How Much Does It Cost To Incorporate a Company in Singapore (2024)
- Published: 19 November 2024
- 10 min read
- Starting a Company
Heather Cameron
Business Writer
From expert guidance and helpful accounting tips to insights on the latest trends in fintech, Heather is here to empower entrepreneurs and small business owners in Singapore with great content. With a background in digital marketing spanning eight years, she has experience writing for various industries and audiences. As Osome’s copywriter, she’s here to inform and inspire our readers with great storytelling.
Incorporating a company in Singapore typically costs between S$3,000 and S$4,000. This article breaks down these costs, covering government fees, agent fees, and additional expenses related to the cost of incorporating a company in Singapore. Read on to understand the exact requirements and financial considerations needed for incorporating a company in Singapore.
Key Takeaways
- Incorporating a company in Singapore involves initial costs ranging from $3,000 to $4,000, which includes government and agent fees, alongside mandatory documentation requirements.
- Key requirements for incorporation include having at least one Singapore-resident director, a local registered office address, and appointing a company secretary within six months of incorporation.
- Ongoing compliance costs for Singapore companies typically range from $3,000 to $5,000 annually, covering expenses such as accounting, audit fees, and tax obligations, necessitating long-term financial planning.
Breakdown of Initial Incorporation Costs
Understanding the fees involved is the first step in the company incorporation process. Registering a business entity such as a private limited company in Singapore usually costs between $3,000 and $4,000, which includes agent fees and incorporation documents. Effective cost management ensures value and a smooth incorporation experience.
Initial costs fall into two main categories: government agency fees and agent fees. Government fees, payable to the Accounting and Corporate Regulatory Authority (ACRA), are mandatory. Agent fees cover services provided by professional firms assisting with incorporation. Knowing these components aids in accurate budgeting and avoiding unexpected expenses.
Government fees
Mandatory fees from government agencies are part of incorporating a company in Singapore. Getting a registered company name with the Accounting and Corporate Regulatory Authority costs S$15, and the processing fee for a new company is S$300. These non-negotiable fees must be paid to proceed with building out your business profile.
Government fees for incorporating a private limited company in Singapore total S$315. These essential costs should be included in your initial financial planning for Singapore company incorporation services.
Remember, these are just the baseline costs, and additional services such as goods and services tax (GST) registration or employment passes may incur further expenses.
Agent fees
Hiring a corporate service provider like a corporate secretarial firm incurs additional costs beyond the fees involved. Registered Filing Agents (RFAs) offer services beyond basic company registration, such as assistance with incorporation documents and ongoing compliance. These invaluable services add to the overall cost, so they should be budgeted for accordingly.
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Required Company Incorporation Documents
Correct documentation is vital for a smooth incorporation and registration process. Essential documents include identification, proof of address, and details of any paid-up capital for all directors and shareholders. Foreigners must provide a passport copy and proof of residential address to meet regulatory requirements.
The incorporation process also needs the company’s registered address, which must be a physical location in Singapore, accessible during business hours. This can be either a physical office or a virtual office with mail forwarding services.
Director and shareholder information
Incorporating a private limited company in Singapore requires specific information about directors and shareholders, as well as the proposed business structure. In accordance with Singapore law, at least one director must be a Singapore resident director, and either a Singapore citizen or permanent resident. Identification and proof of address for these individuals are necessary for company registration.
Registered office address
A Singapore company must have a registered office address operational for at least five hours during business hours each working day. This address cannot be a P.O. Box and must be a physical location.
Companies can choose virtual office services, which can be quickly set up and offer facilities like meeting rooms, reducing overhead expenses.
Key Requirements for Incorporating a Company in Singapore
Besides necessary documents, key requirements for incorporating a company in Singapore include having at least one shareholder (an individual or a corporate entity) and a registered address. Meeting these criteria is crucial for company registration.
Details of the company’s directors and shareholders, as well as a company constitution outlining the registered address, business activities, and share capital, are required.
Employing a Singapore-resident company secretary is mandatory and part of ongoing compliance costs. These requirements ensure adherence to Singapore regulations.
Local nominee director
Non-residents incorporating a company in Singapore must appoint a local company director, often through nominee director services provided by corporate secretarial firms. The cost of hiring a local director varies widely, often depending on included services like acting as a registered address or handling administrative duties.
Qualified company secretary
Every Singapore company must appoint a qualified company secretary within six months of incorporation, who must be ordinarily resident in Singapore to comply with regulations.
Osome offers seamless company secretary services from day one, ensuring all compliance obligations are handled right from the start. With Osome’s expertise, you can confidently meet Singapore’s requirements while staying focused on growing your business.
Ongoing Compliance Costs for Singapore Companies
After incorporation, ongoing compliance costs become a regular business expense, typically ranging from $3,000 to $5,000 annually. These costs include accounting fees, audit fees, office rental, payroll, and taxes. The company secretary plays a vital role in ensuring compliance with the Singapore Companies Act and other regulations.
Employing a company secretary incurs fees that vary based on the reputation and service level of a professional firm such as a corporate secretarial firm. Incorporate long-term expenses like taxes and compliance into your financial planning to avoid unexpected costs. A well-planned financial strategy ensures compliance and financial health.
Annual filing obligations
Singapore companies must file annual returns with the company registrar and complete other annual filings as part of ongoing compliance with the Singapore Companies Act. The annual return filing fee is S$60 and is often included in corporate services. Understanding the Singapore company registration process is essential for new businesses.
Making sure that company secretary services include these administrative fees in their pricing is crucial for accurate budgeting.
Accounting and tax filing
Accurate financial records are crucial for meeting tax obligations, such as goods and services tax compliance, and ensuring compliance with Singapore Financial Reporting Standards (SFRS). Businesses must keep records supporting their income and claims for at least five years. Preparing financial statements reflecting income and expenditures is necessary for tax filing.
Companies with an annual turnover exceeding S$1 million must register for GST and file quarterly returns. This registration is part of the long-term financial obligations companies must plan for.
Accurate and timely accounting and tax filing are essential for ongoing compliance, ensuring adherence to all regulatory requirements.
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Audit requirements
Statutory audits in Singapore ensure compliance with financial regulations and provide transparency in operations. These audits must be conducted within three months of incorporation unless exempted based on size or activities.
The cost of statutory audits can vary, so it is important to budget for potential auditor fees to fulfil these ongoing compliance requirements.
Additional Costs for Foreign Business Owners
Foreign business owners may incur additional costs when incorporating a foreign company in Singapore. Start-ups might qualify for tax benefits, reducing taxable income, only when the registered company qualifies as a tax resident of Singapore. If not, the start-up corporate tax exemption does not apply, especially for any foreign company where directors and operations are based overseas. Business grants can also help alleviate some costs relating to incorporation services.
These incentives support foreign entrepreneurs in establishing their businesses in Singapore.
Employment pass and business licenses
Foreign company owners must obtain employment passes and business licenses. The fee for submitting an employment pass application is S$105, with an additional S$225 upon issuance. Applying for your company online takes about 10 business days.
There may be extra fees for family passes after the main Employment Pass is approved.
Bank account opening
Opening a corporate bank account is essential for handling business financial transactions. A Registered Filing Agent (RFA) offers corporate services including assistance with opening a new business account. This step ensures proper financial account management for the newly incorporated company.
Long-Term Financial Planning for Singapore Companies
Long-term financial planning is crucial for a company’s sustainability and success in Singapore. This planning should include ongoing costs like taxes and compliance expenses. Companies trading locally must register for GST and file quarterly returns. Leveraging tax incentives can significantly lower the effective tax rate, offering a competitive edge.
Tax service packages typically range from an accounting package, or S$1,000 for tax services, to S$1,500 for non-accounting but audited clients. Accurate financial records and proper accounts are essential for legal compliance and good business practice and may require help from a professional firm. Engaging professional service providers for accounting and financial planning helps meet regulatory requirements and maintain financial health.
Corporate tax rates
Singapore’s corporate tax rate is 17%, making it one of the most competitive in the region, which is attractive for private limited companies. This flat rate is appealing for businesses considering incorporation, as it provides clear tax obligations and aids financial planning.
The competitive corporate tax rate makes Singapore an attractive destination for business incorporation.
Proper financial accounts
Proper financial accounts are crucial for compliance and good business practice, especially for a separate legal entity like a private limited company. In Singapore, financial records must be kept for at least five years.
First-time company owners should use accredited accounting or bookkeeping firms to ensure accurate and compliant financial records. Opening a corporate bank account is also essential for managing financial operations.
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Minimising Company Incorporation Costs
Minimising incorporation costs can significantly impact your business’s initial financial health. Basic incorporation packages for locals start at S$600 including standard government fees. More comprehensive packages, like the Full Compliance Package at S$1,390, are suitable if you want your first year covered, from company formation to expert support and filing.
Choosing the right incorporation package from a reliable corporate secretarial firm can lower long-term maintenance costs and streamline compliance. Researching market prices and comparing professional service provider options such as corporate secretarial firms can help you find a cost-effective choice.
Researching market prices
Researching market prices helps minimise incorporation costs. Comparing prices of corporate service providers can identify competitive pricing for incorporation and compliance services, ensuring cost-effective options and avoiding overpayment.
Utilising staff as nominee directors
Using existing staff as nominee directors can reduce costs associated with hiring external nominee services. Employers save on fees by designating current employees, who are already familiar with the company’s operations and goals.
Examples of Affordable Incorporation Packages
Several affordable incorporation packages in Singapore by Osome offer transparent, fixed-price structures. For instance, the Incorporation+Secretary Package at S$600 includes services like AGM and annual return filing for the first accounting year.
Using online resources to compare service packages can help identify more affordable options and ensure that you get the best value for your money. For more information on incorporation pricing, you can visit Osome’s pricing page.
Summary
Incorporating a company in Singapore involves several costs, from initial government fees to ongoing compliance expenses. Understanding these costs and managing them effectively is crucial for the success of your business. The government fees for company registration are fixed, but agent fees can vary depending on the services provided. Essential documents such as identification for directors and shareholders, and a local registered address are required for the incorporation process.
Long-term financial planning should account for ongoing compliance costs, including accounting and tax filing, and potential audit requirements. Utilising affordable incorporation packages and adopting strategies to minimise costs, such as using existing staff as nominee directors, can help reduce overall expenses.
In conclusion, careful financial planning and understanding the specific costs involved in incorporating a company in Singapore can help ensure that your business starts on a solid financial footing. By leveraging affordable incorporation packages and strategic cost-saving measures, you can set your business up for long-term success in one of Asia’s most dynamic economies.
From expert guidance and helpful accounting tips to insights on the latest trends in fintech, Heather is here to empower entrepreneurs and small business owners in Singapore with great content. With a background in digital marketing spanning eight years, she has experience writing for various industries and audiences. As Osome’s copywriter, she’s here to inform and inspire our readers with great storytelling.
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FAQ
What are the mandatory government fees for incorporating a company in Singapore?
The mandatory government fees for incorporating a company in Singapore amount to S$315, comprising S$15 for company registration and S$300 for processing the registration.
What documents are required for company incorporation in Singapore?
For company incorporation in Singapore, you need to provide identification and proof of address for both directors and shareholders, along with a registered address in Singapore.
What is the cost of hiring a local nominee director?
The cost of hiring a local nominee director typically varies based on the services offered, such as providing a registered office address service and or virtual address services, and administrative support. It is advisable to obtain quotes to ensure transparency and understanding of the specific services included.
How much do annual compliance costs typically range for a Singapore company?
Annual compliance costs for a Singapore company typically range from $3,000 to $5,000, which encompasses accounting fees, audit fees, office rental, payroll, and taxes.
What are the benefits of using existing staff as nominee directors?
Utilising existing staff as nominee directors can lead to substantial cost savings by reducing fees typically incurred from external nominee services. Working with a local director also fosters a deeper understanding of the company's operations and governance.
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