What foreigners must know about setting up a company in Singapore

Singapore has emerged as one of the attractive economies of the Asian continent over the past two decades. The country has experienced massive growth in terms of infrastructure, healthcare, education, and other core sectors. Continued government support to build investor-friendly policies and a balanced legal ecosystem has attracted aspiring and interested entrepreneurs from all around the globe.

Many foreign nationals and companies are considering setting up their businesses in Singapore, and MNCs as well who plan on setting up their regional offices in this country. However, there is a full-fledged compliance list that needs to be followed while setting up company in Singapore by foreigner. Adherence to this will not only ensure a smooth flow of operations in setting up a firm but also help in securing a legal business that cannot be questioned by authorities in the future.

Deciding on the Right Business Structure

The first and most important decision that an individual has to make while setting up a company in Singapore is to choose the right structure for the business. Here, it is worth mentioning that establishing a Private Limited company is the first choice of any foreign national in this regard. There are several other structures that one can choose as well.

The first option here can be to set up a branch office, which is generally applicable for companies that are planning to expand in Singapore. They can also decide to set up representative offices, which are ideally meant to conduct market research and various kinds of liaison activities. Last but not least, an individual can also go for a sole proprietorship or partnership company, which is provided to only the person who has a valid work pass in Singapore.

Appointing a Resident Director (RD)

After deciding on the required business structure, next is to choose a nominee director who is either a Singapore Citizen, Permanent Resident, or ONE Pass holder in Singapore. According to the Singapore Companies Act, every company has at least one director who is a resident of the country. This is an important step for an entrepreneur while setting up a company in Singapore. This is primarily to ensure complete legal accountability and is compulsory for all foreign-owned companies. After the company is registered, it can register an account for Employment Pass (EP) applications. If its foreign employee obtains an EP, he/she can also act as the resident director of the employing entity. A Letter of Content (LOC) has to be obtained in order for the same EP holder to act as Resident Director of related companies.

Establishing a Registered Address

In Singapore, it is mandatory for all companies to have a permanent registered address in the country. This rule has been set by the government for a number of reasons. Firstly, it is compulsory for a company to have an address under the Singapore Companies Act. Any communication or visits by government officials need to be done at this address, which includes legal notices, compliance notifications from the Accounting and Corporate Regulatory Authority, and others.

In case an individual is not physically available or unable to apply work permit Singapore, they can get in touch with service providers who provide virtual office solutions, which can easily meet the compliance requirements. The entire incorporation process can be completed remotely.

Read More: A Complete Guide to Corporate Services and Company Formation in Singapore

Appointment of Company Secretary

Within six months of setting up company in Singapore by foreigner, a company secretary must be appointed in order to adhere to local regulatory requirement. This is to ensure that a company has a primary point of contact in case of any legal and financial matters with the local company registry. A company secretary position serves a number of functions in ensuring smooth operations in a Singapore-based company.

The Company Secretary is responsible for ensuring the company meets all statutory deadlines and filing requirements with the company registry.

• Maintain Statutory Registers: The CoSec is legally responsible for keeping and updating the company's mandatory registers, such as the Register of Directors, Register of Members (Shareholders), Register of Charges, and the Register of Controllers (ROC) and others.

• Registry Filings: Prepare and file necessary forms and documents with ACRA for changes to the company's particulars (e.g., changes in directors, secretaries, registered address, share capital).

• Annual Filing: Ensure the timely preparation and filing of the Annual Return with the registry, which confirms that the company's statutory records are up-to-date.

Compliance with Companies Act: Advise the Board of Directors on their obligations under the Companies Act and common law, ensuring all decisions and actions comply with the company's Memorandum and Articles of Association.

Concluding Remarks

The growing business ecosystem of Singapore is becoming home to many successful businesses. This is the reason why understanding all the compliance requirements has become crucial for all interested entrepreneurs looking to set up businesses in this country. Conforming to these requirements will ensure that a company is on the right side of the law. Entrepreneurs will also be able to navigate the business landscape in a proper way and achieve long-term success in this rapidly growing country.