Doing business in Singapore

How quickly can I set up a business?

1 day

What is the minimum investment needed?

S$1

How can I raise finance?

A newly incorporated company is typically funded by its share capital.

Local Banks typically require a 2-year track record before considering extending loans.

The Singapore government provides various support schemes for businesses which are within its support framework.

https://www.businessgrants.gov.sg/

What are the legal requirements for setting up my business?

Any person can set up business through the Accounting and Corporate Regulatory Authority website. Incorporations of companies and branches are typically handled by a professional.

Type of legal structure for businesses, refer to https://www.acra.gov.sg/

For set up of representative offices

https://www.enterprisesg.gov.sg/e-services/representative-office/representative-office

What structure should I consider?

Typical for-profit business – set up a company.

Foreign company that do not want a separate legal entity – set up a branch.

Not for profit organisation – Company limited by guarantee.

Fund Company – Limited partnership.

Professional firm – Limited liability partnership.

The above are registered through the Accounting and Corporate Regulatory Authority of Singapore https://www.acra.gov.sg/

Foreign company that wants to understand the local market before setting up – Representative office registered with Enterprise Singapore.

https://www.enterprisesg.gov.sg/e-services/representative-office/representative-office

What advice can you give me in regards to payroll and taxation requirements?

Payroll and HR requirement

Foreigners working in Singapore have to apply for a work pass.  Application can be made:

https://www.mom.gov.sg/passes-and-permits

Mandatory Central Provident Fund is contributable for local employees (i.e. permanent resident and citizen).

https://www.cpf.gov.sg/employers

All entities with employees working in Singapore (foreign or local, permanent, part-time, casual or temporary basis) are required to contribute monthly Skills Development levy for all employees at 0.25% of the employees’ salary or a minimum of S$2, capped at S$11.25.

Tax you need to know

For businesses:

Corporate income tax – Companies

Companies are subject to corporate income tax is at 17% currently and is on preceding year basis. Companies are required to file its estimated chargeable income within 3 months from its financial year and annual tax filing is on or before 30 November after the financial year end of the company.

Tax on other business structure – sole-proprietorships and partnerships

The owners of businesses are taxed based on personal income tax rates.

https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Income-Tax-Rates/

Goods and services tax

Businesses with taxable supply exceeding S$1 million (retrospectively or prospectively) are required to register as a a goods and services tax trader. For businesses with taxable supply of less than S$1 million, they can apply for registration voluntarily.

https://www.iras.gov.sg/IRASHome/GST/Non-GST-registered-businesses/Registering-for-GST/Do-I-Need-to-Register-for-GST/

A business in Singapore or outside Singapore is also liable for registration under the Reverse charge and overseas vendor registration

https://www.iras.gov.sg/irashome/GST/GST-registered-businesses/GST-and-Digital-Economy/GST-on-Imported-Services/

Withholding tax

Certain payments to non-resident companies are subject to withholding tax.

https://www.iras.gov.sg/irashome/Other-Taxes/Withholding-Tax/

The withholding tax rate may be waived or reduced under the Tax treaty.

The list of countries that have tax treaty with Singapore can be found

https://www.iras.gov.sg/irashome/Quick-Links/International-Tax/List-of-DTAs–limited-treaties-and-EOI-arrangements/

Transfer pricing

Under the Income Tax Act, tax payer who met either the following condition is required to prepare Transfer Pricing Documentation before the filing due date of the tax return:

1. Gross revenue derived from their trade or business is more than S$10 million for the basis period concerned; or
2. Transfer pricing documentation was required to be prepared for the basis period immediately before the basis period concerned.

As employer:

Reporting employee earnings

Employers are required by law to prepare Form IR8A and Appendix 8A, Appendix 8B or Form IR8S (where applicable) for employees who are employed in Singapore by 1 March each year.

For employers with 5 or more employees, it is compulsory to file the employment income information under the Auto-Inclusion Scheme.

Tax clearance Foreign and Singapore Permanent Resident Employees

Generally, when your non-Singapore Citizen employee ceases employment with you in Singapore, goes on an overseas posting or plans to leave Singapore for more than three months, employer is required to seek tax clearance for him. Employer is responsible to file the Form IR21 and withhold all monies due to the employee for tax clearance purpose.

Other regulatory reporting

Company secretary

A company must appoint a secretary within 6 months from its date of incorporation. The position of company secretary cannot be left vacant for more than 6 months. Sole director of a company and the company secretary cannot be the same person

Auditors

Every company must appoint an auditor within 3 months of incorporation, unless it is exempted from audit under the Companies Act.

The audit exemption information can be found:

https://www.acra.gov.sg/legislation/legislative-reform/companies-act-reform/companies-amendment-act-2014/two-phase-implementation-of-companies-amendment-act-2014/more-details-on-small-company-concept-for-audit-exemption

Annual affairs

Companies, unless exempted, are required to hold an Annual General Meeting.

All companies must file their annual return within 7 months after the closing of the financial year end.

Is there anything else that I should know?

Corppass

To perform transactions on government agencies website, entities have to register for a Corppass.

Corppass is the authorisation system for entities to manage digital service access of employees who need to perform corporate transactions. Individuals who need to transact in a business capacity with the government are required to be UEN-registered to be eligible for Corppass.

Every new businesses will be issued a system-generated Unique Entity Number (“UEN”), which is required when transacting with government agencies.