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Singapore Private Limited Company
Singapore provides new businesses with the lowest corporate tax rate in the world along with the necessary incentives to succeed. With a business-centric environment, companies are encouraged to grow and prosper in Singapore.
The Private Limited Company is the most common business form in Singapore. The Private Limited Company provides myriads of benefits to the owner and is backed up by the government through certain tax incentives. Some benefits include tax incentives for the first few years of the business and limited liability, protecting the owner from any potential legal matters regarding the business as the company is considered a legal entity on its own.
What is a Private Limited Company?
A Private Limited Company structure, also known as a Pte Ltd, is the most flexible, safe and adaptable business form in Singapore. Majority of privately incorporated businesses use this structure as it provides a myriad of benefits to the user and their shareholders. There should be no less than 50 persons holding shares and the shares are not available to the public. How can you tell if a company is registered under a Pte Ltd structure? For example, you would like to open a Pte Ltd company, Company A. It will be registered as “Company A Private Limited” or “Company A Pte Ltd”.
- Separate legal entity: The company is considered a legal entity on its own and business owners will not be touched for their assets, personal possessions in the event the company faces a lawsuit or debt. This applies to the directors and shareholder’s as well. The company is limited with the funds they contributed to the company’s paid-up capital in the beginning.
- Shareholder Expansion: The parent company holds 1 share amongst the 50 members. The other 49 are reserved for people who are interested in investing to expand the company.
- Shareholder Characteristics: Up to 50 members are allowed to hold shares in the company (including corporate ones); the minimum is 1 (the parent company). The Subsidiary’s operation or existence is not defined key shareholders; if key shareholders decide to sell their shares, resign, face bankruptcy or death, the Subsidiary functions as per normal within the frame of its shares.
- Transfer of ownership: Subsidiary Companies enjoy flexibility and vitality because of the ease of transfer of ownership. Ownership can be transferred either partially or wholly without disrupting operations or the need for complicated legal documentation and procedures. This is achieved through the selling of shares or part thereof to another individual.
- Augmentation of paid-up capital: New shares can be issued to change the amount of paid-up capital.
- Trusted image and branding: Using an incorporated business form allows your business to be branded in a credible image compared to a sole proprietorship or partnership business. This inadvertently creates a sense of trust amongst potential investors who might give them the push to invest into your business. In addition, banks are also more inclined to process loans if needed due to the limited liability characteristic
- Registration: Any person (or foreign company) is allowed to register for a Subsidiary, but he/she is required to submit a document called the Memorandum and Articles of Association which clarifies facts such as the Subsidiary’s name, its share capital and how the company is going to limit their members’ liabilities.
- Clarification: Before opening your subsidiary, please clarify if your area of business requires any specific regulatory documentation under the governmental Companies Act with our immigration specialist.
- Distinct legal entity: Subsidiaries are considered distinct legal entities and are responsible for its acts within the scope of its share capital. Basically, subsidiaries are responsible for the actions carried out by shareholder members.
- Wound up procedures: In the event of a closure, Subsidiaries are to be wound up according to certain legal procedures.
Separate legal entity: The company is considered a legal entity on its own and business owners will not be touched for their assets, personal possessions in the event the company faces a lawsuit or debt. This applies to the directors and shareholder’s as well. The company is limited with the funds they contributed to the company’s paid-up capital in the beginning.
Transfer of ownership: With a private limited company, transfer of ownership has never been easier. Ownership can be transferred either partially or wholly without disrupting operations or the need for complicated legal documentation and procedures. This is achieved through the selling of your shares or part thereof to another individual or through issuing of new shares to additional investors
Exempt Private Company: If you do not foresee your business holding more than 20 members, with no corporate members holding the majority of the shares and your prospective turnover is not going to be more than 5,000,000 SGD, you can register your business as an Exempt Private Company and be excused from the annual filing of the audited accounts.
Low Corporate Tax Rate: Singapore’s business friendly environment allows corporations to enjoy low tax rates. A Pte Ltd Company follows the same tax structure to that of a Subsidiary Company;
Source: www.iras.gov.sg
For Singapore company registration, you have to prepare standard documents for submission. For some regulated industries like financial or education sectors, you need to apply for the related license before you can start your operations. See below for a list of standard documents for submission:
- Valid Passport of all directors and shareholders;
- Proof of Address document (e.g. Bank statements, telephone bill etc)
- Provide personal details of shareholders and directors
Besides the above documents, it is important to understand which company structure is suitable for you. Contact us with for a Free Assessment by clicking the button below!
Step 1: Contact Visa Express to discuss on your company requirements;
Step 2: Our team will review all your case carefully and advice on the suitable company set up for you and the type of license you need when you engage our service;
Step 3: Provide all documents and details required for submission;
Step 4: We will prepare and submit your application to ACRA for business registration;
Step 5: We update you on company incorporation and proceed with the rest of the document for bank opening;