The business sector is an evolving landscape. It has been keeping up with the times, the needs of the market, and even the business plans set up by the entrepreneurs. When you are looking into a company to incorporate in Singapore, you should be well-informed of the changes in the field, including the different business structures.
When you are deciding on a company to incorporate in Singapore, know that you are given various options on how to run your business, whether you are a local resident or a foreign entity. You just have to study carefully the business structures appropriate for the nature of your company so you can maximize the benefits.
Different Business Structures in Singapore
In Singapore, there are three different kinds of business structures to consider when you incorporate a company. These are private limited companies, subsidiary companies, and the branch offices. Let us discuss each one of them.
Private Limited Company
This type of business structure is the most preferred choice among the investors, whether they are residents or foreign entities in Singapore. Why? This structure offers a tax-efficient and dynamic scheme that is truly beneficial to sustain and propel business growth. After all, you want your company to have high profitability and have many resources it needs to keep on operating.
Here are the basic features of a private limited company to incorporate in Singapore:
- The company is allowed to have 1 to 50 shareholders.
- At least one of the company directors should be ordinarily resident. This means that the director must be a Singapore citizen, a permanent resident, or an Entrepass holder.
- The company is set to pay corporate income tax amounting to 0 percent to 17 percent.
- The company has a life of its own, which is usually in perpetual existence.
- The incorporated company is considered a separate legal entity from its shareholders. It means that it has the rights of a natural person.
- The company can engage in the buying and selling of property.
- The company can lodge a legal case against another party. At the same time, it can be sued as well.
- The transfer of ownership of the shares in the company is conducted with ease.
- The company has liability toward its investors, suppliers, customers, and even partner financial institutions.
Through a subsidiary company, the foreign corporate entities can set up their business in Singapore. However, a subsidiary is considered as a separate identity from its parent firm. Still, the latter can own 100 percent of the subsidiary in Singapore.
Under Singapore laws, the subsidiary is deemed as a local company. This means it is entitled to tax benefits, exemptions, and even rebates provided by the appropriate authorities.
At the same time, this company is responsible for its own debts and losses. The parent firm is only liable to the amount representing its share capital.
Unlike the subsidiary, a branch office does not have a separate identity from its foreign parent firm because it is acting only as an extension. With this, the parent company is answerable for all the branch office’s debts and losses. It is also not treated as a local company, exempting it from tax benefits, exemptions, and rebates.
The branch office addresses issues about shareholding, business activities, and structure through the memorandum and articles of association of its parent firm.
What are the Basic Requirements for Company Incorporation?
Here are the requirements you should consider when incorporating a company.
- minimum paid-up capitalization of $1
- at least one shareholder in the company
- at least one local or resident company director
- at least one secretary of the firm
- The registered local address of the business
Professional Help for Your Company
If you are looking to incorporate a company in Singapore, reach out to 3E Accounting. We are a team of excellent professionals who are equipped with the necessary skills and knowledge in the different business disciplines. We are offering services in accounting, taxation, and business support. Our team is ready to help you in every step of the way. Contact us today.