An Indian individual seeks to incorporate a company in Singapore. The process involves obtaining name approval, determining the company structure as a private or public company, appointing directors and other key personnel, selecting a registered office address, and drafting a company constitution. Once incorporated, the new company can open a Singapore bank account and obtain a tax residency certificate. Indian regulations allow for foreign direct investment through the automatic route or approval route depending on the amount and financial commitment. The entire incorporation process can be completed quickly online but setting up documents may take a few days.
2. Presentation Schema
Singapore as a
Destination
Why Singapore is
Interesting
Registration
Procedure
Duration for
Incorporation of
Company
Opening a Bank
Account
Tax Residency
Certificate
RBI Regulation for
Foreign Investment
3. Singapore as a Destination
• Singapore, officially the republic of Singapore, is an
island city state in South east asia.
• Singapore is one fastest growing countries in Southeast
Asia.
• People of different ethnicities are present in this
country.
• Singapore is among 20 smallest countries in the world
with total land area of 682.7 Sq Kms.
• Dynamic City
• Global Financial Centre
• Regional Trade Hub
• Logistic Hub
4. Why Singapore is Interesting to start a business
• Indians can hold 100% ownership without the need of
local shareholders
• This enables flexibility in dynamic Operations
100% Foreign Ownership
• No restrictions on movement of foreign currency into
or out of country
Repatriation
• World Class infrastructure
• Improves the productivity of businesses
• Focus on Technology
• Government grants for new companies with
qualifying activities
Infrastructure
5. • Stable Government & Legal Structure
• Extremely Skilled and well paid government officials
• Harsh Punishments for non-following of rules
Stable Government
• Efficient and Bureaucracy - free regulatory framework
• Straightforward and simple procedure
Ease of Incorporation
• No tax on Capital gain and Dividend
• Tax Rebate for new companies
• Corporate tax rate at 17% with exemption for new
start-up companies (explained in subsequent slide)
Attractive Tax System
Contd…
6. Tax Exemption for New Start-up Companies
The tax exemption scheme for new start-up companies was introduced in Year of Assessment (YA) 2005 to support
entrepreneurship and help local enterprises grow.
Companies will be given the following tax exemption for the first three consecutive YAs where the YA falls in:
To all new companies
except
Principal holding company
A company which
undertakes property
development for sale, for
investment
Company must be
incorporated in
Singapore
The company must be a
tax resident in Singapore
for that YA;
The company’s total share capital is beneficially held directly by no more
than 20 shareholders throughout the basis period for that YA where:
• all of the shareholders are individuals; or
• at least one shareholder is an individual holding at least 10% of the
issued ordinary shares of the company.
7. • The ease of doing business score in Singapore, has never been
below 80.
• It currently holds the 2nd rank in the ease of doing business
amongst 190 countries (World Bank)
Singapore is an international financial center, hence large Indian
groups and corporates tend to set up companies in Singapore to
manage day to day operation
Doing Business in Singapore
Top ODI Destination for India (IBEF)
• Mauritius
• Singapore
• British Virgin Islands
• The Netherlands
Recently, in Feb 2021, Tata Steel invested USD 1
Billion in a wholly owned subsidiary in Singapore
10. 1. Name Approval
Name shall not be identical to existing business
Must not infringe on any trademarks
Must not be reserved by another company
The name must not be undesirable
The name has to be approved by ACRA
• The application shall be filed in bizfile portal of
ACRA.
• It takes around 15 minutes if the name is
available.
• Once the name is approved, it can be reserved
upto 120 days
• The name approval fee required for reserving
a name is $15.
12. 2. Determining the Type of Company
Private Company Public Company
Limited by Shares
• Max shareholders-50
• Can have a corporate
Shareholder
• Must file its annual
accounts, conduct AGM
Exempt Private Company
• Has a maximum of 20
shareholders and no
corporate shareholders
• Enjoys less government
regulations
• Turnover Less than SGD 5
Million
Limited by Shares
• Can have more than 50
shareholders
• Raises capital from
public
Limited by guarantee
• Generally formed to
carry out non profit
making activities
• Members agree to
contribute a fixed sum in
case of wound up.
14. 3. Appointing Directors, Company Secretary and
Other Key Personnel
Director
• Must have atleast 1 director who is locally resident
in Singapore.
• >= 18 years
• Must of be of full legal capacity
• Cannot be disqualified from acting as director of a
company Appoint CEO and/or MD (optional)
• Appoint CEO and/or MD to oversee the business of the
company
Auditor
• Appoint within 3 months from incorporation
• Unless it is exempt from audit requirements
Company Secretary (CS)
• Appoint CS within 6 months from incorporation
date
• Must be locally resident of Singapore
Foreigners who wish to incorporate a local company in
Singapore
• Engage the services of a registered filing agent
• Employ a director (to meet the desired requirements)
15. Shares and Shareholders
1
• The company must have atleast 1 shareholder
• Personal Identification details - Contact information, Residential address shall be
submitted
2
• The amount of issued capital shall be indicated
• The minimum issued capital must be $1.
3
• The company can either issue ordinary shares or preference shares
17. 4. Registered Office Address
Place where
company’s
registers and
records are
kept
Must have
Registered
office in
Singapore
Operational
and accessible
to the public
during office
hours
19. 5. Constitution
Describes the key characteristics of Company
Contains rules and regulations for its governance
Describes how operations will be carried out
States the rights and responsibilities of directors, shareholders and CS
A company constitution is a document that generally specifies the rules governing the relationship between, and activities of,
the company and its shareholders.
It is a legal document which has to be submitted upon incorporation of a company
20. Where to register
1
Incorporation of a company
can be carried out using
www.bizfile.gov.sg using
singpass
2
Once you have setup the
company, you will need a
CorpPass to file transactions in
Bizfile+.
To register for CorpPass,
please visit
www.corppass.gov.sg
3
All the directors, shareholders
and CS must endorse their
consent within 120 days from
name application approval
date.
• Sing Pass: It is a common password which allows to connect and transact with government agencies of Singapore
• CorPass is a coporate digital identity for businesses to transact with government agencies
21. Duration for Incorporation of Company
The entire process of incorporation is computerized, hence could be finished in
few minutes
However the process of preparing the requisite documents might take some time
which can extent upto few days
22. Opening Bank Account in Singapore
• After successfully process of incorporating the Singapore company, one has to open a corporate bank account.
• The documents which are required for opening a corporate bank account is as follows
Completed and duly signed corporate bank account forms
Residential address proof of directors, signatories and of the
ultimate beneficial owners
Certified copy of Certificate of incorporation
23. Contd
Certified copy of business profile from ACRA
Resolution from Board of directors sanctioning account
opening
Certified copy of Memorandum and Articles of association
Certified copy of Passport or Singpass
Physical presence of Signatories and
majority of directors for paper signing
is mandatory
Though the above mentioned
documents are enough, banks may
ask for additional documents on a
case to case basis
However some banks may allow
signing of documents at one of the
overseas branch location in presence
of notary public
Opening of bank account generally takes 4-6 weeks if all documents are duly submitted and no concerns of resubmission
24. Tax Residency Certificate (TRC)
Source of
income lies
where the
services are
performed or
assets are
located. Hence
source country
has the right to
tax
Resident
country has the
right to tax
global income
in and outside
India of a
resident.
Then income
may be taxed
both in source
and resident
country
To avoid Double
taxation, relief
may be claimed
under DTAA
To claim relief
under DTAA,
TRC is required
from resident
country
authorities
25. Steps to Obtain TRC
Make an application in
Form 10FA to the tax
authorities.
The requisite details
along with supporting
document shall be
submitted in Tax Portal
with IRAS
The AO upon being
satisfied shall issue TRC.
Note
• The process might take around 1 to 4 weeks.
• The requisite details mentioned above shall include, Purpose of obtaining tax residency certificate, PAN, Address, Name, E-
mail ID, Period for which tax residency certificate is applicable etc.
26. RBI Regulations on Investment in Foreign Countries
ODI
Indian Party
Automatic Route
FC<400% of its
net worth (as per
audited FS)
FC<USD 1 Billion
Approval Route
Resident
Individual
LRS
Limit -USD
2,50,000
- An Indian party is a company, partnership firm, LLP and any other entity in India as notified by RBI.
- FC- Financial Commitment (Amount of direct investment outside India by an Indian party).
