Matters Related To The Establishment Of A Singapore Company

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It usually only takes one working day to set up a private limited company in Singapore.

Approval of company name

To establish a private limited company, you must first check whether the proposed name can be registered. You can check online whether the applied name is approved. If the company established needs to be transferred to other government departments for inspection and approval, it will take a longer time. For example: if the company intends to engage in financial-related business, the application will be transferred to the Monetary Authority of Singapore.

Capital

Singapore Pte Ltd has no pre-set capital requirements. The issued shared and paid-up capital may be S$1 per share. (the minimum issued share capital). However, for the purpose of applying for an Employment Pass, we recommend that a higher level of issued shares and paid-up capital be considered.

Directors

A private limited company must have at least one director who is a natural person aged 18 or above and an ordinary resident of Singapore. Ordinary residents of Singapore include Singapore citizens, Singapore permanent residents and persons who have obtained an Employment Pass/Principle Approval Letter/Dependent Pass issued by the Singapore Immigration Department. Other directors need not be residents of Singapore.

Shareholders

A private limited company must have at least one shareholder who is a natural person or corporate entity aged 18 or above. The shareholder does not need to be a Singapore resident. If the shareholder is a corporate entity, it must designate an individual to sign the establishment documents on behalf of the shareholder.

Company Secretary and Registered Office

Companies must appoint a company secretary within 6 months from the date of incorporation. This position cannot be left vacant for more than 6 months or the directors may face a penalty of up to $1,000.

A company secretary must be:

• A natural person.
• Locally resident in Singapore.

The sole director of a company and the company secretary cannot be the same person.

The company secretary’s duties include keeping legal documents and records and attending events where the secretary is required to participate, such as the annual general meeting.

Bookkeeping, Audit and Tax Representative, Audit and Tax Representative

Singapore companies must establish financial books, prepare financial statements and conduct annual audits. Submit annual tax returns (corporate income tax, etc.).

Unless your company is exempted from audit requirements under the relevant sections of the Companies Act, you must appoint an auditor within 3 months of incorporation.

Small Company Concept for Audit Exemption

A company qualifies as a small company if:

(a) it is a private company in the financial year in question; and

(b) it meets at least 2 of 3 following criteria for immediate past two consecutive financial years:  

1.      total annual revenue ≤ $10m;

2.      total assets ≤ $10m;

3.      no. of employees ≤ 50.  

For a company which is part of a group:

(a) the company must qualify as a small company; and

(b) entire group must be a “small group”

to qualify for the audit exemption.

For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.

However, companies exempt from annual audits are still required to prepare accounts and report to shareholders at annual general meetings.

In order to protect the interests of shareholders, any shareholder holding no less than 5% of the company's issued shares needs to notify the company in writing to request an audit of the company's accounts. Depending on certain circumstances, ACRA may require the company to submit an audit report.

The Annual Requirements

as per the Companies Act and Income Tax Act are as follows:

1. Companies Act requires that financial statements must be presented to shareholders at a general meeting of each financial year, which needs to be no more than 6 months from the end of a financial year.
   
   
2. If you are a listed company, you must hold an AGM within four months after your company’s financial year end and file the annual return within five months after your company’s financial year end. If you are not a listed company, you must hold an AGM within six months after your company’s financial year end and file the annual return within seven months after your company’s financial year end. 
   
   
3. If the company makes any changes, such as changing its registered office, directors or company secretary, increasing statutory and paid-up capital, etc., it must report to ACRA within the prescribed time. If it fails to notify ACRA, the company will be punished.
   
   
4. Every private limited company in Singapore that holds a paid-up share capital of S$500,000 or more is required to register with ACRA to become a legal member of the Singapore Business Federation ("SBF"). SBF acts as a bridge between the government and Singapore businesses to create a oriented business environment. Depending on the amount of paid-up capital, annual membership fees will range from S$300 to S$800.
   
   
5. The Inland Revenue Authority of Singapore (“IRAS”) also requires the submission of audited or unaudited financial statements when filing income tax returns, and must be submitted once a year. The current corporate income tax rate is 17%.