Setting up a private limited company in Singapore
Foreign investors have several choices when it comes to company formation in Singapore. The most preferred type of company is the limited liability company(LLC). Singapore limited liability companies are also referred to as company limited by shares in which the responsibilities of the shareholders are limited to the amount they invested in the company. According to the Singapore Company Act, limited liability companies are legal entities separated from their members, the personal assets of the shareholders being protected from any business liability.
Bestar (LimitedCompanySingapore.com) is a partner of BridgeWest, but is also affiliated with several important international organizations, among which the Australian-Thai Chamber of Commerce, the Hong Kong General Chamber of Commerce, the Thai-Swedish Chamber of Commerce, the Thai-Canadian Chamber of Commerce, and the Affiliatica web portal. The company is also a member of the Institute of Singapore Chartered Accountants.
With a vast experience in company registration in the city-state, our local specialists can help foreign entrepreneurs who are interested in setting up a private limited company in Singapore.
The Company Law on limited liability companies in Singapore
As mentioned above, the Company Act is the main law to provide for the opening of a business in Singapore. According to it, there are several types of companies which can be incorporated in the city-state. These business forms are the same for local and foreign entrepreneurs interested in having a Singapore company.
Among the structures available for those who want to open companies here, the Singapore limited liability company is preferred by most investors. Based on the provisions of the Company Act, there are several forms of limited liability companies which can be created in Singapore. These are:
- - the private limited liability company, which is also the most employed type of structure in Singapore;
- - the private exempt limited liability company which has certain restrictions in relation to the number of shareholders;
- - the subsidiary company which in Singapore is provided for the Company Law, compared to other jurisdictions;
- - the public limited liability company which is available for those interested in setting up large operations in Singapore;
- - the Singapore public company limited by guarantee which can be created for non-profit purposes.
A few aspects which need to be considered when setting up a limited liability company in Singapore is that the private exempt company requires a maximum number of 20 shareholders, while the public company requires at least 50 shareholders. It can also trade its shares on the Singapore Stock Exchange. If you want to open a company in Singapore and need assistance in choosing the right type of structure among the limited liability companies available for incorporation our experts are at your disposal.
What are the requirements for opening a limited liability company in Singapore?
The Company Act establishes the minimum share capital for registering a limited liability company in Singapore is 1 SGD. The shareholders can decide the amount they need in order to successfully start their business. The Singapore limited liability company must have at least one shareholder and maximum number of 50 and their shares cannot be traded on the Stock Exchange. The name of the private limited liability company must end in “Private Limited” or “Pte Ltd”. The Commercial Code provides for both natural persons and corporate entities to register limited liability companies in Singapore. The limited liability company is the perfect choice for foreign companies opening subsidiaries in Singapore. Limited liability companies must have at least one director and a company secretary who must be a Singapore resident.
Company formation procedure for a PLC in Singapore
The first step towards setting up a private limited company in Singapore is to choose and reserve a name for the company. The business name reservation application is submitted with the Singapore Accounting and Corporate Authority. The second step is to have the company’s Memorandum and Articles of Association drafted. The registration of private limited company in Singapore requires the appointment of local agents who will handle the incorporation procedure. After the company is incorporated it must also register for taxation purposes. Our consultants in company registration in Singapore can draft the Memorandum and Articles of Association for you company and can also handle the incorporation procedure.
Documents for setting up a private limited company in Singapore
The following documents must be provided upon the registration of a limited liability company in Singapore:
- the shareholders’ identification papers, which can be the ID in the case of Singapore citizens and the passport in the case of foreign citizens;
- information about the company’s director or managers and the company secretary;
- the company’s Memorandum and Articles of Association which must be notarized;
- the receipt showing the payment of the company registration fee with the Trade Register;
- proof of the registered address in Singapore, which can be represented by an office rental contract;
- additional information will be required in case one of the shareholders is a company.
Our Singapore company formation agents can assist with the preparation of the documents for setting up a private limited company in Singapore.
The Articles of Association of a Singapore limited liability company
The main documents related to the establishment of a limited liability company are the Articles of Association which are the statutory documents of any business in Singapore. The Articles of Association of a limited liability company must contain the following information:
- the name of the company, the date of its incorporation and the date of its termination (where applicable);
- the names of the shareholders, their residence addresses and the number of shares held in the company;
- the names of the directors, their personal information and information about how they are appointed and removed;
- information about the share capital of the company, the number of shares issued, their distribution among the shareholders, and the types of shares issued;
- information about the company secretary who needs to be a Singapore resident (nominee services can be provided for such a role);
- the main object of activity of the company and other secondary objects of activity (if necessary);
- information about the legal address of the company (it must have a registered address in Singapore);
- information about the date of the general annual meeting and other resolutions passed by the shareholders.
The Articles of Association must be filed with ACRA upon the registration of the company. Also, anytime a change is brought to the company, these documents must be amended.
It is important to note that a Singapore limited liability company must have a legal address in the city-state all the time. Also, upon registration on in maximum 14 days after registration, the working hours of the company must be declared with ACRA, according to the Company Law. A limited liability company must also have a seal which can be made before the registration procedure is begun.
Why register a limited liability company in Singapore?
The limited liability company is the preferred choice of a business form for both local and foreign investors in Singapore. This is because the shareholders will have limited accountability for the obligations and the debts of the company. Their responsibility will be limited to the amount they invested. Also, the company formation requirements are minimum when it comes to the shareholding and management structure of the business, as seen above.
However, foreign enterprisers are required to hire a local consultancy firm or appoint a local agent resident of Singapore to carry out the registration procedure. Other than that, there are no special requirements or business licenses when opening a PLC in Singapore. Our specialists in company formation will provide you with more information about the advantages of limited liability companies.
Taxation of limited liability companies in Singapore
From a taxation point of view, Singapore has one of the lowest corporate taxes in Asia: 17%. However, startups registered as limited liability companies may also benefit from full tax exemption during their first year of activity. Apart from this, the Government also enables various incentive schemes under which investors can apply for tax exemptions or deductions.
Foreign companies can also register subsidiaries under the form of limited liability companies and thus benefit from Singapore’s double taxation agreements.
From an accounting point of view, the private limited company in Singapore is required to prepare its annual balance sheets which must be audited and filed with ACRA. The advantage is that there are many professional accounting firms offering tailored accounting services to foreign owners of limited liability companies.
Accounting requirements for limited liability companies in Singapore
Considering there are several types of limited liability companies which can be established in Singapore, it should be mentioned that the accounting requirements will depend on the form of the company. For example, private and exempt limited liability companies will benefit from simplified accounting and audit requirements, while public companies will be subject to more stringent requirements.
We are at your disposal with both company formation and accounting services for your limited liability company in Singapore.
How can a Singapore limited liability company be used?
A limited liability company can have several uses in Singapore. Among these are:
- - it can be used as a subsidiary by foreign companies interested in doing business in Singapore;
- - it can be used as a holding company, which is one of the best tax minimization tools in Singapore;
- - it can be used as an offshore company and thus address other markets around the world;
- - its main use is that of an onshore company employed for trading purposes in Singapore.
You can also contact us for any other information related to setting up a private limited company in Singapore or any other type of company. You can rely on our company registration representatives for personalized advice in opening a company in Singapore, including a limited liability company. We can handle the business incorporation procedure from the beginning until the end.