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Setting up a Private Limited Company in Singapore

Updated on Wednesday 02nd March 2022

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By Vlad Cuc, specialist in company formation matters

Foreign investors have several choices when it comes to company formation in Singapore. The most preferred type of company in the limited liability company(LLC)Singapore limited liability companies are also referred to as company limited by shares in which the responsibilities of the shareholders are limited to the amount they invested in the company. According to the Singapore Company Act, limited liability companies are legal entities separated from their members, the personal assets of the shareholders being protected from any business liability. 

With a vast experience in company registration in the city-state, our local specialists can help foreign entrepreneurs who want to open a company in Singapore under the form of a limited liability company.

 Quick Facts  
  Used for

Small and medium-sized business in any industry

Investor liability

Limited

Minium capital

 SGD1
Number of shareholders 

at least one and no more than 20

Residency requirements Not for the shareholders
Foreign investor restrictions

No foreign investor restrictions

Company secretary

Mandatory. To be appointed within 6 months of incorporation. The appointed natural person is a resident in Singapore.   

Company requirements The company's constitution is the legal document containing mandatory information about the business.
The company has a registered office address in Singapore.
The name of the company cannot be identical to an existing name.
Registration with the Accounting and Corporate Regulatory Authority (ACRA) 
Permits and licenses Issued after registration, depending on the business filed in which the company activates (i.e. for financial serrvices providers).
Corporate tax 17% 
Annual filing requirements Annual General Meeting 
Annual return

The Company Law on limited liability companies in Singapore

As mentioned above, the Company Act is the main law to provide for the opening of a business in Singapore. According to it, there are several types of companies which can be incorporated in the city-state. These business forms are the same for local and foreign entrepreneurs interested in having a Singapore company.

Among the structures available for those who want to open companies here, the Singapore limited liability company is preferred by most investors. Based on the provisions of the Company Act, there are several forms of limited liability companies which can be created in Singapore. These are:

  • - the private limited liability company, which is also the most employed type of structure in Singapore;
  • - the private exempt limited liability company which has certain restrictions in relation to the number of shareholders;
  • - the subsidiary company which in Singapore is provided for the Company Law, compared to other jurisdictions;
  • - the public limited liability company which is available for those interested in setting up large operations in Singapore;
  • - the Singapore public company limited by guarantee which can be created for non-profit purposes.

A few aspects which need to be considered when setting up a limited liability company in Singapore is that the private exempt company requires a maximum number of 20 shareholders, while the public company requires at least 50 shareholders. It can also trade its shares on the Singapore Stock Exchange.

If you want to open a company in Singapore and need assistance in choosing the right type of structure among the limited liability companies available for incorporation.

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What are the requirements for opening a limited liability company in Singapore?

The Company Act establishes the minimum share capital for registering a limited liability company in Singapore is 1 SGD. The shareholders can decide the amount they need in order to successfully start their business. The Singapore limited liability company must have at least one shareholder and maximum number of 50 and their shares cannot be traded on the Stock Exchange. The name of the private limited liability company must end in “Private Limited” or “Pte Ltd”. The Commercial Code provides for both natural persons and corporate entities to register limited liability companies in Singapore. The limited liability company is the perfect choice for foreign companies opening subsidiaries in SingaporeLimited liability companies must have at least one director and a company secretary who must be a Singapore resident.

Company formation procedure for a PLC in Singapore

The first step towards setting up a private limited company in Singapore is to choose and reserve a name for the company. The business name reservation application is submitted with the Singapore Accounting and Corporate Authority. The second step is to have the company’s Memorandum and Articles of Association drafted. The registration of a PLC in Singapore requires the appointment of local agents who will handle the incorporation procedure. After the company is incorporated it must also register for taxation purposes.

Our consultants in company registration in Singapore can draft the Memorandum and Articles of Association for you company and can also handle the incorporation procedure.

Documents for setting up a private limited company in Singapore

The following documents must be provided upon the incorporation of a limited liability company in Singapore:

  1. the shareholders’ identification papers, which can be the ID in the case of Singapore citizens and the passport in the case of foreign citizens;
  2. information about the company’s director or managers and the company secretary;
  3. the company’s Memorandum and Articles of Association which must be notarized;
  4. the receipt showing the payment of the company registration fee with the Trade Register;
  5. proof of the registered address in Singapore, which can be represented by an office rental contract;
  6. additional information will be required in case one of the shareholders is a company.

Our Singapore company formation agents can assist with the preparation of the documents for setting up a private limited company in Singapore.

The Articles of Association of a Singapore limited liability company

The main documents related to the establishment of a limited liability company are the Articles of Association which are the statutory documents of any business in Singapore. The Articles of Association of a limited liability company must contain the following information:

  1. the name of the company, the date of its incorporation and the date of its termination (where applicable);
  2.  the names of the shareholders, their residence addresses and the number of shares held in the company;
  3. the names of the directors, their personal information and information about how they are appointed and removed;
  4. information about the share capital of the company, the number of shares issued, their distribution among the shareholders, and the types of shares issued;
  5. information about the company secretary who needs to be a Singapore resident (nominee services can be provided for such a role);
  6. the main object of activity of the company and other secondary objects of activity (if necessary);
  7. information about the legal address of the company (it must have a registered address in Singapore);
  8. information about the date of the general annual meeting and other resolutions passed by the shareholders.

The Articles of Association must be filed with ACRA upon the registration of the company. Also, anytime a change is brought to the company, these documents must be amended.

If you want to open a company in Singapore or make any changes in your limited liability company, our consultants in the city-state are at your service.

It is important to note that a Singapore limited liability company must have a legal address in the city-state all the time. Also, upon registration on in maximum 14 days after registration, the working hours of the company must be declared with ACRA, according to the Company Law. A limited liability company must also have a seal which can be made before the registration procedure is begun.

Why register a limited liability company in Singapore?

The limited liability company is the preferred choice of a business form for both local and foreign investors in Singapore. This is because the shareholders will have limited accountability for the obligations and the debts of the company. Their responsibility will be limited to the amount they invested. Also, the Singapore company formation requirements are minimum when it comes to the shareholding and management structure of the business, as seen above.

However, foreign enterprisers are required to hire a local consultancy firm or appoint a local agent resident of Singapore to carry out the registration procedure. Other than that, there are no special requirements or business licenses when opening a PLC in Singapore.
 

Below, we list some of the top reasons why investors choose this type of company:
 
- Low taxes: Singapore has one of the lowest corporate tax rates in the region applicable to this business form.
- Easy incorporation: this business form can be easily set up by observing only a few key and mandatory steps.
- Distinctiveness: this refers to the fact that the company, the private limited company, is a separate legal entity from its founders.
- Ease of doing business: apart from the company’s characteristics, investors may wish to open a company in Singapore because of the favorable business climate.
 
Investors may find that one or more of these listed reasons for setting up a company in Singapore as a private limited company also applies in their case. However, it is advisable to reach out to our team of experts before choosing the business form and starting the incorporation procedure. One of our agents will be able to answer any other additional questions about this business form.
 

What are the benefits of setting up a private limited company in Singapore?

 
The low taxes applicable to companies as well as the fact that the founders are only liable up to the extent of the invested capital are important characteristics. Likewise, investors benefit from the fact that the company has a legal personality, thus it is treated separately from its founders and directors. It can also enter into debt and enter into contracts and commence legal action against other parties in its own name.
 
The following list includes four more reasons for setting up a private limited company in Singapore:
 
- Facile succession: the company survives in time is not dependent on whether or not its initial members remain within the company,
- Easy capital raising: the corporation can increase its capital by admitting new shareholders or issuing more shares to existing ones.
- Easy ownership transfer: the ownership of the company can be transferred as needed (partially or in its entirety) without the need to pause the activities.
- Credibility: this business form is one that offers a credible image to clients and business partners, as opposed to the sole trader, for example.

Our specialists in company formation will provide you with more information about the advantages of limited liability companies. We invite you to watch our short video on how to open a company in Singapore as a LTD:

Taxation of limited liability companies in Singapore

From a taxation point of view, Singapore has one of the lowest corporate taxes in Asia: 17%. However, startups registered as limited liability companies may also benefit from full tax exemption during their first year of activity. Apart from this, the Government also enables various incentive schemes under which investors can apply for tax exemptions or deductions.

Foreign companies can also register subsidiaries under the form of limited liability companies and thus benefit from Singapore’s double taxation agreements.

From an accounting point of view, the Singapore limited liability company is required to prepare its annual balance sheets which must be audited and filed with ACRA. The advantage is that there are many professional accounting firms offering tailored accounting services to foreign owners of limited liability companies.
 

Other tax facts for Singapore include the following: 
 
- the standard corporate tax rate is 17%;
- for the year of assessment 2020 (the income year 2019), 75% of the first 10,000 SGD of normal taxable income are exempt from taxation; moreover, 50% of the next 190,000 SGD of regular taxable income are exempt from tax;
- for qualifying new private companies, 75% of the first 100,000 SGD of normal taxable income and 50% of the next 100,000 SGD normal chargeable income can be exempt from tax for the first three consecutive years; this is subject to certain conditions. 
- there is no withholding tax on dividends paid by resident Singapore companies; royalties paid to a non-resident company are subject to a 10% withholding tax (except for the case in which a double tax treaty applies and contains specific provisions on this matter).
 
The various tax advantages, most notably the low taxation regime and the percentages of the normal chargeable income that are exempt from tax, are an important advantage to all investors who are considering setting up a company in Singapore.
 
In addition to the low-tax regime, investors interested in setting up a private limited company in Singapore should know that they could also access a set of industry-specific incentives. These include the following:
 
- for the tourism industry: a tax deduction for companies that promote inbound tourism and those that participate in local trade exhibitions.
- for e-commerce companies: a 10% tax reduction for a period of five years for e-commerce transactions with companies outside of the city.
- for R&D companies: 5-15% tad reduction under the development and expansion incentive, an investment allowance, a pioneering incentive scheme, a productivity and innovation credit scheme.
- shipping and maritime companies: the maritime sector incentive that allows for tax concessions for five years on qualifying income, shipping support services as well as withholding tax exemptions. 
- events: companies involved in the organization of major events in Singapore can benefit from a 10% concessionary tax rate on the income derived from these.
 
These are just some examples of tax incentives that may be available to companies operating in different fields. Please note that there are certain eligibility criteria that must be fulfilled. For a complete list of these incentives, please reach out to our agents.

Limited liability companies in Singapore also have the possibility of trading in the EU by obtaining EORI numbers.

Accounting requirements for limited liability companies in Singapore

Considering there are several types of limited liability companies which can be established in Singapore, it should be mentioned that the accounting requirements will depend on the form of the company. For example, private and exempt limited liability companies will benefit from simplified accounting and audit requirements, while public companies will be subject to more stringent requirements.

We are at your disposal with both company formation and accounting services for your limited liability company in Singapore.

How can a Singapore limited liability company be used?

A limited liability company can have several uses in Singapore. Among these are:

  • - it can be used as a subsidiary by foreign companies interested in doing business in Singapore;
  • - it can be used as a holding company, which is one of the best tax minimization tools in Singapore;
  • - it can be used as an offshore company and thus address other markets around the world;
  • - its main use is that of an onshore company employed for trading purposes in Singapore.

You can also contact us for any other information related to setting up a private limited company in Singapore or any other type of company. You can rely on our company registration representatives for personalized advice in opening a company in Singapore, including a limited liability company. We can handle the business incorporation procedure from the beginning until the end.

Why choose us?

Roger Pay is the Managing Director of Bestar and an experienced company formation consultant. He will help you open your company in Singapore as fast as possible. 

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As a Bestar clientyou will benefit from the joint expertise of local lawyers and consultants for opening an offshore company in Singapore.

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Call us now at +65 88364489 in order to set up an appointment with our consultants in Singapore

 
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