What do you need to register a company under Singapore jurisdiction?
- Choose company name. It will be better to think up 2-3 variants, in case the desired one is unavailable because this name is already taken.
- The postfix of the company is usually PTE. LTD., but PTE is also possible. LIMITED, PRIVTE LTE. and PRIVATE LIMITED
- Amount of minimum registered capital is one SGD; there are no restrictions on the amount and currency. If a client asks to register one SGD, then he needs to know the following. If over time it is necessary to transfer a share or an additional shareholder (s) appears in the structure, then the registered capital of 1 share (1 SGD) will need to be expanded to the amount that can be divided between the shareholders; therefore we recommend to register the capital of 1000 SGD (1000 shares) at the beginning. The registered capital must be credited to the corporate account of the company within a year from the date of registration of the company.
- Type of activity: you need to tell what the client needs and we will select the most suitable from the classifier list.
- According to the law, the company must have at least one resident director in Singapore. If you need to appoint an additional client director, you will need his/her passport and proof of address translated into English.
- Will a client be a shareholder or is a nominee service required?
- Account in a local (Singaporean) bank:
To open an account, the Customer must arrive in Singapore. The Customer will have to answer the following questions in English at the bank branch:
- an accessible description of the activity (product, service, meaning of operations, country (s))
- 3 contracting partners from the part of suppliers (product/service, country, website)
- 3 contracting partners from the part of buyers (product/service, country, site)
- approximate number of operations per month
- approximate amount of one operation
- account types other than SGD (USD, EURO)
Account in Singapore:
The advantage of opening an account in Singapore is that the country where the bank is located is the same as the country of incorporation. The banking system in Singapore is one of the strongest in the world.
Disadvantage of account in Singapore is that the company will be recognized as a tax resident, so all profits will be taxed on income.
We are actively working in Singapore for opening accounts with all leading banks: DBS. UOB, OCBC, Maybank Singapore and CITIBANK Singapore.
Initial deposits for opening an account eqqual 1000 in each required currency (added to the invoice upon registration).
In CITIBANK Singapore, average daily balances need to be maintained at USD 100,000. It is possible to open a multicurrency account and issue a multicurrency card.
Account outside Singapore:
Singapore has a territorial taxation principle, according to which a company that is a non-resident of Singapore is exempt from the need to pay income tax. When filing a tax return, we classify all income as Foreign Income and thus avoid Income Tax. In order for a company to be recognized as a tax non-resident, three following conditions must be met:
- Account outside Singapore
- Presence of a foreign director in the structure (preferably two) so that the local director does not sign decisions, contracts, etc. (we can appoint nominee Seychelles directors)
- Management is conducted outside Singapore, i.e. place of signing the documents is not Singapore, but the address of one of the foreign directors.
The disadvantage of an account outside Singapore is that the country of registration of the company will not coincide with the country of the bank’s location (banks in some jurisdictions are wary of this).
The registration period takes up to 5 days (the company is registered within 24 hours, after which documents are prepared and seals are made (secretarial pressure and main seal)
An audit is mandatory for companies that meet two of the three following conditions:
- Revenue is over 10 million SGD
- Assets number is over 10 million SGD
- Number of employees is over 50
These conditions make it possible to exempt a company with high turnover from audit, but such a company should have assets less than 10 million SGD and employees less than 50.
The basic income tax rate is 17% of the income.
Income Tax Benefits for Singapore Tax Residents are the following:
- in the first three years of operation, 75% of the first S $ 100,000 profit for each year is taxed;
- for each of the first three years 50% of the subsequent S $ 100,000 of profit is subject to income tax.
After the first three years, the company receives the following income tax benefits:
- 75% of the first S $ 10,000 of profits are exempt;
- only 50% of the subsequent S $ 190,000 profits is taxed.