Unlike some other countries in ASEAN, you can incorporate a Singapore company with 100% foreign ownership in Singapore. As an open economy, the procedure of company setup in Singapore has been streamlined to make the cost of company setup more affordable in Singapore. Aside from the efficiency in setting up a Singapore company, you are set to benefit from low tax regime and pro-business regulation in Singapore that are beneficial to foreign business community. In fact, due to the perks of incorporating a Singapore companies, many multi-national corporations have setup an Asia Headquarter in Singapore. Before you proceed with setting up an entity in Singapore, it is important for you to understand different types of business entity and select that one that is the most beneficial for you. Read further to learn more.
Company setup options in Singapore
Which entity structure is more suitable for you?
As an entrepreneurs or business owners, choosing the right business entity structure will impact greatly on the control of the company and the amount of corporate tax that your company would pay in Singapore. For example, if you are an accounting or legal firm, you are only allowed to setup a limited liability partnership instead of a private limited entity. See below for different options.
Private Limited Company:
Private Limited is considered to be the most common entity structure in Singapore. This entity is suitable for those who are looking at individual shareholder structure and you can have as many as 50 individual shareholders in the company. The minimum paid-up capital is 1 SGD and this structure provides the most flexibility and best tax regime.
Singapore Subsidiary office:
This company structure is suitable for foreign companies that want to keep the Singapore entity as a separate legally entity. The Singapore office will also be treated as a tax resident of Singapore paying local corporate tax rate. However, the local director has absolute control of the company in this type of legal structure.
Singapore Representative Office:
This is an entity with a temporary nature and you are required to extend the representative office on a yearly basis but no tax reporting is required. This type of entity can only serve as an expense centre for testing your products and services in Singapore. Additionally, no revenue can be generated under this structure. Only for those company who are looking for a temporary structure to test out the market demand for their product or services.
Singapore Branch Office:
This type of company structure is more suitable for foreign companies who would like to repatriate all the company’s revenues back to the overseas headquarter and have more control in the local Singapore entity. However, the key disadvantage of this type of structure is that the Singapore entity is treated as the same legal entity as the foreign headquarter and the corporation in Singapore is regard as a non-tax resident of Singapore.
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No. unless you have a local director and a Singapore address. However, due to other compliance issues under the company act, it is always better to engage a professional agency to setup your company in Singapore.
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