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Frequently Asked Questions
"Facts are cheap, information is plentiful - knowledge is precious" - Michael E. Angier
For you company registration purposes, we have prepared a list of frequently asked questions. What you need to know when incorporating a company in Singapore. For business registration of sole proprietorship business, please go to ACRA site for details.
| Q: |
What is the difference between "Exempt/Deemed Exempt Private Company" and "Gazetted Exempted Private Company"? |
| A: |
Deemed Exempt Private Company means any Exempt Private Company that has less than 20 members, none of them corporate. The status is not specially conferred, it is simply a status by operation of law.
Gazetted Exempt Private Companies, on the other hand, are government-owned companies which to qualify as Exempt Private Company, must be so declared by the Minister in the Gazette, hence the name.
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| Q: |
What is the incorporation procedure, and how long does it take? |
| A: |
Firstly, the availability of the proposed company name is researched. Assuming the name is available, it is then reserved online through the Accounting and Corporate Regulatory Authority (ACRA) website. Details of the Director(s), issued/paid-up capital, shareholder(s) and primary business activities, and contact email address are submitted for the name application. Upon name application approval, the new company can then be incorporated online. Confirmation of incorporation is transmitted via email and message to mobile phone.
The time frame for incorporation (for local director) is usually around 3 days (1 day for name reservation and 2 days for incorporation, subject to all requested information made available to PB Corporate Services beforehand and receipt of payment on our invoice). Occasionally, with foreign Directors on board, the incorporation process can take up to 2 weeks for verification of the foreign Director(s) address and identification.
Upon incorporation, the Directors’ First Board meeting is held to determine and confirm the financial year of the company, appointment of secretarial agent and company officers, auditor (if necessary) and chairman of the meeting.
Incorporation forms, such as Form 45 and Form 49 are also completed for the secretarial records to show that all the company’s officers agree to their responsibilities and terms of appointment. This paperwork is not required by ACRA, but most companies prefer to have hard copies of agreements for the purpose of transparency.
A hard copy of the Certificate of Incorporation, notarised by an ACRA officer, can be ordered from ACRA, if required.
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| Q: |
What information is required prior to incorporation? |
| A: |
| • |
Name, Address & copy of identification document (i.e. passport, NRIC) of proposed Directors and shareholders. |
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Details of issued/paid up capital, with share allotment/percentage. |
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Primary activities of the company. |
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Registered office address & location of the register of members. |
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| Q: |
Are there restrictions on names? |
| A: |
Yes, certain names including references to Government bodies and professional bodies will need justification. A name cannot be registered if it is the same (or sometimes, very similar) as an existing company - unless via successful outcome of appeal based on some clear distinction (e.g. by trade) with that of an existing company.
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| Q: |
What is the minimum number of Directors permitted? |
| A: |
1. Local Resident Director. (A local Director must be a Singapore Citizen, Permanent Resident, or Employment Pass Holder.)
2. If one of the Directors is a foreigner.
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| Q: |
What is the maximum number of Directors permitted? |
| A: |
There is no limitation on the number of Directors on board. However, customization to the Company’s M&AA may be required if the number of Directors exceeds 9.
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| Q: |
Any residential, nationality requirements or professional qualifications for Directors? |
| A: |
No there are no general requirements of residence or qualification (although one of the Directors must be a local resident Director.) Undischarged bankrupts or persons subject to disqualification under the Companies Act Cap 50 cannot act as Director.
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| Q: |
Can the Company act through power of attorney? |
| A: |
Yes
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| Q: |
Are corporate Directors permitted? |
| A: |
Yes
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| Q: |
What is the minimum issued/paid up capital? |
| A: |
$1.00 per shareholder (congruent with currency of paid up capital)
The indicated issued share capital must be paid up immediately upon commencement of business transactions.
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| Q: |
What is the permitted currency of share capital? |
| A: |
Any currency, although issued shares must be in same currency as the paid up capital. The Singapore Dollar is the preferred currency of choice and convenience.
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| Q: |
Registered or bearer shares allowed? |
| A: |
Private Limited companies can only have registered shares. Bearer shares are not allowed.
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| Q: |
What is the minimum number of shareholders? |
| A: |
One. The shareholder(s) can be corporate or individual.
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| Q: |
What is the minimum authorized capital? |
| A: |
There is no requirement to state your authorized capital. Thus, there is no capital duty, except for a flat fee (stamp duty) of S$300 paid to Singapore’s Accounting and Corporate Regulatory Authority (ACRA) to incorporate a new company.
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| Q: |
What are the professional fees for the incorporation of a company? |
| A: |
Please check our incorporation pricelist, inclusive of issue of share certificates, provision of company seal, name reservation fees, stamp duty, and processing fees paid to (ACRA).
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| Q: |
Are licenses required? |
| A: |
Yes, for certain specified groups, which include for banking, insurance, financial services, consumer credit related services and employment and maid agencies.
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| Q: |
Is a resident company secretary required? |
| A: |
Yes. If you have two (2) directors board, the local director can also officiate as the company secretary.
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| Q: |
Are there any specific qualifications required for the company secretary? |
| A: |
No, except for a Public Listed Company
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| Q: |
Is a corporate company secretary permitted? |
| A: |
No.
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| Q: |
Is a registered office required? |
| A: |
Yes, a company incorporated in Singapore must have a registered office in Singapore. PB Corporate Services offers this service, inclusive of mail holding at a nominal fee of S$360.00 per annum.
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| Q: |
Memorandum and Articles of Association of the Company (M&AA)? |
| A: |
Generally, companies are incorporated using ACRA’s standard M&AA template. Specially customized M&AA’s are also acceptable providing the Articles are in compliance with the Companies Act Cap 50.
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| Q: |
What is a private exempt company? |
| A: |
Private Limited companies that have less than 20 shareholders who are individuals and must be solvent. Once there is a corporate shareholder, the company is no longer classified as a private exempt company.
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| Q: |
What documents must be maintained at the registered office? |
| A: |
Certificate of Incorporation & Common Seal
Statutory books & Memorandum & Articles of Association
Register of Members
Accounting Records
(However, Directors can decide to keep them at a different place, the location of which must be agreed by Directors resolution and lodged with ACRA).
PB Corporate Services can supply this service using business address.
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| Q: |
Are the documents available for public inspection? |
| A: |
For Private Limited Companies, documents are not open to public inspection, such as accounts, debentures, names of directors, share capital, particulars of any legal charges. However, some documents are available for inspection to shareholders.
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| Q: |
Where has the first, and subsequent board meeting of directors have to be held? |
| A: |
Anywhere. Although, in order for the Company to be considered as a tax resident in Singapore, the tax comptroller requires board meetings to be held in Singapore.
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| Q: |
Where is the location for general meetings of shareholders and members? |
| A: |
Anywhere.
The first meeting must be held within 18 months from the date of incorporation to accept the Directors Report and audited/FRS accounts.
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| Q: |
Can proxies be appointed? |
| A: |
Yes, to act as representative at Annual General Meetings and/or Extraordinary General Meetings.
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| Q: |
Are there requirements for annual audited accounts to be filed with the local tax (IRAS) and corporate (ACRA) authorities? |
| A: |
An audit is only mandatory if;
i. A company is not private exempt;
ii. Its turnover exceeds 5 million dollars;
iii. Any shareholder with a stake of at least 5% requests one.
However, all private exempt companies must prepare a report with annual account according to Singapore Financial Reporting Standards (FRS), signed by 2 Director(s) on behalf of the company. (Sole director will sign singly).
FRS accounts have to be filed with tax authorities (IRAS).
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| Q: |
How can a company of 2 or more shareholders comply with the law to file the annual return if the company is unable to hold the AGM due to a lack of quorum at the AGM? |
| A: |
The company can apply to file the annual return without holding the AGM of the Company. Guidelines on “Annual General Meetings – Inability to hold meeting” can be found at the ACRA website www.acra.gov.sg under ‘Compliance”.
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| Q: |
Must the company hold its AGM even though it is dormant? |
| A: |
Every company is required to hold its AGM and file its annual return even though it is dormant. However, the law has been amended to allow companies to dispense with AGMs if all the shareholders pass a resolution to do so. Notwithstanding this resolution, a shareholder may still at any time require an AGM to be held even though the resolution to dispense with the holding of the AGM has been passed. Shareholders should consider winding up action or apply to strike off the company if there is no intention to recommence business activities.
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| Q: |
There are 2 directors in the company, a foreign and a local director. The foreign director cannot be contacted despite all attempts made to contact him. Is the local director still responsible for the company? |
| A: |
The law makes no distinction between a nominee director, what is commonly called a managing or executive director or a foreign director. A person who consents to act as a director must discharge his duties as director as required under the Companies Act.
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| Q: |
What is the annual return filing fee? |
| A: |
If PB Corporate Services is not retained as the company’s secretarial agent, our fee for annual return filing (ad hoc basis) is S$450.00. This includes preparation of the Annual General Meeting, compliance forms and ACRA fees.
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| Q: |
How are penalties for late lodgment and composition fines calculated? |
| A: |
The guidelines on penalties and composition fines can be found on ACRA’s website at www.acra.gov.sg under the heading ‘Compliance”.
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| Q: |
If the Director(s) of a company receives a summons to attend court for not filing the company’s annual return by the required date, who can represent the Director(s) if he/she cannot be present for the mention? |
| A: |
A lawyer may represent the Director in court. However, if the Director cannot attend court, the lawyer has to make an application to the court in advance to dispense with his/her attendance.
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| Q: |
If the company’s annual return has already been filed and the composition fine has been paid in respect of the summons issued against the Director. Is the Director still required to go to court? |
| A: |
Court attendance is not required if the Director has settled the composition fine before the mention date and a Warrant of Arrest has not been issued against him/her in respect of the summons.
Court attendance is required if the Director settles the composition fine on the mention date.
Court attendance is required if the Director settled the composition fine before the mention date, but a warrant of arrest had been issued against him/her in respect of the summons. If the Director is unable to attend Court, he/she may apply to the Subordinate Court at least 2 weeks in advance to dispense with his/her attendance in court, via application form from ACRA.
Court attendance is required if the Director made representations, and is are awaiting a reply to the representations.
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| Q: |
Will a Warrant of Arrest be issued when the summons issued was not ‘received’ by the director, e.g. where a director was overseas at that time? |
| A: |
Yes, as long as there is proper service of the summons, e.g. by registered post good service of the summons will be deemed. Summons are served to the directors by registered post.
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| Q: |
What annual tax is levied, and when is it payable? |
| A: |
Companies resident in Singapore are taxed on their income generated from Singapore. Net profits before taxes are taxed at 18% (YA2008). Although, for all newly incorporated Exempt Private Limited companies, there is tax exemption on the first $100,000.00 of taxable income (net profit after tax allowances and tax adjustments), for the first 3 years.
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| Q: |
What are the residential and professional qualifications for the company’s appointed Auditor? |
| A: |
The auditor must be a Singapore Certified Public Accountant.
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| Q: |
Is there tax on bank deposits in local banks? |
| A: |
No.
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| Q: |
What is required to set up a bank account in Singapore? |
| A: |
Firstly, a Director’s Resolution must be passed to agree to the signatory(s) (and, administrator(s) in the case of Internet banking), of the company bank account. A separate Director’s Resolution is required for each type of banking i.e. Checking, Internet, and telephone.
Secondly, the authorized signatory(s) and the Directors who signed the resolution for opening the bank account are required to attend the bank in person to open a new account, with a recent copy of the Company’s business profile, M&AA and Directors’ Resolution. (In the case of a sole Director who is also the signatory, the Company Secretary will be required to attend.)
Most local banks require a minimum deposit of S$1,000.00 for Singapore Dollar Account or USD$1,000.00 for United States Dollar account. Boutique/foreign banks may require a deposit of $10,000 in the respective currencies.
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| Q: |
Do the local banks have confidentiality? |
| A: |
There is no confidentiality ruling in Singapore.
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