Setting Up a Company in Singapore Key Points for Foreign Individuals and Businesses

Setting Up a Company in Singapore Key Points and Details Foreign Individuals and Businesses Must Know

In recent years, with the evolving global economic landscape and the continuous growth of Southeast Asian markets, Singapore has become a top destination for many foreign individuals and businesses looking to establish a company. Thanks to its stable environment, efficient legal system, and strategic geographical location, Singapore continues to strengthen its position as an international business hub. According to data released by Enterprise Singapore, the number of newly registered companies in Singapore increased by more than 12% year-on-year in 2025, with a significant rise in the proportion of foreign-invested enterprises.

For foreign individuals and businesses considering company registration in Singapore, understanding the relevant regulations and procedures is crucial. This article will detail the key points to consider when setting up a company in Singapore, focusing on company types, shareholder and director requirements, tax systems, bank account opening, and work visa policies.

1. Choosing the Right Company Structure

The most common business entity in Singapore is the Private Limited Company Pte Ltd. This structure offers limited liability protection and is suitable for most small and medium-sized enterprises. Foreigners can also choose to set up a branch office, representative office, or partnership. However, due to its limited liability and ease of raising capital, the Private Limited Company remains the most popular option.

For foreign companies that wish to test the market without committing to long-term investment, establishing a representative office is a low-risk alternative. However, representative offices are not allowed to engage in profit-making activities and typically have a validity period of three years.

2. Shareholder and Director Requirements

According to the Accounting and Corporate Regulatory Authority ACRA, at least one local director is required to incorporate a Private Limited Company in Singapore. The director must be a natural person aged 18 or above and usually resides in Singapore-such as a Singapore citizen, permanent resident, or a foreigner holding an Employment Pass EP.

This means that foreign investors who do not reside in Singapore can fulfill the legal requirement by appointing a local resident as a nominee director. A company can be 100% foreign-owned, and there is no requirement for a local shareholder. This policy significantly facilitates foreign investment.

3. Minimum Capital and Paid-up Capital

Under Singapore’s Companies Act, the minimum paid-up capital required to set up a company is just SGD 1. There is no mandatory requirement for actual capital to be injected upfront. Shareholders can inject capital progressively as the business develops. This flexible capital system lowers the barrier to entry and provides greater flexibility in capital allocation.

4. Tax Advantages

Singapore is known for its low corporate tax rate and extensive network of tax treaties. The corporate income tax rate is 17%, significantly lower than in many developed countries. Additionally, Singapore operates a territorial tax system, meaning only income sourced in Singapore is subject to taxation.

Newly incorporated companies can also enjoy tax exemptions on the first SGD 300,000 of taxable income. For foreign individuals working in Singapore under a valid work visa, their income will be taxed at the personal income tax rate, which is also relatively low.

Singapore has signed double taxation avoidance agreements with more than 80 countries, helping to optimize the tax treatment of cross-border income.

5. Opening a Corporate Bank Account

After completing company registration, the next critical step is to open a corporate bank account in Singapore. Although Singapore is home to internationally renowned banks such as DBS Bank, OCBC Bank, and UOB, the account opening process is quite strict, especially for non-residents.

Typically, banks will require documents such as the company’s incorporation certificate, director’s identification, business plan, and proof of source of funds. Some banks may require directors to be physically present for account opening. However, with the development of remote onboarding technology, some banks now allow video-based account opening, provided that sufficient identity verification and compliance documentation are submitted.

6. Work Visas and Employment Passes

Foreigners planning to manage their business in Singapore long-term must apply for the appropriate work visa. Common options include the Employment Pass EP, S Pass, and Entrepreneur Pass EntrePass. Among these, the EntrePass is designed for foreign entrepreneurs wishing to start a business in Singapore. It has relatively flexible eligibility criteria, requiring only a viable business plan and a minimum investment.

According to the Ministry of Manpower MOM policy updates in early 2025, the EntrePass application process now places greater emphasis on the applicant’s entrepreneurial background and the sustainability of the proposed business. When preparing application materials, it is advisable to highlight the innovation and market potential of the business idea.

7. Compliance and Annual Reporting Obligations

Singapore has high compliance standards for businesses. Companies are required to submit annual financial statements and tax filings to ensure compliance with ACRA and the Inland Revenue Authority of Singapore IRAS. Late filings may result in fines or even the deregistration of the company.

To avoid compliance risks, it is recommended that companies engage professional accountants or corporate secretarial services to assist with ongoing compliance matters.

Conclusion

While the process of registering a company in Singapore is relatively transparent and investor-friendly, it involves numerous details and strict compliance requirements. For foreign individuals and businesses, thoroughly understanding the regulations, strategically planning the company structure, and preparing compliance documents in advance are essential for a successful setup.

As Singapore continues to strengthen its position as a business hub in Asia, seizing this opportunity can provide long-term growth potential for global enterprises.