Pre-Registration – What You Need to Know Featured

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 A practical thought

One of the question people sometimes ask us is – what if all this venture does not go as per my expectations ? What if I register company and operate it for 2-3 years but somehow it's not going anywhere - Can I exit out of it easily ?

Sure. In an unfortunate case, if the things don't work out as expected you can always liquidate or strike of the company (meaning effectively close the company) and take back whatever funds are there in the company accounts back to your home country. The cost of striking off of the company is usually between 600-1000 SGD.

 


Nominee Director Service

What is a Nominee Director ?

Nominee is "a person or organization in whose name a position or an asset is registered though true ownership is held by another party".

As you can see a nominee director is a Singapore citizen or a permanent resident which we provide only for the namesake to satisfy the legal requirement. Other than providing his name as a director and besides signing some forms during incorporation process this nominee director is in no way involved in your business.

Some of the concerns entrepreneur or Nominee Director has ;

1. What this nominee director can and cannot do ?

2. Will he have authority to withdraw any funds from the bank account ?

3. Will he be taking any business decisions ? Will he interfere in my business ?

At the same time the nominee director also has a concern like ;

1. What if this company engages in any business activities which are illegal in Singapore

2. What if this company does not pay nominee director charges on time ?

Indemnity agreement

To solve these above concern an indemnity agreement is signed between the foreign entrepreneur and Global Links Asia as a Nominee Director service provider. This agreement principally states ;

1. Foreign entrepreneur also to be listed as director of the company (note Singapore requirements to have at least 1 resident director , but in addition to this any number of foreign directors can be appointed).

2. This foreign director (means you) will be responsible for all the operations of the company

3. This foreign director will ensure all the laws of Singapore are followed

4. Nominee director will not be involved in any operations of the company

5. Company to provide printed bank statements to nominee director periodically (This gives an assurance to nominee director that company is in genuine business).

Duration of nominee director service

This will entirely depend on your business plan. If you plan to operate your Singapore company primarily from your home country then you will need nominee director service on an annual basis.

Instead if you plan to relocate any staff to Singapore after incorporating , and if he is ready to be director in this new company then possibly you need nominee director service for a shorter duration of 3 months to 6 months. In this period your visa for relocation need to be processed.

Deposit for nominee director services

Please note that in Singapore, a Nominee Director has the same responsibilities as any other director. Therefore providing a nominee director for your company imposes certain responsibilities on us. To protect our side, in addition to the indemnity agreement as stated above we also collect 2500 SGD as security deposit. This deposit is returned to you on discontinuation of nominee director service.

*** Caution

When you select a professional company in Singapore to provide nominee director service ensure that the firm carry out proper background check on their prospective clients before accepting the work.

Most of the professional firms provide these kind of services often to many clients. In these cases same person may appear as a nominee director for many companies. It is possible that he might be director of some other company which is engaged in not so proper business activities. So even though your company and that other company has nothing in common, the mere fact that both has same nominee director can become an unnecessary trouble for you

 

Type of Subsidiary Company in Singapore

When companies want to open a subsidiary in Singapore, you may concern what type of subsidiary company can be set up. Generally, when we refer to company usually it means a private company. However in Singapore there are actually 4 types of companies which are explain below.

 

 

Aspect

Your most likely choice

 

Kind

Exempt Private Company

Private Company

Public Limited Company

Public Company Limited By Guarantee

Definition

Dose not have more than 20 shareholders and none of them is a company

This is locally incorporated company where the maximum of shareholders is limited to 50. It can be another company as shareholder.

The number of shareholders can be more than 50. It can have another company as a shareholder.

Usually setup for

charitable work.

It does not have

any shareholding.

Subscribing members give guarantee to the amount

specified.

Minimum share capital

1SGD

1 SGD

51 SGD

NA

100% foreign shareholding allowed

Yes

Yes

Yes

Yes

Audit of account require

No if annual revenue below 5 million SGD

Yes

Yes

Yes

What needs to be filed annually to ACRA ( Singapore Corporate Registry)

If assets of the company > liabilities ( the company is solvent), then no need to file accounts with ACRA. Only a statement of solvency need to be filed

Must file accounts

with ACRA every

year

Must file accounts

with ACRA every

year

Must file accounts

with ACRA every

year

 

 

Key facts about company formation

  • Company Name.  The name must be approved before incorporation of the Singapore company can occur.
  • Directors.  A minimum of one resident director (a resident is defined as a Singapore Citizen, a Singaporean Permanent Resident, or a person who has been issued an Entrepass, Employment Pass, or Dependent Pass) is mandatory. There is no limit on the number of additional local or foreign directors a Singapore Company can appoint. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. There is no requirement for the directors to also be shareholders,  i.e. non-shareholders can be appointed directors.
  • Shareholders.  A Singapore private limited company can have a minimum of 1 and maximum of 50 shareholders. A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity such as another company or trust. 100% local or foreign shareholding is allowed. New shares can be issued or existing shares can be transferred to another person anytime after the Singapore company has gone through the incorporation process.
  • Company Secretary.  As per Section 171 of the Singapore Companies Act, every company must appoint a qualified company secretary within 6 months of its incorporation. It has to be noted that in case of a sole director/shareholder, the same person cannot act as the company secretary. The company secretary must be a natural person who is ordinarily resident in Singapore.
  • Paid-up Capital.  Minimum paid-up capital for registration of a Singapore company is S$1. Paid-up capital (also known as share capital) can be increased anytime after the incorporation of the company. There is no concept of Authorized Capital for Singapore companies.
  • Registered Address.  In order to register a Singapore company, you must provide a local Singapore address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address) and cannot be a P.O. Box.
  • Taxation. Singapore registered companies enjoy very attractive tax exemptions and incentives. Your company pays less than 9% for the first S$300,000 annual profits and 17% flat after that. There are no capital gains or dividend taxes on Singapore companies. Excellent tax benefits and business reputation of Singapore are the key reasons why entrepreneurs from around the world prefer to form a company in Singapore. For further information on taxes, refer to the Singapore corporate tax guide.

    *** What is GST?

GST stands for goods & services tax. It is usually known by names of sales tax, Value added tax, Mod VAT in other countries. Basically, if you buy or sell any products or services in Singapore then this tax will be applied. The rate of tax is uniform at 7%. In that sense we can say that Singapore has much simplified GST structure compared to many other countries. To make things even simpler for small business, the GST registration and liability arises only if your turnover in Singapore exceeds or is expected to exceed 1 million Singapore dollars in a year. As a result, many small businesses are not liable to GST. Similarly, in case of export of goods out of Singapore or in case of high seas sales (where goods are shipped by parent company, and delivered directly to end customer while raising invoice from Singapore entity) are subject to 0% GST. If your operations are subject to GST then Global Links Asia consulting service can you help you to do registration and ongoing reporting?

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Global Links Asia

Support to Incorporate companies in Singapore, ...

Viet Nam office: 151 Dao Duy Anh St., Phu Nhuan dist., Ho Chi Minh city, Viet Nam

Singapore office: 171 Chin Swee Road, #02 CES Center, Singapore 169877

Hotline: (+84) 0938 531 588   (+65) 3163 4102   

Website: www.globallinks.asia
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