Singapore is an amusing country. Foreigners come to this place, view the skyline, taste the hawker food, and believe, Yes. here I set up my empire. And honestly? They’re not wrong. Singapore has always been one of the most favorable nations in the world to do business with and the corporate tax rate of 17 percent tops it all and the government actually appears to be keen to see its businesses succeed. That combination is rare. But here is the place where the majority of people trip on their toe, and the procedure appears easy to go through, and it is, most of the time, until you encounter a detail you were not previously aware of. Before setting up your business, read more about the legal requirements involved.

The Pte. Ltd. Ltd. form, which most citizens choose, is the Private Limited Company, and with reason. Your liability stays capped. The company is a legal person on its own, and it is independent of you as a person. It can be 100 percent owned by a foreigner, which is huge in many Asian regions where joint ventures are a requirement. Paid-up capital? Just SGD 1 to start. Registration is performed through ACRA using the portal known as BizFile+, and under simple circumstances, the approval can be obtained within less than 24 hours. The government fee sits at S$315. None of that is hard. The thing that surprises people is the requirement of a local resident director. Singapore law requires that all companies must have at least one director living ordinarily here citizen, permanent resident or any other person with a valid work pass. When you are operating out of Berlin or Bangkok, then that is a problem that you have to resolve and then nothing else can go forward.

Service companies such as Hub Corporate Services come in here. Hub is an over 20-year-old company that serves the purpose of a Nominee Director at Chinatown Point. Your nominee is on your board, but in a non-executive position, they are not touching your finances, not making an operational decision, and are not signing bank transactions. They are required by the law to be there to enable your company to exist. The arrangement proposing Hub also makes Hub the company secretary; this would be sensible since the two positions overlap very much as far as statutory compliance is concerned. No initial deposit on their part as well which is unlike some of their competitors who require initial security.

By the way, company secretary – that is another position that catches people off guard. The vacancy will be filled within six months of incorporation. Late, directors are liable to fines of up to S$1,000. Your statutory registers, annual general meetings, annual returns submitted to ACRA, and ensuring that directors and shareholders are aware of the looming deadlines are managed by the company secretary. It has an administrative sound, and it is an administrative sound, but the failures in administration in Singapore have actual costs attached to them. IRAS and ACRA do not remind people continuously. Lose your corporate tax return, file your annual return incorrectly, allow your registered address to run out, each of these costs something. The packages offered by Hub include the secretary role, registered address, and compliance filings, thus eliminating the coordination issue. A single company, a single point of contact, all traced.

The tax situation, however, that is where Singapore works it. New companies are eligible to the Startup Tax Exemption Scheme, where the first S100,000 of chargeable income is provided with a tax break of 75, and the second S100,000 of chargeable income with 50 per cent, in the first three consecutive assessment years. There’s no capital gains tax. Dividends issued to the shareholders are usually tax-free on the receiving side. These figures are almost suspicious to a business owner who has been living in a high-tax nation many years. They’re not. They are conscious political decisions Singapore arrived at decades ago and remained with. It is a trick because you need to plan your Financial Year End in the right way at the beginning of the year, since it is the way you establish when all the compliance requirements are due. Do not get advice on this after incorporation. Companies such as Hub will guide you through it, that is exactly the type of set up decision that may appear trivial and it becomes a big issue six months later.