Overview

Company Registration Requirements

3. At least one (1) qualified company secretary to be appointed within six (6) months of incorporation.
4. A minimum paid-up capital of S$1/- (additional capital injection can be performed at a later time).
5. To have a local registered address in Singapore where the company will keep all of its statutory documents (P.O. box addresses are not permitted).
6. To have the proposed name of the company to be approved by ACRA.

Advantages of Setting Up a Private Limited Company

Disadvantages of Setting Up a Private Limited Company

There are several disadvantages of a private limited company as follows (not limited to):
1. Must maintain an on-going compliance with respective government bodies (eg. ACRA / IRAS) on an annual basis.
2. Higher administration/operating costs due to annual reporting and statutory requirements.
3. Disclosure requirements of directors.

Overview

Overview

A limited liability partnership (LLP) that is incorporated in Singapore is a separate legal entity from its owners (partners) whilst it gives partners the flexibility of operating as a partnership. In addition, partners of the LLP will commonly enter into a partnership agreement of which will spell out their respective partnership rights and duties as follows (not limited to):

1. Overall structure of the LLP;
2. Authority and powers of respective partners;
3. Duties and conduct of partners;
4. Salary and capital contribution of partners;
5. Financial performance of the LLP;
6. Restriction on transfer of interest;
7. Withdrawal or death of partners;
8. Non-compete clause; and
9. Basis of termination of agreement.

In connection with the above, a LLP do not have any requirement for issuance of shares or paid-up capital, but instead, partners contribute to the capital of the LLP, subject to the terms and conditions under the partnership agreement (if any); in addition with the provisions of the Limited Liability Partnerships Act, Cap. 163A of Singapore.

LLP Registration Requirements

To incorporate a limited liability partnership in Singapore, the following requirements must be fulfilled:
1. At least two (2) partners (eg. any local or foreign individuals/entities, or another LLP).
2. At least one (1) manager (eg. Singapore citizen, Permanent Resident, or an Employment Pass holder), that is a natural person and at least 18 years old of age (any one (1) partner who is locally residing in Singapore can also be appointed as a manager).
3. To have a local registered address in Singapore where the company will keep all of its statutory documents (P.O. box addresses are not permitted).
4. To have the proposed name of the company to be approved by ACRA.

Advantages of Setting Up a Limited Liability Partnership

Disadvantages of Setting Up a Limited Liability Partnership

Overview

Foreign companies are finding it increasingly attractive to operate and expand its business operations in Singapore, some of which is due to Singapore’s political stability, modern facility and infrastructure, tax incentives and its strategic location in Southeast Asia. As such, there are several formation options as follows:

1. Subsidiary Company;
2. Branch Office; or
3. Representative Office.

1. Subsidiary Company

A subsidiary company incorporated in Singapore can be referred as to a private limited company where a foreign company (holding company) holds a majority of issued shares (or wholly) in the subsidiary company. Similarly to a private limited company, a subsidiary company will have a legal status of a separate legal entity where its shareholders’ liabilities are limited up to the amount that was invested by respective shareholders of the company.

Therefore, a subsidiary company has similar characteristics and start-up requirements of a private limited company, hence most foreign companies will see this as a favourable option rather than a branch office due to the limited liability protection and its eligibility for tax exemptions. Therefore, the foreign company can see this as a Singapore offshore company.

2. Branch Office

A branch office in Singapore can be seen as an extension of the foreign company, and therefore, a branch office cannot be seen as a resident entity, and certainly does not carry a legal status of a separate legal entity unlike a private limited company. In other words, the foreign company (head office) will be legally responsible for the act or omission of the branch office.

Additionally, a branch office also conducts their business activity within the scope of their foreign company, while it is a statutory requirement to file its annual audited accounts of its head office and its branch offices in Singapore, unless an application is made with ACRA on the exemption/waiver of financial reporting.

Registration Requirements

1. At least one (1) authorized representative who is ordinarily residing in Singapore (eg. Singapore citizen, Permanent Resident, or an Entrepass holder), that is a natural person and at least 18 years old of age.
2. To have a local registered address in Singapore where the company will keep all of its statutory documents (P.O. box addresses are not permitted).
3. The name of the branch office in Singapore should be similar to the name of its foreign company (head office), and that such name of the branch office is to be approved by ACRA.

Therefore, we should also provide ACRA by submitting the following documents and information (not limited to):

• Name and registered office of the foreign company in its place of incorporation;
• Certified copy of the foreign company’s certificate of incorporation;
• Certified copy of the foreign company’s constitution/charter/by-laws;
• Notice of the foreign company’s registration number, business description and legal entity type;
• Particulars of the foreign company’s directors;
• Particulars of at least 1 Singapore resident who has been appointed to act as the branch company’s authorised representative;
• Statement of consent from the branch company’s authorised representative who has consented to their appointment;
• Particulars and opening hours of the branch office in Singapore; and
• The latest audited financial statements of the foreign company (if this is required under the laws of the place of incorporation).

3. Representative Office

Unlike a subsidiary company or a branch office, a representative office of a foreign company in Singapore focuses on a short-term goal, some of which is to assess its business potential, to perform feasibility studies, or to conduct market researches in Singapore. Additionally, there is no legal nor tax status for a representative office due to its temporary administrative arrangement of which has to be renewed annually, with a maximum period of three (3) years.

Therefore, a representative office will not be allowed to enter into contracts, engage in trading or any other profit-making activities; while its foreign company is also legally responsible for the acts and omissions of the representative office.

Registration Requirements

Overview

The following are the type of businesses that generally cost the least in terms of administration and the annual statutory requirements in comparison to a private limited company:

1. Sole Proprietorship; or
2. Partnership.

While a sole proprietorship / partnership may cost the least, there will still be a requirement to renew its business licenses annually or given a period of time until the license expires or cancelled (due to non-renewal). Additionally, all Singapore citizen and Permanent Residents are required to top up their Medisave* account with the Central Provident Fund (CPF).
*Medisave is a national saving scheme which helps CPF members to save for future medical expenses, especially after retirement.

Registration Requirements for Sole Proprietorship / Partnership

1. At least one (1) owner for a sole proprietorship; whereas for a partnership, at least two (2) owners or up to a maximum of twenty (20) partners* (eg. any local or foreign individuals/entities, or another LLP).
2. If only applicable, at least one (1) authorised representative** (eg. Singapore citizen, Permanent Resident, or an Entrepass holder), that is a natural person and at least 18 years old of age.
3. To have a local registered address in Singapore (P.O. box addresses are not permitted).
4. To have the proposed name of the business to be approved by ACRA.
*If there are more than twenty (20) partners, the partnership must incorporate as a company under the Companies Act, Cap. 50 of Singapore (except for professional partnerships).
**The authorised representative is required if the sole owner is residing outside of Singapore (for a sole proprietorship); or all the partners are residing outside of Singapore (for a partnership).

Advantages of Setting Up a Sole Proprietorship / Partnership

The following are several advantages to setting up a sole proprietorship / partnership (not limited to):
1. Generally lower in costs and cheaper in terms of administration and annual statutory requirements.
2. The owner(s) accrue all income generated by the sole proprietorship / partnership.
3. Ease of setting up and termination of sole proprietorship / partnership.
4. The owner(s) themselves have complete control over the business (including decision making).
5. Least compliance requirements unlike other type of entities.

Disadvantages of Setting Up a Sole Proprietorship / Partnership

The disadvantages of a sole proprietorship / partnership are as follows (not limited to):
1. It is not a separate legal entity (unlike a private limited company).
2. Unlimited liabilities and it may put respective owner’s personal assets at risks.
3. Owner(s) can be personally be sued in their own names.
4. Limited access to capital or investment.
5. No perpetual succession or continuity of a sole proprietorship when the sole owner dies; whereas for a partnership, it will continue to exist if the other partner agree to keep the partnership business.
6. No corporate tax benefits or incentives.
7. Lack of public perception where it has difficulty attracting a senior or high executive’s position and as a result, may also face difficulties on the expansion of business in a local or international platform.