top of page
  • a22162

Setting Up a Local Company

Updated: Jul 17, 2023


Setting Up a Local Company | Bestar
Setting Up a Local Company | Bestar


Setting up a local company in Singapore is a relatively straightforward process. The following are the steps involved:

  1. Choose a company name. Your company name must be unique and cannot be the same as any other company name already registered with the Accounting and Corporate Regulatory Authority (ACRA). You can reserve a company name online through ACRA's BizFile+ portal.

  2. Determine the company type. There are three main types of local companies in Singapore: private limited companies, public limited companies, and unlimited companies. The type of company you choose will depend on your business needs and the number of shareholders you plan to have.

  3. Decide on a financial year end. Your company's financial year end must be between January 1 and December 31.

  4. Appoint directors, company secretary, and other key personnel. Every company in Singapore must have at least one director. You can also appoint a company secretary, who is responsible for maintaining the company's statutory registers.

  5. Set up share capital. The minimum paid-up capital for a private limited company in Singapore is S$1. You can set up share capital in any currency.

  6. Determine the registered office address. Your company must have a registered office address in Singapore. This address can be your own home address or a commercial address.

  7. Draft a constitution. The constitution is the governing document of your company. It sets out the company's objectives, rules, and procedures.

  8. Submit your application to ACRA. You can submit your application to ACRA online through BizFile+.

The cost of setting up a local company in Singapore varies depending on the type of company you choose and the services you use. However, the basic cost is around S$300.


Here is some additional resources that you may find helpful:


Choosing a Company Name


Choosing a company name in Singapore is an important decision. Your company name will be your brand, and it will be how people identify your business. Here are some tips for choosing a good company name in Singapore:

  • Make sure your name is unique. You can check the availability of a company name on ACRA's BizFile+ portal.

  • Choose a name that is easy to remember and pronounce. You want people to be able to remember your company name and say it out loud easily.

  • Use keywords that are relevant to your business. This will help people find your business when they search online.

  • Make sure your name is web-friendly. Your company name should be easy to type into a web browser.

  • Avoid using generic names. Generic names are not memorable or unique, and they may be difficult to trademark.

  • Choose a name that reflects your company's culture and values. Your company name should be a good representation of what your business is all about.

Here are some additional tips for choosing a company name in Singapore:

  • Do your research. Before you choose a company name, it's a good idea to do some research and see what other companies in your industry are called. You don't want to choose a name that is too similar to another company's name.

  • Get feedback from others. Once you have a few potential company names, get feedback from friends, family, and colleagues. See what they think of the names and whether they are easy to remember and pronounce.

  • Be creative. Don't be afraid to get creative with your company name. The best company names are often the ones that are unique and memorable.

These tips will help you choose a good company name in Singapore.


Determining the Company Type


There are three main types of local companies in Singapore: private limited companies, public limited companies, and unlimited companies. The type of company you choose will depend on your business needs and the number of shareholders you plan to have.


Private Limited Company


A private limited company is the most common type of company in Singapore. It is a company that is limited by shares, which means that the liability of the shareholders is limited to the amount of their investment in the company. Private limited companies can have a maximum of 50 shareholders.


Public Limited Company


A public limited company is a company that is limited by shares and can offer its shares to the public. Public limited companies are subject to more stringent regulations than private limited companies.


Unlimited Company


An unlimited company is a company that is not limited by shares, which means that the liability of the shareholders is unlimited. Unlimited companies are not very common in Singapore.


Here is a table that summarizes the key differences between the three types of companies:

​Feature

​Private Limited Company

​Public Limited Company

​Unlimited Company

​Liability of shareholders

​Limited to the amount of their investment

​Limited to the amount of their investment

​Unlimited

​Number of shareholders

​Maximum of 50

​No limit

​No limit

​Ability to offer shares to the public

​No

​Yes

No

Regulatory requirements

​Less stringent

​More stringent

​None


The best way to determine the right company type for your business is to consult with a lawyer or accountant who can help you understand your options and choose the best one for your needs.


Here are some additional factors to consider when determining the company type for your business:

  • The size of your business

  • The number of shareholders you plan to have

  • Your plans for raising capital

  • Your industry

  • Your tax and legal considerations


Deciding on a Financial Year End


Deciding on a financial year end (FYE) is an important decision for businesses in Singapore. The FYE is the date on which the company's accounting year ends. It is important to choose a FYE that is convenient for the business and that meets the requirements of the Singapore Companies Act.


There are a few factors to consider when deciding on a FYE:

  • The business's natural business year. Some businesses have a natural business year, which is the period of time during which they generate most of their revenue. For example, a retail business might have a natural business year that runs from January to December.

  • Tax considerations. The Singapore tax year runs from 1 January to 31 December. If the company's FYE is different from the Singapore tax year, it may need to file its tax returns on a different schedule.

  • Ease of compliance. The company's FYE should be easy to comply with. For example, if the company's FYE is 31 March, it will need to file its annual return and audit report by 30 September.

Here are some tips for choosing a FYE:

  • Consider the business's natural business year. If the business has a natural business year, it may be easier to choose a FYE that coincides with that period.

  • Talk to your accountant. Your accountant can help you understand the tax implications of different FYEs and choose one that is right for your business.

  • Make sure the FYE is easy to comply with. The FYE should be easy to comply with, both for the company and for its auditors.

Once you have considered all of these factors, you can choose a FYE that is right for your business.


Here are some additional considerations when choosing a FYE:

  • The company's industry. Some industries have specific requirements for FYEs. For example, the financial services industry typically has a FYE that ends in December.

  • The company's shareholders. The company's shareholders may have preferences for a particular FYE. For example, some shareholders may prefer a FYE that coincides with the calendar year.

  • The company's future plans. The company's future plans may also affect the choice of FYE. For example, if the company is planning to go public, it may need to choose a FYE that meets the requirements of the Singapore Stock Exchange.

What You have to File each Year


Here are the documents that you have to file each year in Singapore:

  • Annual return: All Singapore-incorporated companies are required to file an annual return with the Accounting and Corporate Regulatory Authority (ACRA). The annual return must be filed within one month of the company's annual general meeting (AGM).

  • Audit report: If the company's annual turnover exceeds S$10 million, it is required to have its financial statements audited by an independent auditor. The audit report must be filed with ACRA within one month of the company's AGM.

  • Change of particulars: If the company changes any of its particulars, such as its name, address, or directors, it must file a change of particulars form with ACRA within one month of the change.

  • Business registration certificate: If the company is involved in certain types of businesses, such as the provision of financial services, it is required to have a business registration certificate. The business registration certificate must be renewed every year.

  • GST return: If the company is registered for Goods and Services Tax (GST), it is required to file a GST return every month or quarter.

  • Income tax return: If the company is liable to pay income tax, it is required to file an income tax return every year.

The specific documents that you need to file each year will depend on your business activities and size. It is important to consult with a lawyer or accountant to ensure that you are filing all of the required documents.


Here are some additional things to keep in mind:

  • The deadline for filing annual returns and audit reports is usually in September.

  • The deadline for filing change of particulars forms is usually in the month following the change.

  • The deadline for filing business registration certificates is usually in the month following the anniversary of the certificate.

  • The deadline for filing GST returns and income tax returns varies depending on the business.

If you fail to file any of the required documents on time, you may be subject to fines or penalties. It is important to stay on top of your filing requirements to avoid any problems.


Appointing Directors, Company Secretary and Other Key Personnel


Every company in Singapore must have at least one director. Directors are responsible for the management of the company and for ensuring that the company complies with the law.

The company secretary is responsible for the administrative and legal aspects of the company. This includes maintaining the company's registers, filing documents with the Accounting and Corporate Regulatory Authority (ACRA), and ensuring that the company complies with its statutory obligations.


Other key personnel that may be appointed by a company include the company's auditor, company treasurer, and company lawyer.


The appointment of directors, company secretary, and other key personnel is governed by the Singapore Companies Act. The Act sets out the requirements for who can be appointed as a director or company secretary, and the procedures for appointing these individuals.


Here are some of the key requirements for appointing directors and company secretaries in Singapore:

  • Directors: Directors must be at least 18 years old and of sound mind. They must also be Singapore citizens, Singapore permanent residents, or foreigners who have a valid work permit or employment pass.

  • Company secretary: The company secretary must be a qualified person who has at least three years of experience in company secretarial work.

The procedures for appointing directors and company secretaries in Singapore vary depending on the type of company. For private limited companies, the directors and company secretary are appointed by the company's shareholders. For public limited companies, the directors are appointed by the company's board of directors, and the company secretary is appointed by the board of directors or by the shareholders.


Once the directors and company secretary have been appointed, they must be endorsed by ACRA. This can be done online through the BizFile+ portal.


It is important to note that the appointment of directors and company secretaries is a serious matter. The individuals appointed to these positions have a significant amount of responsibility, and they must be qualified and experienced. If you are considering appointing directors or company secretaries for your company, it is important to consult with a lawyer or accountant to ensure that you are following the correct procedures.


Share Capital


Share capital is the money that shareholders have invested in a company in exchange for shares. In Singapore, the minimum issued share capital is S$1 when you incorporate a company. The paid-up capital is the amount of money that shareholders have actually paid to the company for their shares.


There are two types of share capital:

  • Issued share capital: This is the total number of shares that have been issued by the company, regardless of whether they have been fully paid up.

  • Paid-up share capital: This is the total amount of money that shareholders have paid to the company for their shares.

The issued share capital can be more or less than the paid-up share capital. For example, a company may issue 100 shares with a par value of S$1 each, but only receive payment for 50 of those shares. In this case, the issued share capital would be S$100, but the paid-up share capital would only be S$50.


There are a few ways to increase share capital in Singapore:

  • Issuing new shares: This is the most common way to increase share capital. The company can issue new shares to existing shareholders or to new investors.

  • Converting debt into equity: If the company has any outstanding debt, it can convert that debt into equity. This means that the debtholders would become shareholders in the company.

  • Consolidating shares: This means combining multiple shares into a single share. This can be done to increase the value of the shares or to make it easier to manage the company's share register.

The decision to increase share capital is a significant one, and it should be made carefully. There are a number of factors to consider, such as the company's financial situation, its future plans, and the impact on shareholders.


Here are some additional details about share capital in Singapore:

  • The authorized share capital is the maximum amount of share capital that a company is allowed to issue. This is no longer a requirement in Singapore, but it was abolished in 2006.

  • The par value of a share is the nominal value of the share. This is the amount that is stated on the face of the share certificate.

  • The market value of a share is the price that the share is currently trading for. This can be different from the par value of the share.


Shares and Shareholders


Shares and shareholders are an important part of the corporate structure in Singapore. Shares represent ownership of a company, and shareholders are the owners of the company.


Shares


A share is a unit of ownership in a company. When an individual buys shares in a company, they become one of its owners. The number of shares that an individual owns determines their percentage of ownership in the company.


There are two types of shares in Singapore: ordinary shares and preference shares.

  • Ordinary shares are the most common type of shares. They give shareholders the right to vote on important company decisions and to receive dividends (a share of the company's profits).

  • Preference shares give shareholders certain preferential rights over ordinary shareholders. For example, preference shareholders may have the right to receive dividends before ordinary shareholders, or they may have the right to be repaid their investment before ordinary shareholders if the company is liquidated.

Shareholders


A shareholder is an individual or entity that owns shares in a company. Shareholders have a number of rights, including:

  • The right to vote on important company decisions

  • The right to receive dividends

  • The right to transfer their shares to another person

  • The right to inspect the company's books and records

Shareholders also have certain responsibilities, such as:

  • Paying for their shares

  • Complying with the company's constitution

  • Acting in the best interests of the company

Regulation of Shares and Shareholders in Singapore


The Companies Act 2016 regulates shares and shareholders in Singapore. The Act sets out the requirements for issuing shares, the rights and responsibilities of shareholders, and the procedures for transferring shares.


The Accounting and Corporate Regulatory Authority (ACRA) is the government agency responsible for enforcing the Companies Act. ACRA maintains a register of all companies in Singapore, including information about their shareholders.


Registered Office Address


A registered office address is a physical address in Singapore where all communications and notices to a company are addressed to, and where the company's registers and records are kept. It is a requirement for all companies incorporated in Singapore, whether local or foreign.

The registered office address must be:

  • In Singapore

  • A physical address, not a PO Box address

  • Open and accessible to the public during normal business hours

The registered office address does not have to be the same as the company's principal place of business. For example, a company's registered office address may be in Raffles Place, while its principal place of business may be in Tuas.

There are a few different ways to obtain a registered office address in Singapore. You can:

  • Rent a physical office space

  • Use a virtual office service

  • Use the address of a registered agent

If you rent a physical office space, you will need to ensure that the address meets the requirements of the Companies Act. If you use a virtual office service, the service will provide you with a physical address and access to a shared office space. If you use the address of a registered agent, the agent will act as a mailbox for your company and will forward any communications to you.

It is important to choose a registered office address that is convenient for you and your employees. You should also choose an address that is in a safe and secure location.

Here are some of the benefits of having a registered office address in Singapore:

  • It gives your company a physical presence in Singapore.

  • It makes it easier for you to receive communications and notices from government agencies.

  • It makes it easier for you to conduct business with other companies in Singapore.

  • It can help to improve your company's credibility.


Constitution


The constitution of a company is a document that sets out the company's rules and regulations. It is a vital part of setting up a local company in Singapore, as it defines the company's structure, management, and operations.


The constitution must include the following information:

  • The name of the company

  • The registered office address of the company

  • The business activities of the company

  • The authorized share capital of the company

  • The number of issued shares

  • The rights and responsibilities of the shareholders

  • The rules for appointing and removing directors

  • The procedures for holding meetings of the shareholders and directors

  • The procedures for winding up the company

The constitution can be customized to meet the specific needs of the company. However, it is important to ensure that the constitution complies with the Companies Act 2016.


There are a few different ways to create a constitution for a company. You can:

  • Use a template constitution

  • Hire a lawyer to draft a constitution for you

  • Do it yourself

If you are using a template constitution, you will need to make sure that it is tailored to the specific needs of your company. If you are hiring a lawyer, they will be able to draft a constitution that meets your specific needs and complies with the Companies Act. If you are doing it yourself, you will need to be familiar with the Companies Act and the requirements for a constitution.


Once the constitution is drafted, it must be signed by all of the shareholders. The constitution is then filed with the Accounting and Corporate Regulatory Authority (ACRA).


The constitution is an important document that will govern the company for many years to come. It is important to take the time to create a constitution that is tailored to the specific needs of the company and complies with the law.


Here are some of the benefits of having a constitution for a company:

  • It provides clarity and certainty for the shareholders and directors of the company.

  • It helps to avoid disputes between the shareholders and directors.

  • It can help to protect the company from legal challenges.

  • It can help to attract investors and partners.

If you are setting up a local company in Singapore, it is important to have a constitution. The constitution will help to ensure that the company is managed effectively and that the shareholders and directors are protected.


Submitting your Application via BizFile+


Here are the steps on how to submit your application via BizFile+:

  1. Go to the BizFile+ website and log in using your SingPass.

  2. Click on the "eServices" menu and select "Local Company".

  3. Click on "Start a New Local Company".

  4. Complete the form and upload the required documents.

  5. Pay the application fees.

  6. Click on "Submit".

Here are the required documents for submitting an application via BizFile+:

  • A copy of the constitution of the company.

  • A copy of the resolution of the shareholders appointing the directors.

  • A copy of the identity card or passport of each director.

  • A copy of the residential address of each director.

  • A copy of the company's seal.

The application fees for submitting an application via BizFile+ are as follows:

  • Application for new company name: S$15.

  • Incorporation of local company: S$300.

The processing time for an application submitted via BizFile+ is typically 3-5 working days.


Here are some tips for submitting your application via BizFile+:

  • Make sure that you have all of the required documents before you start the application process.

  • Double-check your information before you submit the application.

  • Pay the application fees using a credit/debit card, PayPal, Apple Pay, or Google Pay.

  • Keep a copy of the application form and the payment receipt for your records.


Other important information


Here are some other important information to consider when setting up a local company in Singapore:

  • Business activities: You will need to specify the business activities that your company will be engaged in. This will determine the type of company that you can incorporate.

  • Authorized share capital: The authorized share capital is the maximum amount of share capital that your company is allowed to issue. You can specify any amount for the authorized share capital, but it is important to note that the minimum issued share capital is S$1.

  • Number of directors: The number of directors that your company must have depends on the type of company that you are incorporating. For an exempt private company, you must have at least one director. For a public company, you must have at least three directors.

  • Company secretary: You must appoint a company secretary for your company. The company secretary is responsible for ensuring that the company complies with the Companies Act and other relevant laws.

  • Registered office address: You must have a registered office address in Singapore for your company. The registered office address is the address where all communications and notices to the company will be sent.

Here are some of the government agencies that you may need to interact with when setting up a local company in Singapore:

  • Accounting and Corporate Regulatory Authority (ACRA): ACRA is the government agency responsible for registering companies and businesses in Singapore.

  • Inland Revenue Authority of Singapore (IRAS): IRAS is the government agency responsible for collecting taxes in Singapore.

  • Singapore Customs: Singapore Customs is the government agency responsible for collecting import and export duties in Singapore.


Maintaining Company Registers


Companies in Singapore are required to maintain certain registers, as stipulated by the Companies Act 2016. These registers are important records that provide information about the company's shareholders, directors, and other key stakeholders.


The following are the statutory registers that companies in Singapore are required to maintain:

  • Register of Members (MGT-1): This register contains information about the company's shareholders, such as their names, addresses, and shareholdings.

  • Register of Directors and Secretaries (MGT-2): This register contains information about the company's directors and secretaries, such as their names, addresses, and dates of appointment.

  • Register of Registerable Controllers (RORC): This register contains information about the company's registrable controllers, which are individuals or entities that have significant control over the company.

  • Register of Foreign Companies (MGT-3): This register contains information about the company's foreign companies, such as their names, addresses, and the dates on which they became associated with the company.

  • Register of Debentureholders (MGT-4): This register contains information about the company's debentureholders, such as their names, addresses, and the amounts of their debentures.

  • Register of Shareholdings (MGT-5): This register contains information about the company's shareholdings, such as the number of shares held by each shareholder and the date on which they were acquired.

Companies are required to keep these registers up-to-date and to make them available for inspection by shareholders, creditors, and other interested parties. The registers must be kept in either electronic or hard copy format, and they must be stored in a secure location.


Failure to maintain the statutory registers properly can result in penalties from ACRA. These penalties can include fines, imprisonment, or both.


Here are some tips for maintaining company registers in Singapore:

  • Keep the registers up-to-date: This means updating the registers whenever there are any changes to the information they contain, such as changes to shareholder details, director appointments, or foreign company associations.

  • Store the registers in a secure location: The registers should be stored in a secure location where they cannot be easily accessed by unauthorized persons.

  • Make the registers available for inspection: Shareholders, creditors, and other interested parties should be able to inspect the registers upon request.

By following these tips, you can help to ensure that your company's statutory registers are properly maintained and that you are in compliance with the Companies Act 2016.


Other Obligations


In addition to the requirements mentioned earlier, there are other obligations that you need to consider when setting up a local company in Singapore. These include:

  • Holding annual general meetings (AGMs): Companies in Singapore are required to hold AGMs at least once a year. The AGM is a meeting of the company's shareholders where they can discuss and vote on important matters, such as the company's financial performance, the appointment of directors, and the declaration of dividends.

  • Filing annual returns: Companies in Singapore are required to file annual returns with ACRA. The annual return is a document that provides information about the company's activities, such as its financial performance, its directors, and its shareholders.

  • Paying taxes: Companies in Singapore are subject to a variety of taxes, including corporate income tax, goods and services tax (GST), and property tax. It is important to make sure that you are aware of the taxes that your company is liable for and that you are paying them on time.

  • Complying with employment laws: Companies in Singapore are required to comply with a variety of employment laws, such as the Employment Act and the Industrial Relations Act. These laws govern matters such as working hours, overtime pay, and leave entitlements. It is important to make sure that you are aware of the employment laws that apply to your company and that you are complying with them.

By fulfilling these obligations, you can help to ensure that your company is properly registered and that it is in compliance with the law. This will help to protect your company from legal challenges and to boost its reputation.


Here are some additional tips for setting up a local company in Singapore:

  • Get professional advice: It is a good idea to get professional advice from a lawyer or accountant who is familiar with the laws and regulations governing companies in Singapore. This will help you to ensure that you are complying with the law and that you are making the best decisions for your company.

  • Do your research: It is important to do your research before you set up a company in Singapore. This includes understanding the different types of companies that can be incorporated in Singapore, the requirements for incorporation, and the costs involved.

  • Plan ahead: It is important to plan ahead when setting up a company in Singapore. This includes having a clear understanding of your business goals, the market you want to target, and the resources you need.

How Bestar can Help Setting Up a Local Company


Bestar is a company that specializes in helping businesses set up and operate in Singapore. They offer a wide range of services, including:

  • Company incorporation

  • Compliance and regulatory advice

  • Accounting and taxation services

  • HR and payroll services

  • Business registration and licensing

  • Office space rental

  • Business immigration services

Bestar can help you with every step of the process of setting up a local company in Singapore, from choosing the right business structure to registering your company with the relevant authorities. They have a team of experienced professionals who can guide you through the process and ensure that your company is compliant with all applicable laws and regulations.


Here are some of the specific ways in which Bestar can help you set up a local company in Singapore:

  • Advise you on the best business structure for your needs. There are different types of business structures available in Singapore, and the best one for you will depend on your specific circumstances. Bestar can help you assess your needs and recommend the right business structure for your company.

  • Assist you with the company incorporation process. This includes preparing the necessary documentation, filing the application with the Accounting and Corporate Regulatory Authority (ACRA), and obtaining the company's registration number.

  • Help you with compliance and regulatory matters. As a business owner in Singapore, you will need to comply with a number of laws and regulations. Bestar can help you stay up-to-date on the latest requirements and ensure that your company is compliant.

  • Provide accounting and taxation services. Bestar can handle your company's accounting and taxation needs, including preparing financial statements, filing tax returns, and managing your tax compliance.

  • Offer HR and payroll services. Bestar can help you with your company's HR and payroll needs, including recruiting and hiring staff, managing payroll, and providing employee benefits.

  • Assist you with business registration and licensing. If you need to register your business with any government agencies or obtain any licenses, Bestar can help you with the process.

  • Rent office space for your business. Bestar has a network of office space providers, and they can help you find the right office space for your company's needs.

  • Provide business immigration services. If you need to bring foreign employees to Singapore to work for your company, Bestar can help you with the immigration process.

Bestar is a trusted advisor to businesses of all sizes, and they have a proven track record of helping businesses succeed in Singapore. If you are considering setting up a local company in Singapore, Bestar is a great place to start.


Here are some of the benefits of working with Bestar:

  • Expertise: Bestar has a team of experienced professionals who can help you with every step of the process.

  • Convenience: Bestar can handle all of the paperwork and legal requirements, so you can focus on running your business.

  • Cost-effectiveness: Bestar's services are competitively priced, and they offer a variety of payment options.

  • Peace of mind: Knowing that your company is in good hands with Bestar will give you peace of mind so you can focus on growing your business.

If you are interested in learning more about how Bestar can help you set up a local company in Singapore, please contact us to schedule a consultation.


Let us know if you have any other questions.




poet www.acra.gov.sg how to guides setting up a local company

4 views0 comments

Recent Posts

See All
bottom of page