Singapore is widely recognized as one of the best places in the world to start and run a business. Its strategic location in Southeast Asia, business-friendly policies, and strong legal framework make it an attractive destination for entrepreneurs and investors. Setting up a Limited Liability Company in Singapore is a straightforward process, and this guide will walk you through each step, ensuring you have all the necessary information to get started.
Why Choose Singapore for Your LLC?
Before diving into the setup process, it’s important to understand why Singapore is an ideal location for your business:
- Favorable Tax Regime: Singapore offers a low corporate tax rate, currently capped at 17%, with additional tax incentives for startups and small to medium-sized enterprises (SMEs).
- Political and Economic Stability: The country’s stable political environment and strong economy provide a secure foundation for businesses.
- World-Class Infrastructure: Singapore’s advanced infrastructure, including transportation, telecommunications, and financial services, supports efficient business operations.
- Access to Global Markets: As a global trade hub, Singapore provides excellent connectivity to major markets around the world.
- Ease of Doing Business: Consistently ranked among the top countries for ease of doing business, Singapore has a streamlined process for company incorporation and regulatory compliance.
Step-by-Step Guide to Setting Up an LLC in Singapore
Step 1: Choose a Company Name
Selecting a unique and appropriate name for your LLC is the first step in the incorporation process. Here are the guidelines:
- Uniqueness: The name must not be identical or too similar to any existing company name in Singapore.
- Non-Restricted Words: Certain words, like “bank,” “finance,” “education,” and “law,” require special approval from the relevant authorities.
- No Offensive Terms: The name should not contain any obscene or offensive language.
You can check the availability of your desired company name using the Accounting and Corporate Regulatory Authority (ACRA) online tool. Once you’ve confirmed availability, you can reserve the name for 60 days, with the option to extend for another 60 days.
Step 2: Appoint Directors
An LLC in Singapore must have at least one director who is a resident of Singapore. This can be a Singapore citizen, a permanent resident, or someone holding an EntrePass, Employment Pass, or Dependent Pass. Directors must meet the following criteria:
- At least 18 years old.
- Not disqualified under the Companies Act, which includes being undischarged bankrupts or individuals convicted of fraud or dishonesty.
There is no limit to the number of additional local or foreign directors you can appoint.
Step 3: Appoint a Company Secretary
Within six months of incorporation, your LLC must appoint a qualified company secretary. The company secretary must be:
- A natural person residing in Singapore.
- Knowledgeable about Singapore’s compliance requirements, ensuring that your company adheres to all statutory obligations.
The role of the company secretary includes maintaining statutory registers, filing annual returns, and ensuring compliance with ACRA’s regulations.
Step 4: Determine Your Shareholders
An LLC in Singapore can have between 1 to 50 shareholders. Shareholders can be individuals or corporate entities, and they may be residents or non-residents of Singapore. During incorporation, you will need to provide details of the initial shareholders and their shareholdings. Shares can be transferred or issued after incorporation, subject to approval from the company’s board of directors.
Step 5: Register the Address
Your company must have a registered office address in Singapore. This address must be:
- A physical location (not a PO Box).
- Operational during normal business hours.
The registered office is where all official correspondence and legal documents will be sent.
Step 6: Prepare the Required Documents
The following documents are necessary for the incorporation process:
- Company Constitution: This document outlines the rules governing the company’s operations. You can use a standard constitution template provided by ACRA or draft your own.
- Director’s and Shareholders’ Particulars: This includes personal details, identification, and residential addresses.
- Registered Office Address: Proof of the company’s registered office address in Singapore.
Step 7: File for Incorporation with ACRA
You can file your incorporation application online through ACRA’s BizFile+ portal. The process involves:
- Submitting the necessary documents.
- Paying the incorporation fee, which is SGD 300 for standard processing.
Once submitted, ACRA typically processes the incorporation within one to three business days. You will receive an email notification confirming your company’s incorporation along with an electronic certificate of incorporation.
Step 8: Obtain the Necessary Licenses and Permits
Depending on your business activities, you may need to obtain specific licenses and permits. For instance, if you are setting up a restaurant, you will need a food shop license. You can check the requirements through the GoBusiness Licensing portal, which provides a comprehensive list of business activities and the corresponding licenses.
Step 9: Open a Corporate Bank Account
After incorporation, it is essential to open a corporate bank account in Singapore. Most banks require the following documents:
- Certificate of Incorporation.
- Company Constitution.
- Resolution of the Board of Directors authorizing the opening of the account.
- Proof of identity and residential address of the directors and signatories.
Popular banks in Singapore for corporate accounts include DBS, OCBC, UOB, HSBC, and Standard Chartered.
Step 10: Comply with Ongoing Regulatory Requirements
Once your LLC is set up, it is crucial to ensure ongoing compliance with Singapore’s regulatory requirements:
- Annual General Meeting (AGM): Your company must hold an AGM within six months after the end of its financial year. During the AGM, the company’s financial statements are presented to the shareholders.
- Annual Returns: File annual returns with ACRA within seven months after the financial year-end. This includes financial statements and other required documents.
- Tax Filings: File corporate tax returns with the Inland Revenue Authority of Singapore (IRAS). The corporate tax return must be submitted by November 30 each year.
Additional Considerations
- GST Registration: If your company’s annual taxable turnover exceeds SGD 1 million, you must register for Goods and Services Tax (GST). Voluntary registration is also available for businesses below this threshold.
- Employment Passes: If you intend to hire foreign employees, you will need to apply for Employment Passes (EP) or S Passes through the Ministry of Manpower.
Conclusion
Setting up an LLC in Singapore is a streamlined and efficient process, thanks to the country’s pro-business environment and robust regulatory framework. By following the steps outlined in this guide, you can establish your LLC and take advantage of Singapore’s vibrant business ecosystem. Whether you are a local entrepreneur or an international investor, Singapore offers numerous opportunities for business growth and success.
