Requirements for Foreigners Setting Up a Company in Singapore

Singapore is one of the most business-friendly countries in the world, consistently ranked high for ease of doing business. With its low tax rates, strong legal framework, and strategic location in Asia, it’s no surprise that many foreign entrepreneurs choose Singapore to incorporate their companies. However, while the process is streamlined, foreigners must meet certain legal and regulatory requirements before starting operations.

This article outlines the key requirements, step-by-step procedures, and considerations for foreigners setting up a company in Singapore.

1. Types of Business Entities Available to Foreigners

Before setting up a company, it’s important to understand the types of business structures available in Singapore. Foreigners typically choose one of the following:

a. Private Limited Company (Pte Ltd)

This is the most common and recommended structure. It is a separate legal entity, which means the company’s liabilities are distinct from its shareholders. A Pte Ltd company can have 100% foreign ownership, providing full control to foreign entrepreneurs.

b. Branch Office

A branch office is an extension of a foreign parent company. It is not a separate legal entity, meaning the parent company is liable for its debts and obligations in Singapore. This structure suits established foreign businesses expanding into Singapore.

c. Representative Office

A representative office is for market research or liaison activities. It cannot engage in profit-generating business. This option is suitable for foreign companies testing the market before fully setting up operations.

For most foreign entrepreneurs, the Private Limited Company structure offers the best combination of flexibility, credibility, and tax efficiency.

2. Legal Requirements for Foreigners

a. Local Director Requirement

Every Singapore company must have at least one local director who is:

• A Singapore Citizen, Singapore Permanent Resident (PR), or

• An EntrePass holder (a special visa for entrepreneurs).

Foreigners who do not have local residency must appoint a nominee director to meet this requirement. Nominee director services are commonly offered by corporate service providers in Singapore.

b. Company Secretary

Within 6 months of incorporation, the company must appoint a qualified company secretary who is a Singapore resident. The secretary ensures compliance with the Companies Act, maintains statutory registers, and handles corporate filings.

c. Registered Address

All companies must have a local Singapore address as the official registered office. It must be a physical address (not a P.O. Box) where company records are kept and notices can be sent.

d. Minimum Share Capital

The minimum paid-up capital required to start a company in Singapore is S$1. There is no requirement for additional capital, but most companies begin with a nominal sum (e.g., S$1,000) to facilitate banking and operational needs.

e. Shareholders

A Singapore Private Limited Company can have 1 to 50 shareholders, who may be individuals or corporate entities. 100% foreign shareholding is allowed, giving full ownership to foreign entrepreneurs.

3. Steps for Foreigners to Incorporate a Company in Singapore

Setting up a company in Singapore is a relatively straightforward process. Here are the steps:

Step 1: Engage a Corporate Service Provider

Foreigners cannot self-register a company in Singapore. Incorporation must be done through an ACRA-registered filing agent or corporate service provider. These professionals handle all regulatory compliance and submissions.

Step 2: Choose a Company Name

The company name must be approved by ACRA (Accounting and Corporate Regulatory Authority) before incorporation. The name should:

• Be unique and not identical to existing entities

• Not infringe trademarks or copyrights

• Avoid vulgar or misleading terms

Once approved, the name is reserved for 120 days.

Step 3: Prepare Incorporation Documents

The following documents are required:

• Company name approval

• Description of business activities

• Details of directors, shareholders, and company secretary

• Registered office address

• Company constitution (previously called Memorandum & Articles of Association)

If shareholders are foreign entities, certified copies of their incorporation documents must also be provided.

Step 4: Submit Incorporation Application to ACRA

Once the paperwork is complete, your filing agent will submit the incorporation through ACRA’s online portal, BizFile+.If everything is in order, approval is usually granted within one working day.

Step 5: Open a Corporate Bank Account

After incorporation, the next step is to open a corporate bank account in Singapore. Major banks such as DBS, OCBC, UOB, HSBC, and Standard Chartered offer corporate banking services.Requirements typically include:

• Company registration documents

• Proof of address

• Identification of directors and shareholders

• Business plan or projected activity (for foreign-owned companies)

Some banks require directors to be physically present, though a few allow remote verification.

Step 6: Apply for Relevant Business Licenses (if applicable)

Depending on the nature of your business, certain licenses may be required, such as:

• Food shop license (for F&B businesses)

• Employment agency license

• Fintech or financial advisory license (regulated by MAS)

Your corporate service provider can assist in identifying and applying for the relevant licenses.

Step 7: Register for Taxes

All companies are automatically registered for Corporate Income Tax upon incorporation.However, Goods and Services Tax (GST) registration is required if your annual taxable turnover exceeds S$1 million or if you voluntarily wish to register for GST.

4. Employment and Visa Requirements

Foreign business owners who wish to relocate to Singapore to manage their company must obtain the appropriate work pass.

a. Employment Pass (EP)

For foreign professionals, managers, or directors earning a fixed monthly salary (usually above S$5,000). This pass allows the holder to live and work in Singapore and act as a company director.

b. EntrePass

Designed for foreign entrepreneurs who plan to start and operate an innovative business in Singapore. Applicants must meet eligibility criteria set by the Ministry of Manpower (MOM), such as:

• Having funding from an accredited venture capitalist, or

• Owning intellectual property or innovative technologies.

c. Dependant’s Pass and Long-Term Visit Pass

These allow the immediate family of Employment Pass or EntrePass holders to stay in Singapore, subject to salary and eligibility conditions.

Foreign directors who do not hold valid work passes can still serve as non-resident directors, but they cannot engage in the company’s daily operations without a valid visa.

5. Ongoing Compliance Requirements

Once your company is incorporated, several ongoing compliance obligations must be fulfilled:

a. Annual Return Filing

Every Singapore company must file an Annual Return with ACRA within 7 months of its financial year end. This filing updates ACRA on key company details such as directors, shareholders, and financial statements.

b. Corporate Tax Filing

Companies must submit an Estimated Chargeable Income (ECI) within 3 months of their financial year-end and file their Corporate Income Tax Return (Form C-S or C) with IRAS by 30 November each year.

c. Annual General Meeting (AGM)

Private companies must hold an AGM within 6 months after the financial year-end unless they are exempted under certain conditions.

d. Bookkeeping and Accounting

Companies must maintain proper accounting records and financial statements prepared according to Singapore Financial Reporting Standards (SFRS). Many foreign-owned firms outsource these services to local accounting firms.

e. Changes in Company Details

Any changes (e.g., directors, shareholders, address, share capital) must be updated with ACRA within the prescribed timelines to avoid penalties.

6. Tax Advantages for Foreign-Owned Companies

Singapore offers one of the most competitive corporate tax regimes globally, which attracts many foreign investors.

• Corporate Income Tax: Flat rate of 17%

• Tax Exemption Scheme for New Start-Ups: First S$100,000 of chargeable income is tax-exempt for the first three years.

• No Capital Gains Tax

• Extensive Double Taxation Avoidance Agreements (DTAs): Singapore has treaties with over 80 countries.

Foreign entrepreneurs can also benefit from various government grants and incentives if they hire locals or engage in innovation and productivity initiatives.

7. Hiring Employees in Singapore

If your company intends to hire staff, you must:

• Register with the Central Provident Fund (CPF) Board

• Provide employment contracts compliant with the Employment Act

• Comply with work pass regulations for foreign employees

• Ensure workplace safety and health standards are maintained

Employers are also encouraged to hire local staff through initiatives like the Fair Consideration Framework (FCF).

8. Why Foreigners Choose Singapore

Foreign entrepreneurs are drawn to Singapore for several compelling reasons:

• Political and economic stability

• Transparent and efficient legal system

• Strong protection of intellectual property

• Excellent connectivity and infrastructure

• Highly educated, English-speaking workforce

Furthermore, Singapore’s reputation as a financial and innovation hub makes it a preferred choice for startups and multinational corporations alike.

9. Partnering with a Corporate Services Provider

Since foreigners cannot self-register a company, it is highly recommended to work with a trusted corporate services firm.These professionals can assist with:

• Company incorporation

• Nominee director services

• Company secretary and registered office

• Accounting, tax, and compliance matters

• Employment Pass and EntrePass applications

Partnering with a reliable firm ensures full compliance with Singapore laws and helps foreign investors focus on growing their business.

Conclusion

Setting up a company in Singapore as a foreigner is a straightforward process if you understand the legal and administrative requirements. With 100% foreign ownership allowed, minimal capital requirements, and a pro-business environment, Singapore remains one of the best places in Asia for entrepreneurs to establish their companies.

By working with a professional corporate service provider, foreign investors can incorporate their business quickly, manage compliance efficiently, and enjoy the many advantages that come with operating in Singapore’s vibrant economy.