14 July 2017
Establishing a Presence in Singapore
Hong Kong companies are allowed to invest freely in Singapore, and a presence in Singapore can be either:
1. A foreign-owned company; or
2. A branch or representative office.
The key steps for both of these options are provided below and further information can be found in the How To Guides available on ACRA’s website.
Setting up a Foreign Owned Company
A Hong Kong company or resident who wants to set up a company in Singapore must first either appoint a locally resident director, or obtain the necessary work permit from the Ministry of Manpower. The World Bank’s 2017 Doing Business report ranks Singapore as one of the easiest countries to start a business (ranked sixth out of 190 economies), reporting that it takes only two and half days and requires the following three procedures:
1. Register online with ACRA through Bizfile, an electronic filing system. ACRA will issue a notice of incorporation and the registration number of the company. Bizfile provides a one-stop business facilitation service at the point of registration which includes:
• Reserving domain names. An application fee of SG$15 (US$11) is applicable for each approved company name.
• Registration with the Inland Revenue Authority of Singapore (IRAS) for the goods and services tax (GST).
• Activating a Customs Account and application for a corporate bank account.
• Purchase of the Business Profile at a cost of SG$300 (US$216).
2. Make a company seal at a cost between SG$40 (US$29) and SG$70 (US$50). This generally takes between one and three days.
3. Sign up for Employee Compensation Insurance at an insurance agency. This is a mandatory requirement under the Work Injury Compensation Act.
All companies must prepare financial statements in accordance with the Singapore Accounting Standards.
Setting up a Branch or Representative Office (RO)
Business activities are limited to the activities of the foreign company, which is ultimately responsible for any liabilities arising from the business operations of the Singapore branch office.
Each branch should have at least one authorised representative who is ordinarily resident in Singapore.
Register with ACRA through Bizfile.
Registrations fees total SG$315 (US$227) and are usually processed within one day.
An RO is not allowed to undertake revenue generation activities on behalf of the foreign company and the following criteria must be met:
• Sales turnover of the foreign company must be greater than US$250,000.
• Operation in Singapore is limited to a maximum of three years from its commencement date, and RO status must be reviewed and renewed annually.
• Number of staff employed by an RO must be greater than 5 people.
Register with the International Enterprise of Singapore, a department of the Ministry of Trade and Industry (MOTI).
Registration fees are SG$200 (US$144) and must be paid annually. Evidence of incorporation and the latest audited accounts must be provided upon registration.
ROs which decide to continue their presence in Singapore after three years should register their operations with ACRA.
International Enterprise of Singapore (IES), under MOTI, is the entity responsible for developing Singaporean companies and assisting them in exporting to overseas markets. IES offers financial and non-financial assistance such as tax incentives, grants and market knowledge. One initiative is the Global Trader Programme which provides a reduced corporate tax rate on qualifying trading income of 5% or 10% for three or five years.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further information