Benefits and features of Starting a Business in Singapore
In Singapore, the common types of business entities are the sole proprietorship, partnership, private limited company and public limited company with the private limited company being the most common and favorite.
This is because the private limited company is a different legal entity from its owners (shareholders). This allows you to limit your risk as compared to sole proprietorship or partnership business setup. Furthermore, the procedure for Singapore company registration is not complicated.
A Singapore company that is private limited is easily identified as it will have the abbreviations “Pte Ltd” in its name.
Features and Benefits of a Private Limited Company
1)The owners or shareholders can be local individuals or foreigners or other companies
2) It is a different legal entity from the owners, so:
* The liability of the shareholder is limited to the number of shares he/she holds;
* The company can take legal or face action;
* The company can own property.
3) The company can have up to 50 shareholders.
4) The company must have at least one director to manage it on behalf of the shareholder. It is possible for the director to also be a shareholder.
5) For tax planning, the company has several benefits that makes it attractive, namely:
*Tax exemption scheme for new start-up companies– In the first 3 years from the date of company registration, the company can benefit from the government’s tax incentive with an effective tax rate of 5.67% on the first S$300,000 of chargeable income. For this, the company must have at least one shareholder who is an individual, holding a minimum 10% shares.
*Partial tax exemption scheme for companies– for companies that do not qualify for the “tax exemption scheme for new start-up companies”, it will then qualify for partial tax exemption. Under this scheme, the company can enjoy a tax rate that is effectively 8.36% on the first S$300,000 of chargeable income.
*For both schemes, chargeable income in excess of S$300,000 will be taxed at the prevailing corporate tax rate of 17%.
Requirements for starting a Private Limited Company
– The company needs a minimum one director and one secretary, both must be Singapore local residents.
– The company will need a Singapore address for its registered office.
– Paid-up capital of at least S$1.
The following information would be required to register a company
- * Preferred name of business entity
- * Description of its business activities
- * Particulars of:
- – Shareholders
- – Directors
- – Company secretary
- * Singapore address of the registered office of the proposed company
- * Memorandum and Articles of Association (MAA). If you do not have one, the standard MAA will be provided.
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