A Foreigner’s Guide to Setting Up a Company in Singapore from Hong Kong Within an Hour

9 min read

If you’re reading this, you’re pretty set about starting a new company in Singapore from Hong Kong. As a foreigner, you might have a lot of questions like “Is it easy to register a company in Singapore?”

We've compiled answers into a simple guide. Learn how to grab hold of the opportunity and get your Singapore company registered within an hour, right from wherever you are in Hong Kong. No plane trip needed!

Why is Singapore such a good place to start a business?
What do I need to start a company in Singapore from Hong Kong?
What business structures are available for me to register in Singapore?
Do I have to come to Singapore to open a company?
How long does it take to register a company in Singapore?
Can I move to Singapore if I open a business there?
Is it mandatory to have employees in Singapore?
How much does it cost to set up and run a company in Singapore?
What taxes will I pay?
Can I prepare and file paperwork requirements myself?

Why is Singapore such a good place to start a business?

A firm can be incorporated as quickly as an hour in the Lion City, while this process takes up to a day in Hong Kong. This is because, in Singapore, the information needed by local government agencies to incorporate a company can be done online, while in Hong Kong a bottleneck would usually occur when some documents have to be signed and filed in person.

Here are some more reasons to register here:

1. Taxes are low, the treaty network is extensive, and there is no tax on capital gain.

2. Registering a company can be done in an hour.

3. A foreigner can own 100% of a Singapore company.

What do I need to start a company in Singapore from Hong Kong?

In short you will need the following:

1. Company name

2. Physical Singapore address

3. Corporate Secretary

4. Resident Director

5. Shareholder

6. Paid-up capital

1. Company name

A company name has to be unique. Come up with a brand new word or combination of words, and register with ACRA, the Accounting and Corporate Regulatory Authority of Singapore, the national agency that registers and oversees the business. If you want to register a name fast, do not use words like ‘finance’, ‘media’, ‘education’, ‘Singapore’, ‘security’ or ‘international’. They refer to the types of businesses regulated by separate government authorities, so ACRA will send your application to the relevant authorities for review. The name may still be approved but takes a couple of weeks longer.

2. A physical Singapore address

A Singaporean company must have a registered address. It has to be a real office mailbox that you regularly check. Most companies make use of corporate service providers for a fee to register office addresses. ACRA needs this address to contact your company by post and other means.

3. Corporate Secretary

Every company must have a corporate secretary. It is an officer who tracks changes in your company’s structure and top management, compiles papers, and reports to the government about your business. Make sure that the person you hire for this role is qualified and have experience in handling the duties of the job. They would also need to be familiar with Singapore’s Company Act.

You need to appoint one within 6 months of the date of company incorporation, but you can do it right away to have the officer manage your incorporation papers. If you are the sole shareholder and resident director, you cannot be the corporate secretary.

4. Resident Director

Foreigners need a work pass like an Entrepreneur Pass to act as your company’s local director. If you don’t have a work pass yet, you can choose to appoint a Nominee Director (or ND). The ND does not play any role in your day-to-day operations. They are appointed to fulfil Singapore’s regulatory requirements.

Here’s how to select a Nominee Director:

1. A real person (i.e. not a company, and not a business identity)

2. Ordinarily a resident in Singapore. This can be a Singapore citizen, Permanent Resident, or an EntrePass holder. (Note: Someone who is on an Employment Pass in Singapore, can only be a Director for the company they are sponsored under)

3. Be at least 18 years old.

You can have as many directors as you want, but at least one of them needs to be a local resident (i.e. their usual place of residence is in Singapore).

Take note that Employment Pass holders can only be the Director for the Company that sponsors their pass.

5. Shareholder

The sole director may also be the sole shareholder of the company. So basically, you only need two separate individuals to set up a company in Singapore - the director and the corporate secretary! As a foreigner, you can own 100% equity of the shares in your company.

6. Paid-up capital

A private limited company needs a paid-up capital. In most cases, SGD$1 is enough. Usually the amount is between $1 to $1000. Paid-up capital can also be in other currencies. You can increase the sum, any time after your company is incorporated.

What business structures are available for me to register in Singapore?

Before registering your company, decide which company structure suits your business. Ask yourself the following questions.

  • How many owners will there be in the business?
  • How much capital do you have to invest?
  • Do you want to bear the liability personally?
  • What are the advantages and disadvantages of the different business entities?
  • Is the business entity easy to close?
  • How much tax will you pay under different structures?

There are 4 main types of business structures a foreigner can choose from:

1. Sole-Proprietorship or Partnership

2. Limited Liability Partnership (LLP)

3. Private Limited Company (Pte Ltd)

4. Company Limited by Guarantee

A private limited company is the most favoured business structure for Singapore business registration. Choosing the right business structure is the key to successful company registration in Singapore as it can affect the taxation of your business. Look to this document to compare the different business structures side by side.

Do I have to come to Singapore to open a company?

Nope. You can be anywhere in the world with an internet connection and a smartphone to open and run your business remotely from abroad. You used to need to fly in once and that’s only to open your bank account.

To make your life easier, Osome has teamed up with Aspire to enable you to open your business account fully online without having to come to Singapore at all. This is especially useful in the current pandemic situation where business travel is restricted.

Even if you fly into Singapore, foreigners cannot self-register a new company. You would need to hire a business registration provider. They would have the exact solutions to assist you with your registration, saving you time and money.

How long does it take to register a company in Singapore?

With all the required incorporation documents in hand, you can get your business incorporated within 1 day. Applications are processed even faster, within 15 minutes.

Can I move to Singapore if I open a business there?

Considering to be closer to your operations? Sure. There’s a visa called the Employment Pass for you to consider. It takes around 6 months to receive it. To qualify for it, you would have to pay yourself a salary. It cannot be less than $3,600, which is the starting pay of a fresh graduate. If you have more working experience, your salary should be between $6,000 to $8,000. This will be needed especially when you plan to bring the family to move to Singapore with you. They would need Dependants’ Passes.

See also: How to move to Singapore under Employment Pass?

Is it mandatory to have employees in Singapore?

No, this is not needed at all. A foreigner can open a business in Singapore without a single employee there. What is needed from you is that you have a resident director, and a corporate secretary.

How much does it cost to set up and maintain a registered company in Singapore?

Depending on your needs, you may find yourself hiring professional help to manage your company’s incorporation process, as well as other relevant services that help to lessen your load as the company director. These are costs that you need to budget for.

You would need to consider the cost of maintaining your company every year as there are many other administrative matters involved in running a company.

Item Estimated Cost Detail
Initial setup SGD $2,600 – SGD $5,000

This includes the cost of incorporation provided by local agencies, company registration fee, name approval fee, government fees, and other necessary services such as appointing a nominee director, a corporate secretary, registering a local address, and paid-up capital.

This includes $315 that you pay to ACRA ($15 for Company Name Application; $300 for Company Registration Fee).

Getting a nominee director $1,800

This excludes a security deposit of another SGD$2,000.

The deposit works as insurance for the nominee, you get it back when his contract expires. A cheaper option is to hire someone you know to be the resident director.

Tip

Register with no deposit needed when you open a company with Osome.

Special licenses for specific businesses $50-$500

This is the cost of licenses that some businesses like tourism or alcohol sales require. The cost varies depending on your industry.

Should you move to Singapore, you’ll also save on the nominee director service, but will pay for the following:

Employment Pass (S$800-S$1,500)

Dependants’ Passes (S$400-S$600 per dependant).

What taxes will I pay?

If you are a Hong Kong foreigner opening up a business in Singapore with your source of income generated only in Singapore, you will be taxed corporate tax and personal income tax (for latest rates, refer here) in Singapore. Here we will explain more about corporate tax as we can help you figure this out for your business.

A company is taxed on the income it earned in the preceding financial year. This means that income earned in the financial year 2019 will be taxed in 2020.

What is the current Singapore corporate rate tax set at?

Singapore’s corporate tax is low, clear, and transparent. It’s set at a flat rate of 17%, regardless if it’s a local or foreign company.

What income is taxable in Singapore?

There are two types of income that will be taxed in Singapore.

1. Income that is derived from Singapore

2. Income received in Singapore from outside the country

It’s worth noting here that after all the incentives, exemptions and deductions, the effective tax rate you pay is lower than 17%. To find out more about Singapore’s corporate tax we explain more here: Singapore Corporate Income Tax: Rates, Relief, System.

Additionally, for any income you receive in Singapore from outside the country, like dividends, can be exempted provided it meets certain criteria. One exemption is if your foreign income received in Singapore is already subject to tax in the foreign country from which the income is received. There are more exemptions to tax that you can enjoy.

Do I have to pay tax to Hong Kong as well?

As a foreigner from Hong Kong doing business in Singapore, you might be wondering if you have to pay tax to the Hong Kong government, after paying tax to Singapore.

Just like Singapore, the Hong Kong tax system follows the territorial source principle to determine which income is subject to taxation. Only profits sourced from Hong Kong are taxable in Hong Kong. Therefore, if your business is only making profits from Singapore, you would not have to pay any further corporate tax to the Hong Kong government.

Let’s look at an example to make things clearer:

Sarah has a tech start-up registered in Singapore as she wishes to take advantage of the relatively low corporate taxes, and the generous support given to start-ups in terms of tax exemptions, grants, and networks. She lives in Hong Kong and works in Hong Kong. Her clients are from Malaysia, Singapore and Indonesia. They pay her through her company’s bank account in Singapore. The profit from this amount will be taxed by IRAS. As there is no income earned in Hong Kong, there is no need to pay taxes there.

Answering questions on tax can be more complex as your business grows. As each company operates differently, there is no one size fits all answer to tax questions.

It depends on many factors like:

1. How much of your business income is taxable?
2. Which country did you derive your income from?
2. Which country is your company a tax resident of?
3. What is your company’s structure?

You might be overwhelmed with information and confusion at this point. No worries, it happens to the best of us. Drop us a chat if you need to talk to any of our friendly expert accountants.

Can I prepare and file paperwork requirements myself as a foreigner?

As a foreigner or non-resident, you cannot register for a company on your own. To avoid this, you can hire an authorized filing agent. If you choose this option, find out whether the state fees are included in the price, some agencies do not include this and charge you extra.

After the successful registration, ACRA sends you an Incorporation Email. In Singapore, it serves as the Incorporation Certificate. You can obtain its hard copy by paying appropriate fees.

You can set up a company in less than an hour. Applications are processed even faster, within 15 minutes.

To sum up, this is all that you need to incorporate your first company in Singapore within an hour.

Here is a checklist of what you would need:

1.     Come up with a company name

2.     Register a physical Singapore address as your local company address

3.     Appoint a corporate secretary

4.     Nominate a resident director

5.     Nominate at least one shareholder

6.     Paid-up capital of at least S$1 (equivalent to around HKD$5.58)

We wish you all the best in starting your company in Singapore!

Next Steps

If you want to register a Singapore company from Hong Kong, or you need more information, our experts are here to help.

Start a Singapore company from Hong Kong

This article was written by Osome who are experts in online Incorporation, Secretary, and Accounting in Singapore. We help entrepreneurs from Hong Kong to start and run a business without calls or flights to Singapore. We respond fast 24/7 in a secure chat. Learn more and get a free consultation on osome.com

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