA’s online Directory of Registered Entities and be eligible for a Certificate of Compliance whilst those not in Compliance with any or all the requirements will receive a red cross and not eligible for the certificate. Upon lodging the Annual Return you can check the company’s compliance status from the Directory at www.acra.gov.sg under the heading ‘’Quick Links’’ followed by ‘’Directory Search’’ and ‘’Registered Business Entities’’. For more information refer: http://www.acra.gov.sg/Compliance/Compliance_Rating_and_Certificate/
Extension of Time
8. If your company requires more time to comply with requirements for holding AGM and laying the accounts, please apply for an extension of time before the due date, online via Bizfile. More information on Application for Extension of Time under section s175 and/or s201 can be found on our website by selecting ‘’Compliance’’, followed by ‘’Applications for Extension of Time’’.
Dormant companies and striking off
9. If your company has been dormant and/or there is no intention to commence/continue activities in the future, you may consider applying to the Registrar to strike off the name of the company via Bizfile at www.bizfile.gov.sg. More information on striking off (including the criteria) and other modes pf closing local company can be found at ACRA’s website at www.acra.gov.sg by selectinf ‘’Company’’ and ‘’Closing a Local Company’’.