From Idea to Incorporation: Forming a Singapore Private Limited Company

Singapore is one of the most attractive countries in the world for entrepreneurs and business owners to set up their companies.

A private limited company (Pte Ltd) is the most common type of business entity used by foreign investors in Singapore.

It offers many advantages, such as limited liability, tax incentives, and access to global markets.

In this blog, we guide you through the setup process and share key information that you should know.

What is a Private Limited Company?

Before diving into the setup process, it is important to understand more about the company type that you are choosing. A private limited company features distinct characteristics, such as:

• Having a maximum of 50 members
• It is limited by shares, which are held and sold privately instead of being on a stock exchange
• A business that is a separate legal entity, distinct from its shareholders and directors
• Members having limited liability
• Being able to sue or be sued in its name
• Being able to own property in its name
• Members not being personally liable for the company’s debts and losses
• Profits taxed at corporate tax rates (17%)
• Perpetual succession until it is shut down or struck off from the register

Related Read: Company Registration in Singapore: Ultimate Guide for Foreigners

What Are the Benefits of Setting Up a Private Limited Company?

There are various advantages associated with setting up a private limited company. We explore some of the key benefits here:

Taxation of Profits at Corporate Tax Rate

Although the headline corporate tax rate is 17%, the effective tax rate is usually lower because of various tax exemptions and schemes. One example is the tax exemption scheme for new startup companies.

Under this scheme, qualifying businesses can expect these exemptions for the first 3 consecutive YAs:

• 75% exemption on the 1st S$100,000 of regular chargeable income
• An additional 50% exemption on the next S$100,000 of regular chargeable income

From the 4th year onwards, firms can enjoy partial tax exemption.

Separate Legal Entity and Limited Liability

Being a separate legal entity from its owners provides limited liability protection. This means that the business is considered a distinct legal entity from its owners.

Hence, the personal assets of the owners are protected from business debts and legal liabilities incurred by the company. If the business goes bankrupt, the owners’ personal assets such as their homes, cars, and personal bank accounts are not at risk.

In the event of financial difficulties or legal disputes, shareholders are only liable for the amount of capital they have invested in the company.

This gives business owners peace of mind and allows them to take risks and make decisions without fear of losing everything they own.

Additionally, having a separate legal entity can enable the business to enter into contracts, hire employees, and own assets in its own name, which can help facilitate growth and expansion opportunities.

Perpetual Succession

A private limited company has perpetual succession, meaning it will continue to exist even if its shareholders or directors leave or pass away. This allows the company to maintain business continuity and facilitates long-term planning.

What Are the Requirements of Private Limited Company Registration?

The requirements to set up a private limited company in Singapore are fairly straightforward:

• Approved company name application
• Minimum initial paid-up capital of S$1
• At least 1 locally resident director
• At least 1 company secretary
• Between 1 to 50 shareholders, which can be either an individual or company
• A local registered physical business address

How to Register a Private Limited Company in Singapore

It is important to note that foreigners setting up a business entity in Singapore must engage a registered filing agent to submit the application to ACRA via BizFile+ on their behalf.

This registered filing agent can be a corporate secretarial company, law firm, or even an accounting firm. While locals do not need to do so, it is recommended to engage a corporate services provider to assist you with the application.

There are various steps involved in your private limited company registration. We take you through these steps and detail the key points to remember:

Submit Your Company Name Application

The first step of registering your company is to select a suitable company name and submit an application to the Accounting and Corporate Regulatory Authority (ACRA) via its online portal BizFile+.

These are the things to take note of when you choose your name:

• It cannot be similar to an existing name
• It cannot have undesirable or illegal words

When you submit your name application, you must also detail your business activities by choosing the most relevant Singapore Standard Industrial Classification (SSIC) code 2020.

After your name application is approved, you have 120 days from the date of approval to incorporate your Singapore private limited company.

If your application is referred to other government agencies for reviewing and approval, it may take around 14 to 60 days to be processed.

Use Our Free Company Name Check Tool

Choose a Financial Year End (FYE)

It is essential to choose an FYE carefully because this is the date that determines when your business’ taxes and filings are due annually.

As you are opting for a private limited company, you must hold your annual general meeting (AGM) within 6 months after your FYE. You must also file your annual returns (AR) within 7 months of the FYE.

For example, if your private company’s FYE is 30 June 2024, your AGM must be held on 31 December 2024 and the AR due date is 31 January 2025.

For private non-listed businesses with share capital and a branch register overseas, you must also file your AGM within 6 months of the FYE, but you must file your AR within 8 months of the FYE.

Annual Filing Requirements

As mentioned, private limited companies have statutory obligations that they must comply with – namely holding an AGM and filing their AR.

Even if your company is exempt from filing income tax by the Inland Revenue Authority of Singapore (IRAS), you must still file its AR as long as its operating status is live.

Choose Key Personnel

All Singapore companies are required to have at least 1 director and company secretary. You must submit the personal particulars of your appointed company officers, such as their names, nationality, home address, contact details, and NRIC.

Company directors must meet these guidelines:

• Be at least 18 years old
• Be of full legal capacity
• Be a Singapore citizen, permanent resident (PR), EntrePass or Employment Pass (EP) holder
• Must not be disqualified from serving as a company director, such as an undischarged bankrupt

Note that all directors, whether nominee or not, are equally liable if offences arise, as the Singapore Companies Act does not differentiate between “active” and “sleeping” directors.

You must hire a company secretary within 6 months of your incorporation date. If you leave it empty for more than 6 months, your company directors may be fined up to S$1,000.

A company secretary must:

• Be a local resident in Singapore
• Be a natural person
• Not be the sole company director as well

Some of the company secretary’s responsibilities include:

• Ensuring that company directors are aware or annual filing deadlines
• Update company directors and shareholders on applicable changes in corporate regulations
• Maintain and update the company’s minutes books and registers
• Implement, attend, and prepare meeting minutes for company directors and shareholders

You must also hire a company auditor within 3 months of incorporation unless exempted under applicable sections of the Company Act.

Share Capital

When you incorporate your private company, you must issue at least S$1 of share capital, or paid-up capital, to your shareholders. Share capital can be issued whether your shareholders make partial or full payment.

Note that companies with paid-up share capital of at least S$500,000 automatically become members of the Singapore Business Federation (SBF).

Registered Office Address

When you submit your application to register your Singapore private company, you must also provide an office address.

This address is where the notices and communications to your company are sent, and where its records and registers are stored. There are requirements for this address:

• Must be open and the public must be able to access it for at least 3 hours daily during regular business hours on business days
• Must be an address in Singapore, but does not have to be the place of operation

You can also use a virtual office as your registered office address, which helps you to maintain a professional corporate image.

Company Constitution

Your company constitution is a legal document that details the rules and regulations on the company’s governance. It includes the rights and responsibilities of the key personnel, such as the company directors, secretary, and shareholders.

It must be submitted when you register your business.

This constitution must have:

• The company name and registered business address
• Business activities and how the operations will be implemented
• Company members’ liabilities
• Total amount of shares issued and share capital
• Rules and responsibilities regarding the governance

After Incorporating Your Singapore Private Limited Company

After you successfully register your private limited company in Singapore, these are the next steps:

Get a Certificate of Incorporation and Free Business Profile

ACRA issues a certificate of incorporation to successfully registered new businesses in the form of an email with your registration number.

This is an important document that is used for business contracts, agreements, and transactions with government agencies. You can request a hard copy by paying a fee of S$50.

You will also get a free business profile that includes basic details of your company, such as its:

• Unique Entity Number (UEN)
• Business name
• Business activities
• Incorporation date
• Information of partners or business holders

Licences and Permits

Depending on the nature of your business, you may need to apply for certain business licences or permits to operate. You can do so and manage them on the GoBusiness Licensing website.

Open a Corporate Bank Account

Since a private limited company is a separate legal entity from its owners, it needs its own corporate bank account. Singapore has a plethora of options available, such as traditional banks (DBS, UOB, OCBC), digital banks, and even neobanks such as Aspire.

Issue Share Certificates

The company secretary has to issue share certificates to the company’s shareholders. This share certificate proves the shares issued to each shareholder and their ownership.

Register Corppass

The Singapore Corppass is a digital identity verification system in Singapore that provides secure access to online government e-services.

You can obtain your Corppass by visiting the official site to establish, manage, and give selected staff access.

Taxation Requirements

You may need to register for Goods and Services Tax (GST) if you reasonably expect your company to earn at least S$1 million in the next 12 months. Otherwise, you may be exempted from doing so.

You can find out more about your GST obligations on the IRAS website.

Register a Trademark

You can also register a trademark to protect your brand value in multiple countries worldwide through the Madrid Protocol. InCorp provides a global trademark registration service that can help you get it set up quickly.

Register Your Private Limited Company in Singapore With InCorp

Overall, setting up a private limited company in Singapore is relatively straightforward if all the necessary steps are followed correctly.

With its attractive business environment, low taxes, and easy access to global markets, it is no wonder why many entrepreneurs choose this country as their preferred destination for setting up their businesses.

You can simplify the setup process by engaging a corporate service provider and registered filing agent such as InCorp to assist you! Our friendly experts are here to help you with the various services you require.

About the Author

InCorp Content Team

InCorp's content team includes talented copywriters from our regional group and globally. We contribute informative, thought leadership, and market-trending articles to guide aspiring business entrepreneurs to a higher level across the Asia-Pacific region.

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