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A Singapore Private Limited Company (PLC) is the most popular of the five different legal entities that foreigners can set up. The PLC is a company limited by shares while being a separate legal entity from its shareholders. Limited liability for the shareholders is another benefit.
The Singapore Company Act of 1994 governs all company formations, activities, and dissolutions.
Foreigners can own 100% of the total company shares.
The Republic of Singapore is an islands group located between Malaysia and Thailand in Southeast Asia. Singapore was a British Colony until 1959 when it joined the Federation of Malaysia until 1965 when it became an independent country.
Singapore’s legal system is based upon the English Common Law. It has a democratically elected parliament whose political stability is considered one of the best in the world.
The economy of Singapore features fast growing financial systems. A key economic center in Southeast Asia with an economy based upon trade, shipping, high-tech industries, and financial services.
A Singapore Private Limited Company (PLC) enjoys these benefits:
• Foreign Owners: Every share in a PLC can be owned by foreigners.
• Low Taxes: The first 3 years, large tax exemptions are available. Note: U.S. taxpayers and others residing in global taxation countries must declare all income to their governments.
• Limited Liability: Shareholders’ liabilities are limited to their share capital contributions.
• No Minimum Capital: There is no required minimum authorized capital or share capital.
• No Audits: Audits are not required for small companies.
• English: Singapore is a former British Colony with English as one of its official languages.
• Access to Asia: Singapore is a gateway to Southeast Asia for better regional business opportunities.
Singapore Private Limited Company (PLC) Name
Every PLC must select a unique company name not the same or too similar to an existing Singapore legal entity’s name.
PLC’s company name must end with the words “Private Limited” or its abbreviation of “Pte.Ltd”.
Every new company must register with the Accounting & Corporate Regulatory Authority (ACRA).
File a signed Shareholders’ Agreement defining the relationship between the shareholders and the company with their obligations and rights clearly established. The beneficial owners should include their “controlling rights” to protect themselves.
At least one share must be issued to the initial subscribers. To register, the company must have a minimum paid up capital of $1 SGD (or the same in any foreign currency).
Upon approval, the Company Registrar issues a Unique Entity Number (UEM) which identifies the company as being duly registered. In addition, a company business profile is prepared by the Registrar which includes: the company’s name, registration number, date of incorporation, description of the types of business enterprises, registered office address, amount of paid up capital, and details regarding the initial shareholders, directors, and secretary. This profile is available to the public.
Finally, the Registrar issues a Certificate of Incorporation which includes the company’s name, date of incorporation, and initial shareholders which is available to the public. The certificate provides proof of incorporation, registration, and the number of shares issued to the initial shareholders.
Memorandum and Articles of Association
The Memorandum and Articles of Association (MAA) describes the company’s business purposes, its activities, and the minimum information required for registration such as company name, registered office address, etc. The Articles of Association describes the company’s internal management and rules managers must abide by.
The liability of the shareholders is limited to their share capital contributions. If their shares are not fully paid, that amount can be sought by the company’s creditors to pay company debts or lawsuit judgments.
Only a minimum of one shareholder is required to form a PLC. The shareholders can be residing in and citizens of any country. Shareholders may be natural persons or corporations. 100% foreign shareholders is permitted. PLC’s can only have a maximum of 50 shareholders.
Every PLC must maintain and file a Register of Shareholders for the Singapore Register of Enterprises.
Only one director is required to manage the company. However, there must be at least one resident (local) director.
PLC’s must maintain and file a Register of Directors for the Singapore Register of Enterprises.
A company secretary must be appointed within 6 months of registration. The company secretary is responsible for maintaining regulatory compliance. Singapore has company secretary services corporations available for this position.
Registered Office and Agent
Every PLC must maintain a physical office address in Singapore. The registered office address may be that of the company’s registered agent, local director or secretary. P.O. boxes are not allowed.
In addition, PLC’s must appoint a local registered agent who is required to maintain the identity of all beneficial owners which are confidential and never filed with the government.
Minimum Authorized Share Capital
There is no minimum authorized share capital. However, the initial paid up share capital must be at least $1 SGD.
Every PLC must appoint an auditor within 3 months from registration. However, there are exemptions from this requirement such as companies with fewer than 20 shareholders and an annual turnover less than $5 million SGD.
Annual General Meetings
PLC’s must hold annual general shareholders’ meetings where its financial statement is approved for the last fiscal year.
PLC’s must file an annual return within one month from its last annual general meeting.
A company’s fiscal year can be every December 31st or within 365 days of its incorporation date.
Currently, new start up PLC’s receive a full tax exemption on its first $100,000 SGD income for the first 3 consecutive years. In addition, startups also enjoy a 50% exemption on the next $200,000 SGD income.
Corporate income tax returns must be filed by every November 30th. This includes a report and tax computations.
The current tax corporate rate is 17% on annual profits.
However, United States taxpayers and all others residing in global income taxation countries must report all income to their tax authorities.
The Registrar’s Company Business Profile which includes the names of the initial shareholders, directors, and secretary is available to the public.
A Register of shareholders and directors are provided to the government.
Time for Registration
It can take up to 15 business days to fully incorporate a PLC.
Shelf companies are available to purchase in Singapore.
A Singapore Private Limited Company (PLC) can take advantage of these benefits: 100% foreign ownership, limited liability, low taxes, access to Southeast Asia business opportunities, no minimum capital, no required audits, and English is one of its official languages.