Singapore is one of the countries in the world that is famous for ease of doing business, attractive corporate tax framework, robust IP protection, strategic geographical location, and strategic geographical location with proximity to the largest emerging markets. However, if you want to know how to incorporate a company in Singapore, continue to read this article:
Choose the company address and name.
Before establishing a company in Singapore, the Accounting and Corporate Regulatory Authority (ACRA) must first approve your proposed name. You will receive the notification for the name rejection or approval in less than one hour unless it has words relating to media, law, finance, or bank that might need the associated authority’s approval and review. To enhance your chances of approval, ensure your proposed name:
- Is not reserved
- Is not vulgar or obscene
- Does not infringe the trademarks
- Is not identical to other existing local business name
When the name is approved, it will remain reserved for 60 days.
Establish the company’s constitution
The constitution is a legal document that highlights the regulation on the internal governing of the company, shareholder relations and rights, its structure, and other critical regulations. Professional attorneys will review this document during the incorporation process.
Appoint the company’s shareholders and directors
Every registered company in Singapore needs a minimum of one local director. That person might hold an employment pass holder, Entrepass holder, or be a Singaporean. The company might appoint other directors. However, the director should be above 18 years and should not have been convicted of any crime (including dishonesty or fraud). Every company should have a maximum of 50 and a minimum of one shareholder. Singapore companies might have 100 percent foreign or local ownership.
Decide the shareholding structure
Ordinary shares
They carry one voting right, and every shareholder will equally receive the dividends. When the organization is liquidated or closed down, the ordinary shareholders are entitled to the company’s residual assets.
Non-voting shares
Under the non-voting share, the shareholders lack voting rights and cannot participate in annual general meetings. They are typically issued to employees and family members.
Redeemable shares
They are issued based on the terms and conditions that the organization in the future will or might buy them back at a certain date. Therefore, shareholders are supposed to sell their share back to the organization when the due date comes.
Preference shares
Shareholders who hold preference shares are entitled to fixed dividends, and they normally receive payments before ordinary shareholders. In most cases, these shareholders do not have voting rights.
Management shares
Directors of an organization normally hold them, and the shareholders have voting rights. This share might have up to 10 votes for every shareholder based on the agreement.
Choosing Business activities
During company incorporation in Singapore, the authorities will request you to choose and submit a Singapore Standard Industrial Classification ( SSIC) code. That code identified your business entity as a tuition center, restaurant, boutique, or pharmacy. In this case, you might choose two critical business activities you will engage in.
License application when necessary
If you engage in a business that requires you to have a license, you will only be allowed to register your company after obtaining the appropriate license.
Appointing a company secretary
The Singapore Companies Act states that every company should appoint a professional company secretary in less than six months of incorporation. Also, the company secretary’s office cannot be left vacant for more than six months.
The company secretary will help hold the annual AGM, file annual returns, and organize board meetings to pass other resolutions. However, the secretary should meet the required qualifications, not be a sole director, and be a resident in Singapore