Singapore has a reputation as one of the world’s most business-friendly countries, and foreigners who want to operate in Singapore have an easier time than in some other countries.
However, businesses must meet important administrative requirements. That’s why understanding how to set up a company in Singapore will help ensure compliance.
This article explains how to start a business in Singapore, including structures, costs, and why partnering with Oyster eliminates the need for a local entity.
Types of business in Singapore
Registering a company in Singapore starts with selecting the best business entity. The type of business structure you choose determines liability, corporate tax responsibilities, and compliance complexity. Here are the most common options.
Private limited (Pte Ltd.) company
The most common business structure in Singapore, a private limited company, is a separate legal entity. It entails limited liability and a flat corporate tax rate of 17%, but it comes with some onerous compliance burdens, like appointing a secretary, holding annual meetings, and submitting yearly filings.
Subsidiary company
Subsidiaries are Pte Ltd. companies fully- or majority-owned by a foreign parent corporate entity. Singapore considers subsidiaries separate legal entities, protecting the parent company from liability. Subsidiaries follow the same compliance rules as a Pte Ltd. but are treated as Singaporean resident companies, benefitting from local tax breaks and incentives.
Limited liability partnership (LLP)
Law and accounting firms often set up LLPs in Singapore because this business structure limits the personal liability of the partners. LLPs benefit from streamlined compliance and no direct taxation, instead paying tax on LLP profits at each partner’s individual personal income tax rate.
Sole proprietorship
Sole proprietorship in Singapore comes with minimal compliance responsibility, making it ideal for low-risk endeavors. However, the business owner assumes full personal liability and pays taxes at their personal income tax rate.
Branch office
Unlike subsidiaries, Singapore doesn’t consider branch offices separate legal entities; instead, the parent company has full legal responsibility. A branch office is often not the first choice for foreigners doing business in Singapore because risk is attached to the parent company, compliance requirements are high, and Singapore taxes the branch as a nonresident company.
Benefits of registering a business in Singapore
Company registration in Singapore offers the following strategic advantages for foreigners, founders, and investors:
- Limited liability protection: With a Pte Ltd. company, shareholders can protect personal assets from the business’s financial risks and obligations.
- Access to government grants and incentives: Singapore’s flat 17% corporate tax rate is appealing, but the tax you’ll actually pay is often even lower. The Start-Up Tax Exemption (SUTE) gives new companies up to 75% tax exemption on their first S$100,000 of normal chargeable income for three years; the next S$100,000 gets a 50% exemption. Additionally, Singapore does not levy capital gains taxes and excludes dividends paid to shareholders from taxation.
- Strong intellectual property (IP) protections: Singapore has some of the strongest IP protection laws in the world. It’s part of major IP treaties and provides a secure ecosystem for companies in industries like technology and biotech.
- A tax-friendly gateway to Asia: Singapore has more than 80 double-tax avoidance agreements with other nations, making it a tax-efficient location for international businesses and entrepreneurs. Its proximity to other Asian countries makes it a solid strategic choice to expand and scale internationally.
Costs of setting up a business in Singapore and how to manage them
Though Singapore creates a business-friendly environment, the cost of incorporating a company in Singapore depends on the business structure you choose. Here’s a general breakdown of what to expect as a foreigner starting a business in Singapore.
Business registration fees
This baseline cost is straightforward: No matter the business structure, upfront fees are S$315.
You must pay S$15 to the Accounting and Corporate Regulatory Authority (ACRA) to register the company name. There’s an additional S$300 fee for registering the business.
Essential services costs
Mandatory legal requirements specific to foreigners can increase the cost of doing business in the country. Some requirements are:
- At least one resident director: If no director of your company is Singaporean or a permanent resident, you must appoint a resident director. Businesses commonly fulfill this requirement by going through third-party providers, who typically charge S$1,800 to S$4,000 a year for the service.
- A resident company secretary: Foreigners must appoint a resident company secretary within six months, which runs between S$300 and S$900 annually.
- A registered local address: Every business in Singapore needs a physical business address, and a P.O. box doesn’t count. Authorities need this address to send relevant correspondence, like annual filing reminders or policy change notices. Many companies use a third-party provider that offers a physical registered address (sometimes called a virtual office service). This generally costs between S$150 and S$500 a year, though some basic plans can be less expensive.
Using bundled services from providers
To reduce costs, some foreigners outsource the above essentials to third-party providers that offer bundled service packages. All-in-one corporate setup packages often include the initial S$315 company name and business registration fees, as well as a nominee director, company secretary, and physical address.
A cost-effective alternative is partnering with an Employer of Record (EOR) such as Oyster, which helps execute global expansion without requiring a local entity. Oyster’s EOR service gets your business set up in Singapore and manages key components, such as hiring talent and managing People Ops and Payroll.
How to set up a business in Singapore: 6 steps
Singapore is known for the speed and efficiency of the setup process. You’ll mostly deal with the ACRA and its Bizfile platform. To start the process and receive a business registration certificate, you need a company name, business address, resident director, resident company secretary, and minimum paid-up capital of S$1.
Here are the main steps to take.
1. Choose a business structure
Select a business entity that aligns with your goals, liability risk tolerance, and tax situation. A Pte Ltd. company is the most common type of business structure in Singapore due to its tax benefits and limited liability.
2. Reserve a business name via ACRA Bizfile
You need a unique business name that doesn’t infringe on existing trademarks. Unless there’s an issue with the name (e.g., it contains words such as “bank” or “finance,” suggesting it’s a government entity, or is already in use), it should be approved.
3. Appoint directors, a company secretary, and shareholders
All Pte Ltd. companies must fulfill regulatory requirements, and directors and secretaries must be Singaporean or permanent residents. If not, you must outsource appointments. Business entities in Singapore require at least one shareholder—an individual or corporate entity. Corporate entities can be 100% foreign-owned.
4. Register the business and submit incorporation documents
For this step, you need a registered filing agent to submit your paperwork and pay the S$300 business registration fee on your behalf. ACRA requires a company constitution, director and secretary consent, and proof of identity for all officers.
5. Get a registered office address
ACRA and the Inland Revenue Authority of Singapore (IRAS) use your physical address—not a P.O. box—to send all official correspondence. You can secure an address from a corporate service provider.
6. Open a corporate bank account
After you complete incorporation, ACRA issues an official document—called the Certificate Confirming Registration/Incorporation of Entity—and a Unique Entity Number (UEN). Next, you need a corporate bank account for business transactions and financial recordkeeping.
To open a corporate account, banks require Know Your Customer (KYC) documentation, which can be time-consuming. The process can take several weeks and often requires a meeting with all directors and key shareholders to verify identity.
Compliance requirements
After incorporation, maintain good standing with ACRA and IRAS by focusing on these key compliance considerations:
- Appointing and maintaining a qualified company secretary: Singaporean law requires your business to have a company secretary at all times, who helps to meet all filing deadlines and company statutory requirements.
- Filing annual returns and financial statements: All companies in Singapore must file annual returns within seven months by their fiscal year end. This filing ensures the national registry has updated business information, such as shareholders or board information and the business address. Annual taxes must be filed with IRAS, including an annual corporate tax return (Form C-S/C). Some smaller companies qualify for exemptions from formal audits but must still submit financial statements. Additionally, you must send an Estimated Chargeable Income (ECI) to IRAS every year.
- Maintaining accounting records: The Companies Act 1967 requires all businesses registered in Singapore to save accounting records for at least five years. To stay compliant with Singaporean authorities, these documents must be made available upon request.
- Notifying ACRA of changes to company information: If you make significant changes—such as changing addresses, appointing new directors, or issuing additional capital—you must notify ACRA within 14 days.
Build a presence in Singapore with Oyster
Company registration in Singapore provides many strategic benefits: liability protection, tax advantages, and a base in Asia. However, even amid the country’s pro-business climate, there’s significant mandatory compliance.
For businesses looking to expand in Singapore, Oyster’s Employer of Record solution can get you started. As your EOR, Oyster takes on full responsibility to follow Singapore’s labor laws and eliminates the need for setting up a local entity in the country. Then, you can compliantly hire local talent as full-time employees or contractors, while also taking care of payroll, benefits, and compliance.
If you’re ready to grow your business in Singapore, book a demo with Oyster today.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
