Private Limited Company Incorporation Package
Why you should incorporate a Private Limited Company
If these are the features you require for your company, then this is the page for you.
- Personal assets protection for Shareholders
- Transferable ownership and appointment of additional shareholders to facilitate additional capital injection for business growth
- Strong establishment of business credibility, professional commitment and vision
- Enhanced professional business image maximises potential loans from banks and other financial institutions
- Perpetual existence with business operations unaffected by changes in the shareholders, or the holding pattern
- Enjoys a highly competitive and effective corporate tax rate
- Zero Tax on first SGD 100,000 taxable income annually for first three years for new Singapore company
- Maximum 8.5% tax rate on taxable income from subsequent SGD 100,001- SGD300,000 annually for first three years for new Singapore company
- Low flat tax rate of 17% on taxable income more than SGD 300,000
- Zero taxes on capital gains and dividends
- Regular reviews of procedures from Singapore Companies Act to enhance business growth and start-up companies
For most Singapore residents, setting up a Private Limited Company is the preferred option because it’s the most flexible and advanced model of business entity available. The Private Limited Company holds its own legal status as an independent entity, separate from its owners. This means that its liabilities do not extend to its owners. Furthermore, this business entity enjoys special tax exemptions in Singapore that other types of business structures are not eligible for. A Private Limited Company also holds rights to own property.
How AsiaBiz can help you: All you have to do is to ensure you meet the minimum requirements (listed below) of setting up a Private Limited Company according to the Singapore Companies Act. AsiaBiz will facilitate a smooth and hassle-free registration of your company.
Minimum Setup Requirements for Singapore Private Limited Company
- Minimum 1 Shareholder + 1 Resident Director + 1 Company Secretary
- Minimum initial paid-up capital is S$1
- A Singapore registered office address
Private Limited Company Setup
If you have a business that has substantial growth plans and development, then a Private Limited Company is a highly suitable business entity. Your company will be locally incorporated and the name of the venture includes the suffix “Private Limited/Pte Ltd”. While the number of shareholders cannot exceed 50, full foreign ownership is allowed. However, the company must have a Singapore Citizen or Employment Pass holder with a residential address as a local director.
Tax and Singapore Private Limited Company
Singapore Private Limited Company is considered a tax resident, and therefore eligible for tax exemptions. New start-up companies pay Zero Tax on the first S$100,000 of chargeable income for the first three consecutive years. A further 50 percent exemption is given on the next S$200,000 of the chargeable income.
A company can be limited by shares through the following entity variations:
- Private Limited Company
- Public Limited Company
- Public Company Limited by Guarantee
Exempt and Non-Exempt Private Companies
Private Limited Companies are classified into two categories – Exempt or Non-Exempt – based on their annual auditing and income filing requirements.
Exempt Private Company
Since 2003, small Private Limited Companies are released from statutory annual audit requirements under the following conditions:
- The company has no more than 20 Shareholders
- None of the company’s shares is held, directly or indirectly, by any corporate entity
- The annual turnover does not exceed SGD 5 million
Because exempt companies have no statutory audit requirement, the compliance cost for Exempt Company is less. Exempt companies are also not required to file their financial statement with Accounting and Corporate Regulatory Authority (ACRA) but they’ll still be required to maintain proper accounting records, prepare and present financial statements in compliance with ACRA and the Singapore Financial Reporting Standards (FRS).
Companies are required to submit an Exempt Company Certificate declaring their solvency status (a company is solvent if they’re able to pay their debts and liabilities promptly). If the company is insolvent, it will have to file their financial statement with ACRA in XBRL format.
Non-Exempt Private Company
Private limited companies that do not qualify as an exempt company are known as Non-Exempt companies. These companies are required to submit audited financial statements with ACRA annually in XBRL format.
Public Limited Company
A Public Limited Company is a locally incorporated company of a medium to large scale that is well-established, recognised, and allows more than 50 Shareholders. These companies are often listed in the stock exchange and raises capital by issuing shares and debentures. A Public Company must register a prospectus with the Monetary Authority of Singapore before making any public offer of shares and debentures.
Features At-a-Glance
- Additional capital can be easily raised by issuing shares and debentures, ensuring liquidity
- Reputable and trusted company image due to higher value of shares and status as a listed company
- Strong company status enhances the confidence of trading or financing partners
- Easily make acquisitions as Shareholders can easily sell or buy shares
- Company directors are accountable to the much larger number of external Shareholders
- Financial markets determine the value of your company through the trading of the company’s shares
- Company must abide by the rules of the stock exchange on which it is listed
- Mandatory public disclosure of financial affairs
Public Company Limited by Guarantee
A Public Company Limited by Guarantee is a locally incorporated company that exercises non-profit activities that have some basis of national or public interest such as a charity or an art organisation. It is mandatory that the company name includes the term ‘Limited’. However, the relevant authority may, on appeal, relieve a company from its obligation to include the term.
These companies are registered with ACRA and are governed by the Singapore Companies Act. These companies generally appoint members instead of Shareholders as they do not have any share capital. A member’s liability is limited to his guarantee, which is an undertaking to contribute a specific sum towards the company’s liabilities in the event of its closure.
Features At-a-Glance
- The company is an independent legal entity
- Member’s liability is limited to his respective value of guarantee
- Complex compliance requirements
- Public disclosure of obligations
- High compliance costs
- Not suitable for small non-profit organisations
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