Company Formation in Singapore as a Foreign National

By Antabikhya Gogoi, Legal Intern at Emkay Solutions and a Third Year B.A. LL.B (Hons) Student at NLU Assam.

INTRODUCTION

The island Country of the Republic of Singapore is situated in the heart of Southeast Asia. It is one of the most business-friendly countries in the world with Government commendatory regulations. Other factors such as availability of skilled workers, stable political environment, almost null corruption, strict legal frameworks and favorable tax regimes makes it the perfect location for you to expand your business. Here is everything you need to know about Company incorporation for foreign nationals in Singapore before expanding your business.

Types of Companies under Company Law of Singapore

1. Sole Proprietorship

   A single proprietorship means one man company. Here the entire business entity is owned, operated and managed by a single person. The business is the same as the owner, meaning it does not have a separate legal identity from the individual. Here, there is no hassle and difference of opinions as only one individual handles everything. It is the easiest and most cost-effective type of company to establish in Singapore. However, this type of business compels the individual to take personal liability for any debts and losses. It may even be called an unlimited liability company.

2. Partnerships

   A business structure which is run by two or more partners is known as a partnership. It is easy to establish, with responsibilities and decision-making shared among the partners. Here, the partners have unlimited liability over any debts or losses by the company which can be risky. Further partnerships may face challenges such as potential disputes between the partners.
   

3. Private Limited Company (Pte. Ltd.)

   A Pte. Ltd. Company is a separate legal entity owned by its shareholders. It is the most favorable business structure in the country as it provides various tax benefits and the highest credibility. Maximum there can be 50 shareholders and a minimum paid-up capital of SGD $1 is required to establish a new Pte. Ltd. To incorporate a private limited company, appointing a local director is mandatory which can be considered a disadvantage. There are also more requirements to be followed by this type of company. This structure is considered more credible than sole proprietorships or partnerships, benefiting from a favorable tax regime that supports business growth. Foreign nationals planning to manage their company in Singapore must obtain an Employment Pass (EP), which allows professionals and executives to live and work in the country.
   

4. Limited Liability Partnership (LLP)

   It is a combination of a partnership and a company. It offers limited liability protection to its owners making it ideal for professional services firms, allowing partners to combine their expertise and share profits. However, it has complex management and regulatory requirements. Additionally, the business does not have corporate tax benefits and the partners are personally taxed.

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Process of Company Incorporation` for Foreign Nationals in Singapore

There are 6 total steps for the process of incorporation of a company for foreign nationals in the UK. They are as follows:

1. Choose Company Type

   A Private Limited Company is the most favourable business structure for high risk, growth focused businesses. However, other company structures may be chosen to meet the unique requirements of everyone. Different business entities provide different benefits
   

2. Choose Company Name

   After choosing a business structure, a name for the said business must be chosen. It needs to be unique meaning it should not match with an already existing company. It must meet the guidelines and other requirements as per the guidelines of the Accounting and Corporate Regulatory Authority (ACRA) of the country
   

3. Select a Local Director

   Foreigners setting up a company in Singapore must appoint a local or resident director to meet registration requirements. This can be a friend, family member, or a qualified individual who meets legal criteria. Alternatively, they can hire a nominee director service for temporary or long-term compliance with statutory regulations. The local director ensures compliance with regulations and acts in the company's best interests.
   

4. Appoint a Company Secretary

   A local company secretary must be appointed by the company. This person must meet the legal criterias and should also be a permanent resident of Singapore. This secretary acts as the bridge between the Company and the competent authorities of the Singapore Govt.
   

5. Submit Registered Office Address, MOA, AOA, Constitution of the Company, etc.

   This involves submitting relevant documents like the constitution of the company, details of the directors,and shareholders, and also appropriate information about the company to the appropriate authorities.

   
   

6. Open a Corporate Bank Account

   A corporation must open its own bank account for conducting business, managing financial transactions, and finalizing company incorporation.
   

7. Apply for Visa or Work-Pass.

   Foreigners looking to establish a company in Singapore can choose from various work visa options, including the Employment Pass (EP), Tech.Pass, and even a Dependent’s Pass for the dependents of the foreign nationals. Each visa has specific eligibility criteria and benefits, tailored to different entrepreneurs, investors, and skilled professionals.
   

8. Apply for Government Funds if Applicable

   Singapore provides a range of government support for foreign-owned businesses, including grants, loans, and tax incentives. So for the quick and effective growth of a company, one can apply for the same.

Conclusion

Singapore offers business-friendly policies, strong legal framework, and attractive tax incentive which makes it an ideal environment for entrepreneurs to wish to establish their own businesses in the country. Setting up a business in Singapore as a foreign national is a straightforward yet structured process. However, navigating the compliance requirements—such as appointing a local director, company secretary, and securing the right work visa—is essential for a smooth setup. By understanding the process and making the most of government support and funding opportunities, foreign businesses can thrive and grow in one of the world’s most dynamic economies