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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.
- 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.
- 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.
- Incentives from the government: Singapore’s business friendly environment allows corporations to enjoy low tax rates (17%). A Pte Ltd Company follows the same tax structure to that of a Subsidiary Company; the tax incentives are granted as follows: 0% tax rate for the first revenue of $100,000 SGD; 8.5% tax rate for the next $200,000 SGD and 17% thereafter.
- 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.
- Bank Loan plans: the registered company under the Private Limited business identity will look more appealing and trustworthy towards banks due to its limited liability.
- Age Limit: Only individuals older than 18 years old are allowed to register for a Pte Ltd company in Singapore.
- Share capital and restrictions: There is no maximum limit for the share capital (minimum amount is as low as $1 SGD) and there are no restrictions of nationality.
- Company name: The name of the company has to be unique, does not include vulgarities and does not copy a name of nay existing companies in Singapore. A proper name check should be conducted before proceeding and an appropriate name can be reserved for up to 60 days with an option of further extension.
- Address: The company must be registered to a real Singaporean address.
- Nominees: Before registering, you are required to find and appoint a local secretary and local director (with the appropriate skill set) who will shoulder administrative work in your company. You (the real director) will be able to make the crucial decisions, but your power will be limited until you replace the current nominee by arriving in Singapore on the appropriate work or entrepreneur visa.
- Niche industries: If your company operates in certain niche industries (for example, the financial sector), you might need to seek for special approval from the relevant authorities before commencing business.
- Relocation: Relocating to Singapore is not obligatory for a foreigner who registers a company here; You will be able to run your Singapore firm from abroad. If you decide to relocate to Singapore, you will be able to apply under these 2 schemes: the Employment Pass or the EntrePass.
- Private Limited: Although this might be the safest option, it is also very costly. This business structure fits undertakings that have a long-term outlook and are aimed at expanding, involving more investors, loans and buying property.
- Subsidiary: A subsidiary company retains all the benefits of a Private Limited Company, but the only difference is that the shares are held by one major shareholder that is a corporate body.
- Branch Office: If your business is not associated with risk, the foreign parent company can opt to register its Singapore firm as a Branch Office. The benefit of this structure is that it saves costs with regards to taxes as Branch Offices are not obligated to pay corporate tax. However, this business structure does not protect the parent firm as it is not considered a separate legal entity and is directly linked to the parent firm overseas.
- Representative Office: If a planned business activity is not aimed at gaining profit but its sole purpose is to represent, registering a Singaporean company under the Representative Office is what you will want. This business form is not subjected to taxes and filing.
How Can We Help?
Incorporation Advisory
Incorporation can be a hassle if you are unsure of the necessary documentation and legal paperwork required. Visa Express advises and prepares the papers you need to kick off your business immediately from the get go.
Local Address Services
Visa Express helps you look for a local address! We will take you through the possible locations you could consider. Why trouble yourself with the minute details? Take away the unnecessary trouble and hassle of finding a local address today!
Local Directorship and Secretary Services
Visa Express can provide you with a local director and/or secretary if you are unable to find one before you move to Singapore on your business visa. Look no further for your nominee director!