By Globalization Partners
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Why do business in Singapore? Expanding your business to Singapore has numerous financial advantages. Singapore is famous internationally for its incredibly business-friendly environment, including low taxes, a centralized location with access to huge Asian markets, and the possibility of retaining 100 percent ownership of the new branch.
If you want to expand your company to Singapore, you’ll need to take the correct formal steps to make your enterprise legal. If you are considering a subsidiary-based entity, foreign company registration in Singapore can be a convoluted, expensive, and lengthy process. You’ll need a confident grasp of the details before you begin.
Options for how to expand a company to Singapore
When your company is ready to expand to Singapore, you have two main options: You can set up a subsidiary or work with an organization like an Employer of Record (EOR). If you work with an EOR, the process will likely be much faster, more straightforward, and more economical. However, some companies choose to set up a subsidiary because they are more familiar with this traditional option.
To get started with a conventional subsidiary-based option, your company will need to collect information about topics like taxes and labor laws. You should also research hiring requirements and understand how your company must handle essential aspects of employment, including:
- Contract structure and requirements
- Standard wages
- Paid vacation and holidays
- Notice requirements
- Termination restrictions
Before taking on these tasks, though, you’ll need to incorporate and register your business officially. These steps are necessary so your company can do business legally in Singapore.
One of the first steps toward establishing a company in Singapore is deciding how it will incorporate. Generally, you should incorporate as soon as you’ve decided to do business in Singapore. Here are some of the benefits of early incorporation:
- Name protection: You’ll be able to register the name as a formal trademark and protect it against unauthorized use.
- Ability to sign legal agreements: Official incorporation enables your company to enter into binding legal transactions.
- Intellectual property ownership: Your company must incorporate before it can claim the rights to its intellectual property in Singapore. Formal incorporation makes resolving disputes about intellectual asset ownership much easier.
- Equity ownership: Early incorporation also allows your company to claim a larger portion of equity before value begins to accrue. Late incorporation, on the other hand, will diminish the amount of equity the owners may receive.
- Easier fundraising: Banks and other lenders will find your company much more appealing as a customer once it has officially incorporated. Investors, too, will generally invest only in incorporated businesses.
What are the requirements of business formation in Singapore?
Establishing a business subsidiary in Singapore can be a complex, labor-intensive endeavor. These are some of the steps your company will need to complete.
1. Reserve your company name and physical address
Singapore company registration starts with formalizing your business’s name and address. Reserving the company name generally has three primary components:
- Choosing a name: As you select your business name, you’ll need to meet a few requirements. The name must be unique, it must not be obscene or offensive, and it must not be a name expressly prohibited by the Minister for Finance. Once you’ve met those criteria, you can register the name legally.
- Registering the name: Your company must then record the chosen name via the Accounting and Corporate Regulatory Authority (ACRA), through the electronic filing and information retrieval system known as BizFile+. After you register, the name will remain reserved for 120 days. If you do not register and incorporate the branch within that time frame, the registration expires, and the name becomes available for other entities to use. Some names require additional approval by the relevant authorities. A name indicating an educational facility needs approval from the Ministry of Education, for instance.
- Specifying business activities: Your company must declare the exact business activities that will take place under the registered name. You must identify both the primary and secondary business activities your branch will pursue, and you must indicate the Singapore Standard Industrial Classification (SSIC) that best represents each activity.
As you establish your new company location in Singapore, you’ll need to select a physical location and demonstrate your legal right to do business at that address. You must provide a physical address, rather than a P.O. box, to the ACRA with your registration.
2. Formalize your incorporation
As you establish your new company presence in Singapore, you must choose the structure your company will use to incorporate. Singapore has several incorporation types for international businesses:
- Sole proprietorship: Your company will likely avoid the sole proprietorship model unless your business consists of a single owner who does not wish to establish a separate entity. A sole proprietorship is easy to register, manage, and operate, but it has limited utility for larger companies.
- Partnership: Forming a partnership in Singapore requires at least two and no more than 20 individuals willing to serve as partners and owners of the company. The partnership is not a separate legal entity from the partners, and the partners have unlimited liability, so they are personally liable for any debts and losses the company incurs. A partnership requires annual renewals.
- Limited partnership: Forming a limited partnership in Singapore requires at least two partners, with at least one general and one limited partner and no maximum limit on the number of partners. It is not a separate legal entity, and the general partner has unlimited liability for the company’s debts and losses. The limited partner has limited liability. A limited partnership also requires annual renewals.
- Limited liability partnership (LLP): A limited liability partnership, or LLP, is a common model for international businesses expanding into Singapore. This model requires at least two partners with no maximum limit, and it stands apart as a separate legal entity. Therefore, the partners are liable for company debts and losses incurred only from their own actions — not those of the other partners. The LLP must make an annual declaration of solvency or insolvency.
3. Submit your business registration with BizFile+
When you’re registering your company in Singapore, you will first need to log in to the BizFile+ portal. From there, all the business partners must indicate their consent to register the company. Then your company can submit the official registration application to incorporate legally. As of 2021, the registration fee for a new business entity was 100 Singapore dollars, with an additional SG$15 required for the name registration. Each yearly renewal will then require an additional SG$30.
Alternatively, some companies choose legal or accounting experts to handle the registration process for them. A law firm, accounting firm, or corporate secretarial firm can submit the paperwork on the company’s behalf to save time and ensure regulatory compliance.
4. Obtain a unique entity number (UEN)
If your company incorporates as a limited liability partnership, it will receive a randomly assigned unique entity number (UEN). It will need to use that UEN for all transactions with Singapore’s government agencies.
Alternatively, your branch might elect to receive a special unique entity number (SUN). After registering for SUN services and paying the required fees, your company may select a desirable UEN from a small list of reserved numbers. These SUNs often contain strings of consecutive digits and other easy-to-remember patterns.
The advantage of obtaining a SUN is that business owners can easily identify and remember their own UENs. The high expenses of the SUN program, though — typically SG$1,000 to SG$3,000 — make this measure cost-prohibitive for many businesses.
5. Download your company business profile
Once you’ve registered your company branch, you become eligible to receive your official digital business profile from the ACRA. A company’s business profile typically contains information like this:
- Company name
- Registration number
- Incorporation date
- Principal activities
- Amount of capital paid
- Registered office address
- Partner and director details
Your branch will need this business profile to open a corporate bank account. It may also use the profile as supporting documentation for license and approval applications.
6. Open a bank account
Your company must establish a corporate account with an institution that has full bank status in Singapore. This account will allow your business to engage in legal business transactions in the country.
When you apply for your corporate bank account, your company will generally need to provide the following documentation:
- Completed and signed corporate bank account paperwork
- Proof of address
- Certified copy of the company’s business profile from the ACRA
- Official certificate of incorporation
- Certified copy of the company’s memorandum and articles of association
- Resolution from the board of directors to permit opening the account
- Certified copies of director passports or SingPasses
- For offshore accounts, official certificates of incumbency and good standing
7. Obtain a CorpPass
CorpPass is a corporate digital identity that allows your company to perform transactions like filing taxes, applying for licenses, and generally interacting with the Singaporean government when necessary. Using CorpPass also helps your company eliminate paperwork and ensure cybersecurity in its dealings with the government.
To register for a CorpPass, your business will need to provide the following information:
- Company UEN
- Business registration documents
- CorpPass admin ID
Once you have prepared the registration documents, an authorized individual can register as a CorpPass administrator on the CorpPass website. From there, that person can create accounts, delegate roles, and sign up for the requisite digital services.
8. Apply for licenses and approvals
Once your company has registered formally, it may also require approvals and licensure specific to your industry. For these, you will need to liaise with the appropriate government agency.
For instance, if your company is a food service business, you might pursue a food shop license, food stall license, liquor license, or halal certificate, among many other options. Animal or veterinary services, for example, might pursue a license for animal exhibition, a certificate of freedom from disease within Singapore, a license for a veterinary center, or a license to possess veterinary biologics.
9. Sign up for Central Provident Fund contributions
Your company will need to work with an insurance agency to sign up to contribute to the Central Provident Fund (CPF). You must complete this step before you begin recruiting and hiring since you will need to contribute to this fund on behalf of your employees every month. You’ll need to apply online with your UEN and CorpPass information to establish your contribution processes.
Once the authorities have approved your application, you’ll receive these essential items:
- CPF submission number (CSN)
- Application for a General Interbank Recurring Order (GIRO)
- Payment advice through Form CPF91
Knowing your CSN is critical because this number allows your company to pay your CPF contributions and otherwise engage in transactions with the official CPF board.
How Globalization Partners can help
If your company is like many, the steps outlined above are incompatible with your need for cost-effectiveness, speed, and efficiency. If you choose to establish a subsidiary, you won’t be able to begin operations for weeks or months, and you could pay hundreds or thousands of dollars in fees.
Working with an EOR like Globalization Partners offers an ideal solution. As a global EOR, we have sophisticated tools at our disposal to help you create and manage your new teams. We also have the in-country experience and expertise to help you navigate the ins and outs of complex regulations.
Here are a few of the specific benefits we can offer when you are ready to expand your business into Singapore:
- Quick, efficient operations: Globalization Partners already has a business entity established in Singapore. When you work with us, you’ll get your operations running quickly because you can eliminate the time-consuming registration and establishment steps of the process.
- Streamlined team building: When you’re expanding into a new country, hiring and retaining talented people who bring value to your organization and help you navigate cultural challenges is essential. A global EOR like Globalization Partners gives you the sophisticated platform you need to recruit, onboard, and manage your employees effectively with just a few clicks.
- Ensured compliance: Our trusted experts in each country are familiar with the maze of regulatory requirements necessary for business operations. When you work with us, our knowledge and experience keep your company compliant with the law.
- Outstanding value: The fees associated with establishing a subsidiary can quickly drain a company’s budget. Working with us enables you to bypass those fees and conserve funds to invest in your core business needs.
Simplify international expansion with Globalization Partners
Now that you know more about how to register a company in Singapore, you can make an informed decision for your business and its objectives.
When your company is ready to expand into Singapore, Globalization Partners is here to help you build your international teams. Our fully automated, AI-driven technological solution enables us to take on the legal, human resources, and administrative work of recruiting and managing your teams so you can get back to focusing on your higher-level business challenges.