Open a Private Exempt Limited Liability Company in Singapore
Updated on Sunday 20th October 2019
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A Private Exempt Limited Liability Company in Singapore (EPC) is a type of company that has the characteristics of the private limited company in Singapore and, in addition to this, it is subject to a special regime in terms of taxation as well as compliance requirements.
Any foreigner can open an exempt private limited liability company and benefit from the advantages related to the exemptions in the start-up stage of the business. As in case of other business forms, setting up a private limited company in Singapore that falls under this exempted regime is a simple procedure and investors who need additional information and assistance can reach out to our agents.
The advantages of the EPC in Singapore
The private exempt limited liability company has the following advantages:
- High tax exemption: the EPC is subject to a tax exemption on the first 100,000 SGD in each of the first three years of operation.
- Reduced compliance requirements: this company does not need to file accounts with the Registrar of Companies.
- Foreign ownership: foreign investors can own 100% of the shares in a private exempt limited liability company.
- No capital: there is no requirement for the company’s minimum share capital – only 1 SGD is needed.
- Flexibility: this is in terms of business loans, where EPCs enjoy a greater degree of using the capital as per their business needs.
This form of a private limited company in Singapore needs to submit the annual return within one month after is has held the Annual General Meeting. EPCs that have an annual turnover of less than 10 million SGD (and are solvent) are exempt from the requirements for an annual audit and annual accounts submission. However, investors should know that they are required to maintain the Singapore Financial Reporting Standards and will need to prepare the annual financial statements according to the Companies Act. For investment holding companies, this tax exemption is not applicable. Investors can reach out to our agents for more information.
Understandably, these characteristics make the EPC a very coveted business form. Investors who choose to open a Singapore limited company will usually choose this business form.
Conditions for the EPC in Singapore
Investors interested in setting up a private limited company in Singapore that is subject to the exempt principles need to follow a few general requirements that also apply to the LLC in general. These are:
- Management: the company is required to have at least one shareholder and one director.
- Residency: a company director needs to be a resident (can be a permanent resident, a citizen or an individual with an employment pass).
- Secretary: as part of the mandatory conditions, the EPC in Singapore will have one company secretary (which cannot be a corporate secretary).
- Office: also a mandatory requirement, the EPC needs to have a registered office in Singapore (a physical address).
- Maximum shareholder: the private company is required to have no more than 20 shareholders; beyond this number, it becomes a public company.
The EPC is a separate legal entity from its founders and they are not liable for the company’s debts and obligations beyond the amount they have contributed to the capital.
The general incorporation steps, starting with choosing a valid company name as well as preparing the company’s Articles of Association is the same for the EPC, the public company and the private limited company in Singapore. The time needed to open this type of company is usually one or two days.
Our agents who specialize in company formation in Singapore can help investors open this particular business form and understand the complete tax exemptions the EPC is subject to.
According to the Singapore Department of Statistics, foreign direct investment in Singapore had a value of 1,567,974 million SGD, a 15.7% year-on-year increase compared to 2016. As far as the corporate sector is concerned, the data is as follows:
- the financial and insurance sector is the largest one by total assets: 5,804.1 billion SGD in 2017.
- the wholesale and trade sector had a value of 860.9 billion total assets in 2017.
- the real estate sector was in third place in 2017 in terms of total assets, with 413.0 billion SGD.
Foreign investors can also explore the business opportunities in other business sectors such as manufacturing and other business services as well as transport and storage. The private exempt limited liability company can be a suitable business form given its attractive taxation regime for the first years of functioning.
Contact our agents if you wish to register a private limited company in Singapore as well as an EPC or another business form.