Singapore Company Formation FAQs

Companies in Singapore are governed by the Companies Act (CAP 50 of the 1994 Revised Edition of the Singapore Statutes). In general, Singapore company law is based on principles established in England over the last century or so. The purpose of this particular guide is to provide answers to frequently asked questions on incorporating a private limited company in Singapore.

What are the different types of business entities in Singapore?

The common types of business entities for commercial purposes are: private limited company, limited liability partnership, and sole proprietorship. From these three types, a private limited company is by far the most common and preferred business entity type. This topic is covered extensively at types of business entities in Singapore.

What are the minimum statutory requirements for forming a Singapore private limited company?

Any individual or business entity (local or foreign) may incorporate a Singapore company subject to the following basic requirements:

• Must have at least one shareholder. The shareholder can be a local or a foreign person. Bearer shares are not allowed.
• Must have at least one local director. A director must be a natural person and above 18 years of age.
• The shareholder and the director can be the same person.
• Must have a minimum paid-up capital of S$1.
• Must have a local registered address (P.O. Box not allowed)
• Must have a qualified company secretary. Sole shareholder and director cannot act as the company secretary.
• A name approval is required prior to company registration. Names must not be:
  • identical or too similar to another business' name
  • infringing upon registered trademarks or patents
  • offensive or vulgar in any way 

For more information, see Singapore Company Registration guide. 

How long does it take to open a Singapore company?

The process of forming companies in Singapore is fully computerized and as a result, both the name reservation as well as the actual formation of the entity can be accomplished in a 1-2 days in most cases. If however, you are residing overseas, the logistics of getting the incorporation documents signed and delivered to the professional services firm that you have hired for the company registration might take a little longer. 

Exceptions: If the registrar of companies finds any objections to the proposed company name or if the company activities fall under regulated activities, the name approval process can take anywhere between few days to few weeks. Also, in certain circumstances, the authorities may seek additional information about the directors and shareholders before the registration is approved. 

What is the permitted currency for share capital?

Any major currency is allowed. Usually, the Singapore Dollar is the preferred currency of choice as a matter of convenience.

What is the minimum age requirement for directors and shareholders of a Singapore company?

Directors and shareholders of a Singapore company must be at least 18 years of age. 

Is a registered office required for forming a Singapore company?

Yes. A Singapore company must have a registered office in Singapore, from the date of its incorporation, to which all communications and notices may be addressed and which shall be open and accessible to the public. The registered office may or may not be the place of business. It must be open to the public for at least five hours during ordinary business hours every day, except Saturdays, Sundays and public holidays. 

Can I use my home as the place of business for my company?

Home-owners are allowed to conduct small-scale businesses in their homes under a new Home Office Scheme. This scheme applies to both private and Housing and Development Board ("HDB") properties. Eligible home-owners must seek prior written approval from HDB or the Urban Development Authority (as the case may be) to use their homes for home office use.   

Are there any restrictions on foreigners who wish to do business in Singapore?

No. The Singapore Companies Act allows 100% foreign ownership (i.e shareholding) of a private limited company. There are also no restrictions on the type of business activities that a company can engage in. No special approvals are required by foreigners. In other words, there is no difference between a local or a foreign person who wishes to form a Singapore company. 

Do foreigners need a Singapore partner to form a company?

Singapore company laws allow a foreigner to own 100% of a Singapore company. Therefore from a company ownership point of view, you do not require a local partner. However, every Singapore company is required to have at least one local director. There are number of different ways you can satisfy this requirement:

• If you plan to relocate to Singapore to run your company, you will need to apply for a work visa (employment pass or entrepass) under your new entity. Once your work visa is approved, you can act as the local resident director.
• If you have a local partner or know somebody in Singapore who is willing to act as the local director, your problem is solved.
• Alternatively, most firms in Singapore that specialize in corporate services can offer you the services of a professional nominee director for an annual fee. The nominee director does not require any shareholding in the company and need not be involved in the company management or banking matters. The professional services firm will likely ask you to sign an indemnity letter that covers both sides.

Do we need to engage a professional firm for our Singapore company formation needs?

If you are a local resident of Singapore, you can choose to register the company yourself (self-incorporation). In self-incorporation, the proposed directors, secretary and shareholders must all be either Singapore Citizens or Permanent Residents. However given the complexities of entity incorporation and ongoing statutory compliance, you are strongly advised to use the services of a professional services firm.

If you are a foreigner and wish to form a company in Singapore, you are required to hire a professional firm to act on your behalf.

Can I relocate to Singapore to operate my business?

Yes. It is possible to relocate to Singapore to operate your business, under work visa schemes. As the foreign owner, you can apply for an Entrepreneur Pass (work permit for entrepreneurs who lack good educational qualifications) or Employment Pass (work permit for entrepreneurs and skilled professionals with good educational qualifications). 

Note that even if you do not plan to relocate to Singapore, you can still incorporate and operate your Singapore company. You are not required to apply for any resident visa in such a case. 

Is it possible to form a Singapore company without a Singapore resident director?

No, it is not possible. Each Singapore company is required to have at least one local resident director at all times. 

Can a Singapore company hire foreign employees?

It is possible to hire foreign employees, provided they meet the work pass requirements. There are different categories of work passes available, that cater to different categories of employees based on their skills and educational qualifications. Certain work passes fall under a quota system, whereas there are others which are non-quota based. For more information on various work permit schemes, refer to Singapore Work Permit Schemes. 

Does Singapore company laws make a distinction between a regular director and a nominee director?

No, it does not. As per Singapore company laws, it is the duty of each director to fulfill his/her fiduciary duties to the fullest and all directors are equally responsible for acts of the company.

Are bearer shares allowed in Singapore?

No. Singapore law does not permit bearer shares. 

Are corporate directors permitted?

No. Directors must be natural persons. 

What is an Exempt Private Company (EPC)?

An Exempt Private Company (EPC) in Singapore is defined under Section 4(1) of the Companies Act as a company which has not more than 20 shareholders and its shares are not held by another corporate entity. 

What is a dormant Singapore company?

A Singapore company with no accounting transactions during a financial year is considered dormant company for that year. The transactions of a company that do not affect the dormant status of the company are:

• The taking of shares by a subscriber
• The appointment of a secretary
• The appointment of an auditor
• The maintenance of a registered office
• The keeping of registers and books
• The payment of any fee, fine or default penalty to the registrar or such other matters as may be prescribed.

A company which does any or all of the above transactions will still be treated as a dormant company in Singapore. However it must be noted that transactions involving payment of interest or taxes, receipt or disbursement of dividends, and other activities such as revaluation of assets, write off of debts, adjustments of a provisions etc., though do not affect the cash flow of the company, will negate the dormancy of the company. The importance of dormant status has significance only in relation to the annual filings requirements. For more detail, see statutory compliance guide. 

Are Singapore companies required to file audited accounts?

The company law requires that every company formed in Singapore must file its accounts (audited or unaudited) with the Accounting and Corporate Regulatory Authority of Singapore on an annual basis. A private limited company that qualifies as exempt private company and has an annual turnover less than S$5 million can file unaudited accounts whereas other companies are required to file audited accounts.  In practical terms, it means that most small to medium size private companies can file unaudited accounts.

Are Singapore companies required to have annual turnover?

No, there is no such requirement. Once the company has been incorporated, it has perpetual life unless closed by owners.

What type of business activities require approval in Singapore?

The Accounting and Corporate Regulatory Authority of Singapore (ACRA) controls the registration of business firms and incorporation of companies. However, the nature of the actual business activity could be subjected to control and regulation by other Government authorities. If your business requires a licence, it is mandatory to first acquire the necessary licence or permit before you can actually start business activities. Generally, it may take between 2 weeks to 2 months to get a licence or permit. Note that the business license application can be filed only after the formation of your Singapore entity.

There various types of licences and permits are as follows: 

• Occupational licences for professional services - Professionals such as lawyers, doctors, financial planners, pilots, commodity futures traders and accountants need to obtain occupational licences to practice.
• Compulsory licences - Certain types of businesses require a special licence before they can operate. Private schools, video companies, travel agencies, liquor distributors, moneylenders, banks and childcare centres are some examples.
• Business activity licences and permits - Licences and permits you need if you decide to carry out certain types of business activities. For instance, you may need to renovate, erect advertising billboards on your premises, or export your products. For each of these activities, you need to get a licence or permit.

For more informaton, see Guide to Business Licenses. 

Does Singapore Company Registrar issue a certificate of incorporation after formation of the company?

By default, a hard copy of the certificate of incorporation is no longer issued in Singapore. The email notification sent by the company registrar indicating the successful incorporation of the company is considered a valid proof in Singapore. 

However, if required, a hard copy of the Certificate of Incorporation can be requested from the registry house. A small fee will apply for the request.  

Is there a stamp duty for allotment or transfer of shares for a Singapore company? 

1. No stamp duty is payable on the allotment of shares.
2. Stamp duty is payable on the transfer of shares. 

Stamp duty on transfer of shares is payable on: 

1. Transfer of shares by way of gift
2. Transfer of shares on sale
3. Distribution of assets 

Stamp duty must be paid within:

1. 14 days from the date of execution if the document is signed in Singapore;
2. 30 days of its receipt in Singapore if the document is signed overseas.

The Stamp Duty rate is based on the Consideration or Net Asset Value, whichever is higher. The current rate is S$0.20 for every S$100 or part thereof. This is applicable to the transfer of both preference and ordinary shares.   

How difficult is it to close a Singapore company?

Companies can be terminated either by "Liquidation/Winding Up" or "Striking Off". Generally, striking-off is a less time consuming, less expensive and easier procedure than the liquidation process. However, there are certain conditions that the company has to satisfy in order to qualify for being struck off. The process takes anywhere between 3-6 months, depending on the complexities involved. Refer to Closing a Singapore Company for more detailed information. 

Is it difficult to change the name after company formation?

No, it is not difficult. The company name can be changed anytime after its formation. However, the new name will need to be approved first by the Registrar. Once the name has been approved, some paper formalities will need to be completed and lodged with the Registrar of Companies. 

Is it possible to increase the paid-up capital in the future?

Yes, very much so. After the entity has been formed, the increase of paidup capital is typically a 3-step process:

1. Inject the capital in your company's bank account
2. Prepare the necessary paperwork i.e. allocation of new shares to new or existing shareholders as appropriate
3. File the papers with the Registrar

What are the responsibilities and liabilities of directors and shareholders in Singapore?

For a detailed overview of the responsibilities and liabilities of directors and shareholders, see legal aspects of a Singapore company.  

Other Related Topics

Singapore Branch | Singapore Subsidiary | Singapore Representative Office