Singapore is a leading destination for foreigners who want to start businesses abroad. In 2018, it was ranked as the second easiest place to do business globally by the World Bank. It had also previously been ranked at the top position for several consecutive years. Besides, it is among the wealthiest and least corrupt (almost zero corruption level) nation, thus providing a favourable environment for doing business.
Requirements for incorporating a company in Singapore
A company must be incorporated before it starts operations whether it is owned by locals or foreigners. The incorporation process is similar regardless of the owner’s citizenship. The requirements before incorporating a Singapore company include:
- The company must have a registered address in Singapore
- The name of the company must have been approved
- Between one and 50 shareholders
- Paid capital of at least S$1 (One Singaporean dollar)
- An appointed resident director
- A company secretary that must be appointed within six months of the date of incorporation
Foreigners who plan to migrate to Singapore to run the operations of their company that they are setting up must obtain the necessary work visas. They can apply for either an Employment Pass (EP) or an Entrepreneur Pass (EntrePass) from the Ministry of Manpower (MoM). With either of these passes, one can become the company’s resident director. However, if foreigners starting a company in Singapore intend to run it from abroad without settling in Singapore, they do not need to get Singapore work visas.
Besides the work visas, foreigners who plan to start a company in Singapore must meet some other criteria. They include the following:
- They must engage the services of a professional firm to register the company
This is necessitated by the fact that the law prohibits foreigners from doing company registration on their own. Even locals who intend to incorporate companies are better off utilizing the services of professional firms to avoid mistakes that may delay the process. Those who wish to register companies in Singapore (locals and foreigners) can engage One Visa experts to help them with the incorporation and visa processing where necessary.
- They will need to open a corporate bank account at a bank in Singapore
The process of opening a corporate bank account is simple and quite fast. It is advisable for foreigners starting companies in Singapore to open bank accounts with banks that offer corporate accounting features so that they meet business purposes as well as banking needs.
Businesses may open corporate accounts at any bank in Singapore. Below are some of the requirements when opening a corporate account:
Ø A certified copy of the certificate of incorporation
Ø A copy (certified) of the company’s articles and memorandum of association
Ø Proof of the directors’ signatories
Ø Residential addresses of the ultimate beneficiary owners
Ø A certified copy of the business profile from the Accounting Corporate and Regulatory Authority (ACRA)
Ø The board of director’s resolution approving the opening and signing of the account
Ø Certified copies of passports (applies only to foreigners )
Requirements for company directors
It is a key requirement in Singapore that a company director must be appointed before a company can be incorporated. Singapore’s Company Act requires one of the directors to be a Singapore resident. According to ACRA, this means that the director’s primary residence is within Singapore but not mandatory that the director is a Singaporean citizen. Those considered as residents provided that they have a residential address in Singapore includes EntrePass holders, EP holders, and permanent residents.
One also must be at least 18 years old to be appointed a director and not over 70 years old unless they are reappointed as directors during the company’s annual general meeting. Moreover, the following people are ineligible to become company directors in Singapore:
- Those already formally disqualified by the court
- Those convicted of fraud and dishonesty-related crimes
- Those considered mentally or physically unfit to execute the duties of a director
- Bankrupt people who are not yet discharged
- Those who have been convicted for three years or more for violating the Companies Act
- Those who in five years have a minimum of three High Court orders, making it mandatory for compliance under the Companies Act
Such ineligible individuals must inform the company of that ineligibility so it can, in turn, inform ACRA.
Foreign entrepreneurs who have what it takes can start and succeed in operating a company in Singapore. However, they should be cognizant of the cultural differences, laws, and other factors that can affect their businesses. They also need to have researched their specific area of interest and come up with realistic business plans whose execution will bring them great rewards both financially and in personal satisfaction.