How to Register a Company in Singapore for Foreigners?
Singapore, often called the Switzerland of Asia, is very well known to the world as one of the top-notch financial hubs with its surging economy for starting a business and registering a company in Singapore for foreigners. Highly urbanised, Singapore attracts foreign investors with its strong currency, vibrant investment climate, government-backed business environment as well as almost corruption-free political reputation.
According to the latest business environment rankings by EIU for the second quarter of 2023, Singapore has maintained its top spot as the best place for business over the next five years. The Singaporean government has always adopted a pro-business policy like reducing corporate tax rates as well as introducing attractive tax incentives to boost the country’s economic performance. This guide provides information on company registration and how to start a business in Singapore for foreigners.
Singapore has gained its traction as one of the most-preferred investment hotspots in Asia as well as the world and is full of startup business ideas for registered companies in Singapore for foreigners. Many foreigners prefer Singapore over other countries to start their business (or work) in the country. However, starting a business in Singapore has more to do than just having a good business plan, startup business ideas and the sufficient funds. When it comes to starting a business in the country, foreign investors should remember and oblige the proper protocols to avoid any unwanted run-ins with the law. Hence, it is necessary for foreigners to have a guideline about the ins and outs of doing business in Singapore and how to start a business in Singapore.
How to register a company in singapore?
A foreigner looking to establish a company in Singapore has three potential pathways to choose from:
1. Apply for an Employment Pass (E Pass) and Entrepreneur Pass (EntrePass)
An Employment Pass or Entrepreneur Pass from the Ministry of Manpower (MOM) is compulsory for a foreigner who would like to be present in Singapore to manage their business operations.
Certain basic requirements include:
- The business must be legal: the company must be registered as a Private Limited Company
- The company needs to have at least SGD$50,000 of paid-up capital.
Please note that businesses like food courts, massage parlours, employment agencies and so forth do not meet the basic requirements for the application of an EntrePass. Although the E Pass and EntrePass are meant for foreign professionals and entrepreneurs, there are some differences between these two passes based on the applicant’s requirements and needs.
A valid Employment Pass or EntrePass is not required if a foreigner does not intend to stay in Singapore to administer their company. However, it is mandatory to appoint at least one local resident director at the point of incorporation. In this case, one must appoint the services of a professional to file the application online.
2. Get a SingPass (Singapore Personal Access)
In Singapore, one is eligible to apply for a SingPass (“SingPass” stands for “Singapore Personal Access”, it is a pass that enables Singapore residents to access and perform online transactions with more than 200 e-government services) if they are included in one of these groups:
- Singapore Citizen and Permanent Resident
- Employment Pass and Personalised Employment Pass holders
- EntrePass holders
- S-Pass holders
- Dependant Pass holders (EP, PEP, EntrePass and S-Pass holders)
Also, they will be able to carry out the required endorsements via BizFile (BizFile is ACRA (Accounting and Corporate Regulatory Authority)‘s online filing system).
How to start a company in Singapore?
Foreigners looking to establish a company in Singapore have various business entity options to choose from, depending on the method they prefer. Below, we explore these options:
Foreigners are eligible to register for sole-proprietorships in Singapore and start a business, that they just need to appoint an authorised representative (who is ordinarily resident in Singapore) while residing outside of Singapore. Ordinary residents here mean Singapore citizens, Permanent Residents and EntrePass holders (one will need to apply for an EntrePass on the MOM website to set up his or her sole-proprietorship if he or she will reside in Singapore and run the business).
The other registration processes include naming the business, deciding the business location and address, as well as completing the entire form on BizFile using SingPass (one will have to engage the services of a registered filing agent such as a law firm to fill out the application for him or her if he or she does not have a SingPass).
2. Partnership
Foreigners can also register partnerships in Singapore if one of the partners is ordinarily a resident of Singapore. In the case that all partners are foreigners, the appointment of an authorised representative (who is ordinarily resident in Singapore) is required for the company registration.
For foreigners, setting up a company in Singapore involves some tedious and time-consuming processes. However, it is still easy if compared with its peers.
To sum up how to start a business, there are 2 types situations when a foreigner wishes to setup a company in Singapore:
a) Foreign companies wishing to set up in Singapore
Any foreign company wishes to setup a company in Singapore, there are 3 business types available: a branch office, a subsidiary and a representative office.
b) Foreigners wishing to setup a local company in Singapore
If a foreigner is setting up a local company in Singapore, the incorporation process is the same as that for a locally incorporated company, just that he or she needs to appoint a local resident director (who is ordinarily resident in Singapore) whilst he or she resides outside of Singapore. Also, an EntrePass with MOM is a must if he or she wishes to reside in Singapore to administer the company’s operations.
On a final note, Singapore is definitely one of the investment hotspots in Asia where foreigners can do business easily in this country. If you are planning to venture into Singapore’s market, 3E Accounting is able to assist you in the company incorporation with additional steps such as appointing a nominee director, applying for an Employment Pass or EntrePass, understanding how to start a business and how to do small business so that you can be in Singapore to manage the business yourselves.
