Conditions for setting up a company in Singapore

Discover the essential conditions for setting up a company in Singapore, ensuring a smooth and compliant business launch in one of Asia’s most vibrant economic hubs. Singapore – The Lion Island, Asia’s vibrant economic center, has long been considered one of the most attractive destinations for investors and entrepreneurs worldwide. With a transparent business environment, world-leading state-of-the-art infrastructure, and a stable legal system, Singapore is not only an ideal location to set up a company, but also a solid foundation for your business to reach out to the international market. Companies established in Singapore operate in many sectors, however, according to a recent study, startups in the technology sector in Singapore have achieved an average growth rate of 30% per year over the past 5 years. This shows that Singapore is not only a financial center but also an emerging “Silicon Valley” of Asia. The establishment of a company in Singapore also has some conditions to note, Viet An Law would like to provide preliminary guidance on some conditions through the article below.

Notes on subjects establishing a company in Singapore

In Singapore, registering a company is relatively simple and open to both Singaporeans and foreign investors. However, to comply with the regulations of the Accounting and Corporation Authority of Singapore (ACRA), foreign investors need to use the local company registration service. The process of registering to establish a local company takes place as follows:

• Appointment of local directors: According to ACRA regulations, initially, the company must have at least one director who is a resident of Singapore. However, once the company is established, you can become the sole director and own 100% of the company’s shares.
• Documents to prepare: To begin the application process, you will need to prepare the following documents
  • Copy of valid passport
  • Proof of Overseas Residence Address
  • Business records (a brief description of the expected business activity)

Notes on the conditions for setting up a company in Singapore

Have at least one shareholder

• Shareholders can be individuals or legal entities, Singaporeans or foreigners.
• The number of shareholders is unlimited, but there must be at least one person.

Have at least one local or permanent director in Singapore

The requirement for a local director or permanent residence in Singapore is a mandatory regulation when setting up a company here. This regulation is intended to ensure that the company has a legal representative regularly residing in Singapore, who is willing to take responsibility before the law and government agencies.

Why do you need a local director?

• Liability: The local director will be responsible for the company’s business activities in Singapore, including legal compliance, tax payments, and other obligations.
• Contact with state agencies: The local director is the legal representative of the company when communicating with state agencies such as the Accounting and Group Authority of Singapore (ACRA), the Inland Revenue Department,…
• Company management: Local directors can be involved in the management and administration of the company, making important decisions.
• Dispute resolution: In the event of a dispute, the local director will be the representative of the company for settlement.

Who can be a local director?

• Singapore Citizen: A person with Singapore nationality.
• Permanent Resident: A foreigner who has been issued a permanent resident card in Singapore.
• Work permit holders: Foreigners who are working in Singapore and have a valid work permit.

Have at least one company secretary

The company secretary requirement is one of the mandatory regulations when setting up a company in Singapore. Like directors, company secretaries play an important role in ensuring that the company’s operations comply with Singapore’s laws and regulations.

Roles of the company secretary:

• Contact with state agencies: The company secretary is the representative to contact state agencies such as ACRA (Singapore Corporation and Accounting Regulatory Authority) to carry out administrative procedures, submit reports, and update information about the company.
• Record management: The secretary is responsible for keeping and managing important records and documents of the company such as meeting minutes, decisions of the board of directors, financial statements,…
• Notification to shareholders: The secretary is responsible for notifying important decisions and information about the shareholders’ meeting to shareholders.
• Ensure legal compliance: The secretary must ensure that the company complies with the provisions of Singapore’s corporate laws at all times.

Requirements for company secretary:

• As an individual: The company secretary must be an individual, not an organization.
• Permanent Residence in Singapore: The Secretary must have a permanent address in Singapore.
• Knowledge and experience: The clerk needs to have certain knowledge and experience in corporate law and regulations related to the company.
• Not holding the position of director: The secretary may not concurrently hold the position of director of the company.

Minimum charter capital

According to Singapore law, the minimum charter capital to establish a private limited company is only S$1 (SGD).

If you need assistance in setting up a company in Singapore, please contact Viet An Law Firm for quick support!