Company formation in Singapore

Before deciding to set up a new company in Singapore, read the information below to understand the characteristics of a Private Limited Company (LTD):

Shareholders: the company is required to have a minimum of 1 shareholder and can have a maximum of 50 shareholders. Shareholders can be a person or another legal entity.

Director: the company must have a minimum 1 director and he must be an individual (not a corporate entity). At least 1 director must be a Singapore resident, which means he/she must be a Singapore citizen, permanent resident or an Employment Pass holder.

Company secretary: it must have at least 1 eligible secretary within 6 months of its incorporation. If the company only has 1 director / shareholder, the company needs to appoint a separate natural individual to become the company’s secretary.

Minimum share capital: the minimum capital requirement is SGD 1 (approx. €0.68). The capital can be raised at any time after registration.

Legal address: the company needs to have a local Singapore address. The address should not be a P.O. Box.

Liability: the liability of its shareholders is limited to the amount of capital they have invested in the company through their shares.

Accounting: Ltd is required to maintain proper accounting records and prepare financial statements in accordance with the Singapore Financial Reporting Standards (SFRS).

Auditor: Singaporean company must employ an auditor within three months from its incorporation date unless it is exempted from audit requirements.

The standard CIT rate is 17% (flat rate).

The company must file 2 CIT Returns with IRAS every year: Estimated Chargeable Income (ECI) and Form C-S/ Form C-S (Lite)/ Form C.

Resident PIT rates:

• First $20,000 - 0%
• Next $10,000 - 2%
• First $30,000 - none
• Next $10,000 - 3.5%
• First $40,000 - none
• Next $40,000 - 7%
• First $80,000 - none
• Next $40,000 - 11.5%
• First $120,000 - none
• Next $40,000 - 15%
• First $160,000 - none
• Next $40,000 - 18%
• First $200,000 - none
• Next $40,000 - 19%
• First $240,000 - none
• Next $40,000 - 19.5%
• First $280,000 - none
• Next $40,000 - 20%
• First $320,000 - none
• Next $180,000 - 22%
• First $500,000 - none
• Next $500,000 - 23%
• First $1,000,000 - none
• In excess of $1,000,000 - 24%

Non-resident tax rates: the tax rate is currently at 24%. It applies to all income including rental income from properties, pension and director's fees, except employment income and certain income taxable at reduced withholding rates.

• The current VAT or GST (Goods and Services Tax) rate in Singapore is 9%.
• GST-registered businesses are required to charge and account for GST at 9% on all sales of goods and services in Singapore unless the sale can be zero-rated (exporting of goods, providing international services) or exempted (the provision of financial services; the supply of digital payment tokens (with effect from 1 Jan 2020); the sale and lease of residential properties; and the import and local supply of investment precious metals) under the GST law.

Double taxation avoidance agreements in Singapore: Albania, Armenia, Australia, Austria, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bermuda, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Fiji, Finland, France, Georgia, Germany, Ghana, Greece, Guernsey, Hong Kong, Hungary, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Jordan, Kazakhstan, Korea, Republic of, Kuwait, Laos, Latvia, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Mongolia, Morocco, Myanmar, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Rwanda, San Marino, Saudi Arabia, Serbia, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Vietnam.