Type of Company: Private Limited Company
Statutory Capital: minimum S$1. Bearer shares are not allowed.
Shareholders: Person/corporate can be a shareholder. There are no requirements regarding the residency. Min 1 and max 50 shareholders are allowed.
Director: individual should be a director. At least one director must be a resident in Singapore (Singapore citizen, Singapore permanent resident etc). Unlimited number of additional local or foreign directors. The director must be more than18 years of age without any criminal reports in the past and must not be bankrupt.
Secretary: must be a resident in Singapore. A company secretary within six month of incorporation is required by Singapore Companies Act.
Registered Office: company must have a registered office address in Singapore and the office must be opened to public for minimum of three hours per day during normal business hours on weekdays.
Accounting: annual filing requirements should be submitted to Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). Singapore companies are required to prepare financial accounts according thier functional currency and to Singapore Financial Reporting Standards (FRS) which is quite similar to International Financial Reporting Standards (IFRS). The accounting profits are controled in accordance with Singapore tax rules.
Audit: company must appoint an auditor within 3 months from the date of incorporation, unless it is exempted from audit requirements. To be exempted from audit requirements, a company must satisfy all of the following criteria:
1) doesn't have any corporate shareholder;
2) total number of individual shareholders must be less than 20;
3) annual turnover of the company must be less than S$5 mln
Taxation: Singapore corporate tax rate is 17%. The effective tax rate is in fact lower due to partial exemption available to all companies and even more favorable exemptions available to new companies setup. Singapore taxes income based on territorial principle.
Tax Exemption for New Start-Up Companies: whether the company has less than 20 individual shareholders or there are corporate shareholders, at least one shareholder should be an individual with min 10% shareholding, the first S$100 000 will be exempted from taxation. Next S$200 000 will be subject to 8,5% tax. Once the income will be over S$300 000 tax should be paid according to regular tax rate.
A company that does not qualify for a tax exemption for new start-up companies will be given partial tax exemption. For such companies first S$100 000 will be subject to 4,25% tax; next S$200 000 – 8,5% tax, above S$300 000 income – 17% tax.
Advantages of Singaporean company:
- developed infrastructure
- stable political and economical environment
- possibility of legal tax exemptions
- Singapore company is not considered as an offshore company in a tax haven. Singapore is a reliable, reputable, global trading jurisdiction and ranked as the 5th least corrupt country in the 2011 Corruption Perceptions Index by Transparency International.
- tax treaties with approximately 86 countries, including 69 comprehensive double tax treaties. Singapore is also a member of ASEAN, therefore it has free trading access with Indonesia, Malaysia, the Philippines, Thailand, Brunei, Burma, Cambodia, Laos and Vietnam.
- high standards of living
Walton Consultants DMCC