Corporate Secretarial and Legislative Requirements for Businesses in Singapore

Singapore Business Landscape

Singapore is a recognised global financial, commerce, technology and transport hub. In addition, Singapore has been identified as a tax haven for many business start-ups and foreign direct investments (FDIs) due to its favourable tax rates, government incentives, ease of doing business and lenient regulations that govern any business establishments.
Notwithstanding this, business owners need to adhere and get familiarise with the latest Singapore statutory requirements on Secretarial, Inland Revenue, Financial Reporting, Business Licencing and other similar requirements.

Types of Companies or Business Establishments in Singapore

Business owners need to decide the type of business setups before proceeding for a business incorporation. Different types of businesses necessitate different company setups. There are typically 3 main types of business setups which we detailed below:-

  1. Limited Liability Company
    • Private Company
    • Exempt Private Company (most common among SME business owners)
    • Public Company limited by shares
    • Public Company limited by guarantee
  2. Partnership
    • General partnership
    • Limited partnership
    • Limited Liability Partnership (LLP)
  3. Sole Proprietorship

Here are the advantages and disadvantages of each and every business formation highlighted above.

Singapore Secretarial Procedures for Company Incorporation

This section specifies the general requirements necessary for business owners intended to establish an entity in Singapore.
All business registrations, approval process, secretarial file records are maintain under ACRA (Accounting and Corporate Regulatory Authority). ACRA is the Government Authority that administer all business entities and establishments in Singapore.

  1. Business owners shall first have their intended company name submitted for approval by ACRA. The cost is $15.00.
    This process can be done using a CorpPass or a SingPass login to the ACRA portal https://www.acra.gov.sg. Unfortunately if you are a foreigner, you may either engage a law firm, accounting firm or corporate secretarial firm to submit an online application on your behalf.
    Once the company name has been approved, the company name will be reserved for 120 days. No further extension of the company name is allowed.
  2. Upon completion of step 1 above, business owners can then register his/her business entity name with ACRA. ACRA is the national regulator of business entities, public accountants and corporate service providers in Singapore. The company incorporation fee paid to ACRA is $300.00. If one do not have a CorpPass or a SingPass login, it is advisable to engage a corporate secretary.
  3. Please prepare the following information beforehand for either to your corporate secretary or for online submission.
    • Business entity name
    • Business nature (principle activities of the company)
    • Details of proposed director and company officers – include address, ID number, ID type, nationality and contact information
    • Shareholding details
    • Photocopy of proposed directors and shareholders’ NRIC or passport
    • Registered office address details.
    • Decide on financial year end (every December, June, February etc)

NB: If any director/shareholder appointed is a foreigner, then a corporate secretary must be engaged to incorporate the company since he/she may not have a SingPass login.

Corporate Personnels

Director

Directors of the Company are responsible for day-to-day running of a business, act as decision makers for the best interest of the company and to carry out his/her duties diligently. Aside from this, Directors are also responsible on drafting it’s own financial statements.

Under Singapore Companies Act 1967, the minimum number of director required to form a Limited Liability Company is one.

Other requirements:-

  • A Company must have at least one Director who is Ordinary Resident in Singapore. Ordinary Resident means either a Singapore Citizen, Singapore Permanent Resident or a person with EntrePass holder. In other words, if an initial intention of having a single director to form a Company and this person is a UK Citizen, he/she must find another person, for instance Singapore Citizen as Director to form the company.
  • The minimum age of Director shall be 18 years old. There is no maximum age for a Director.
  • Bankrupt individuals are disqualified from holding directorships in Company.

Corporate Secretary

Every Company must engage a Company Secretary within 6 months from the date of its incorporation for the provision of secretarial services.

The Company Secretary must be residing locally in Singapore and he/she must not be the sole director of the company.

The responsibilities of a Company Secretary are documented here.

Auditor

Every Company must engage an Auditor within 3 months from the date of incorporation unless the company is an Exempt Private Company.

Company Financial Reporting & Secretarial Responsibilities

Proper Financial Records

Directors of the Company shall maintain proper accounting records, responsible for true and fair view of its financial statements and proper safekeeping of secretarial records.

It is crucial for the Company to maintain the following accounting records for a minimum of 5 years as requested strictly by IRAS.

  • General ledger
  • Full set of financial statements
  • Proper records of your previous tax submissions
  • Bank statements (including cheque buds for payment records)
  • Vendor invoices
  • Sales invoices
  • Credit notes and debit notes
  • Approved Directors’ resolutions of significant in nature
  • Agreements (if any)
  • Tender contracts (if any)
  • Other relevant business supporting documents

For the purpose of filing of annual financial reports, Director may appoint Accountants who are competent in drawing financial statements for submission to IRAS (Inland Revenue Authority of Singapore) and XBRL (eXtensible Business Reporting Language) reporting under ACRA.

GST (Good and Services Tax)

During the course of planning your business, business owners shall anticipate whether his/her business revenue (or turnover) will exceeds $1 million for the financial year.
If the business estimated a revenue of more than $1 million during the financial year, business owners or directors must register his/her company for GST with IRAS (Inland Revenue Authority of Singapore).

The application is fairly straightforward. One may apply for GST registered using IRAS online portal at https://mytax.iras.gov.sg. Alternatively, business owners or directors may apply via Paper Application and mail the necessary to IRAS headquarters. Unfortunately, this option is not available after 1 Oct 2018 unless it is an exceptional case.

Approval process for GST application is 2 working days. Thereafter, businesses must charge a mandatory standard rated 7% GST on all goods sold to your customers (also known as Output Tax). All Output Tax must be paid to IRAS and likewise, any Input Tax can be claimed. For reporting purposes, business owners will need to report both Output Tax and Input Tax. Payment or Claims shall be net off Output and Input Tax.

There are strict deadlines for submission, filing and payment of GST to IRAS. Please study deadline below. Majority of businesses in Singapore opt to e-file their GST return via IRAS online portal (which will become the only option by end of 2019 unless a reasonable explanation can be justified). Please take note that heavy financial penalties will be imposed for your business for failure to adhere to due dates.

Accounting Systems

For the purposes of maintaining proper and completeness of financial records along with prompt filing of taxes as required by IRAS, businesses shall consider investing in a good accounting system especially businesses with high volume transactions. Besides, IRAS has a list of approved accounting systems for compliance to tax and GST submissions.
Purchasing any of these systems either IRAS approved or systems from other vendors are completely optional.
As a business owner, this comprehensive guide will benefit you on deciding a suitable accounting system for your trade.

Corporate Banking Accounts

Depending on the nature of your Company, Directors should study on which corporate banking account is relevant for their day-to-day operations. There are a couple of considerations to review when deciding on which corporate bank/banks an entity deems best fits its business. We listed down various factors that need to take into account.

  • Initial deposit – does your company has surplus funds for deposit for bank account opening? Please take note that every bank has different requirements for an initial deposit. The amount can range from $1,000 (local bank) to $80,000 (foreign bank).
  • Maintenance of minimum balance – does your Company able to sustain the required minimum account balance set by the bank? Otherwise, there will be a monthly charge when your account does not meet the minimum threshold balance.
  • Foreign currency transactions – does your company require to transact funds other than Singapore Dollars?
  • Online transactions – does your company receive/paid funds via Internet most of the time? Most banks offer great rewards to corporate clients who perform their banking transactions digitally.
  • Over-The-Counter (OTC) transactions – does your company often performs OTC activities? Depending on your current financial standing, credibility, corporate portfolio etc, some banks in Singapore offer fee waivers for OTC services such as ones listed below. Please feel free to discuss and negotiate with your bank relationship manager.
    • high volume deposit & withdrawals
    • coins deposits & exchanges
    • conversion or reconversion of foreign currency notes
    • cross-border remittances
  • Convenience
    • Convenience of ATMs
    • Operating hours of banks – several local banks branches have operating hours during weekends and extended office hours during weekdays
    • Location of bank branches – Directors should also consider the accessibility of bank branches

We highly recommend entities to maintain at least one corporate account with a local Singapore bank for better convenience, better familiarity among your customers and capitalize on much more favorable banking fees.

Check out our full article for more information on the opening of corporate bank accounts, the pros & cons of each account, and their service facilities.

Corporate Reporting and Filing Deadlines

Legislation under ACRA

AGM (Annual General Meeting)

First Year of Incorporation
A Company must hold its AGM within 18 months after its incorporation.
For illustration, if the Shareholders incorporated its Company on 1 April 2017, the Directors must hold its AGM by 30 September 2018

Subsequent Years

A Company must hold its AGM within 6 months subsequent to its financial year end.
For illustration, if the Company financial year ended on 31 December 2017, the Directors must hold its AGM not later than 30 June 2018. Nevertheless, Directors can apply for a 30 days extension (by 31 July 2018) from ACRA.
During AGM, Directors will present its financial statements to their Shareholders of the Company and thereafter to approve them.

Filing of Annual Return

What is an Annual Return?
An Annual Return shows a list of fundamental details of an established Company, usually in PDF format and can be filed online by the Company Secretary or Director him/herself.

An Annual Return also confirms the following details of a Company during the financial year.

  • Entity Name, Company Type and UEN number
  • Registered Office Address
  • Directors, Secretary and Auditor (if any)
  • Share Capital and Shareholding details
  • Treasury Shares details (if any)
  • AGM and Financial Details Section
  • Company Business Nature
  • Audit Status (if any)
  • Director’s Declaration

Annual Return example in PDF format:

annual return illustration

Upon conclusion of AGM, the Directors may then require to file Annual Return to ACRA (within 6 months subsequent to the financial year end and conclusion of AGM). Basic information required are particulars of Directors, Secretaries, Auditors, are there any changes to Share Capital, AGM date, any changes to Principal Activities and Director’s declaration.
The fees for filing is $60.00
As usual, this process can be completed online via a CorpPass or a SingPass login or on behalf of your Company Secretary.
Failure to hold AGM or file its Annual Return to ACRA may face a penalty of $300.00

Filing of XBRL

eXtensible Business Reporting Language or XBRL is a requirement under ACRA to file company’s financial statement.
For this purpose, ACRA has implemented a filing system namely, BizFinx. It comes with a preparation tool free of charge for submission of XBRL to ACRA. The minimal financial information required are as follows:-

  • Statement of Financial Position
  • Income Statement
  • Statement of Cash Flow
  • Trade and Other Receivables
  • Trade and Other Payables
  • Provisons
  • Revenue
  • Employee Benefits Expense
  • Property, Plant and Equipment

All companies registered in Singapore (both public and private companies) are required to file XBRL. The only exemption is Private Exempt Company which has the option to file or not to file their XBRL.
The deadline for filing of XBRL is upon conclusion of AGM. In other words, it is usually file together with Annual Return.
ACRA also conducts free training pertaining to XBRL filing from time to time.

Legislation under IRAS

GST (Goods and Services Tax)

Business file GST returns typically four times a year. In other words, GST is filed once every one quarter (three months). The deadline for filing is one month subsequent to the preceding quarter. For instance, you must file your GST returns by 31 Oct for the GST period from 1 July to 30 Sep. Please refer to the table illustration below.

GST Period Filing Deadline Payment Deadline
1 Jan to 31 Mac 30 Apr 30 Apr
1 Apr to 30 Jun 31 Jul 31 Jul
1 Jul to 30 Sep 31 Oct 31 Oct
1 Oct to 31 Dec 31 Jan 31 Jan

Estimated Chargeable Income (ECI)

Companies are required to declare an ECI for the Year of Assessment within 3 months of date of financial year end.
For instance (new companies)

  • Date of incorporation: 1 April 2017
  • Directors decided Financial Year End should be: 31 January 2018
  • ECI filing deadline: 30 April 2018

For instance (on-going companies)

  • Financial Year End: 31 December 2017
  • ECI filing deadline: 31 March 2018

Companies are exempted from ECI declaration if:

  • Revenue does not surpass $5 million during the Year of Assessment and
  • ECI is nil during the Year of Assessment

Annual Corporate Income Tax Submission

The annual filing deadline for Companies is by 30 November every year. IRAS however provides a grace period of extra 15 days extension if Companies file their corporate income tax by means of online submission to IRAS website. https://www.iras.gov.sg
Refer to the diagram below. Check the due dates if your business financial year ended on 31 December, 30 June or 31 August respectively.

FYE Financial Period YA Due Date
31 Dec 1 Jan 2017 to 31 Dec 2017 2018 30 Nov 2018
30 Jun 1 Jul 2016 to 30 Jun 2017 2018 30 Nov 2018
31 Aug 1 Sep 2016 to 31 Aug 2017 2018 30 Nov 2018
1 FYE refers to Financial Year End
2 YA refers to Year of Assessment

Conclusion for Corporate Reporting Deadlines

A typical company in Singapore usually needs to remember 5 corporate deadlines.

  • AGM (to be held internally)
  • Annual Filing to ACRA
  • ECI to IRAS
  • Annual Corporate Income Tax to IRAS
  • GST returns (if company is GST registered)

Learn more on corporate tax here.

Business Licence and Permits

Most business establishments in Singapore require a business licence or permit prior to commencement of commercial operations.
The application of business licence is primarily governed under Licence One Authority . Secondary Government Bodies that issue licences involves Authorities such as Agri-Food and Veterinary Authority (AVA) depending on the business sectors that one pursue into. We will elaborate much more in the next paragraph.

Local business owners may apply the type of business licences online via Licence One Authority portal using their SingPass. As for foreigners, one may engage a corporate secretary or lawyer to carry out the licence application since he/she does not have a SingPass.

Common Types of Business Licence

Here are a list of common business licences for various industries:-

Licence for Tourism Business

Business owners who wish to carry out a tour agency must obtain a Travel Agency Licence from the Singapore Tourism Board. There are certain criteria to be met before the granting of business licence.
Total Fees for Licence Application: $400
Licence Validity Period: 2 years

Licence for Recruitment Agency

Business owners that intends to operate a recruitment agency must apply for a business licence issued by Ministry of Manpower. Please take note that there are strict rules for this type of licence application including prior approval of business premise to carry out recruitment business.
Total Fees for Licence Application: $500
Licence Validity Period: 3 years

Licence for Training Institution

There are quite a number of approvals required by government agencies before one can operate a training institution in Singapore. The primary licence is granted by Ministry of Education. Apart from this, business owners must ensure proper visa and permits of foreign students are properly approved and only for the sole purpose of receiving education in Singapore. On top of this, depending of the type of subjects lectured, potential students (particularly foreign students) must obtain a pass in certain qualifying tests before training institution can enroll the particular student into Singapore.
Total Fees for Licence Application: Depends
Licence Validity Period: Depends

Licences for Food & Beverage Business

Those who wish to venture into F&B industry must obtain the following licence and certifications:-
Refer to the scenario below, Cindy intends to start a dessert shop selling various types of desserts ranging from ice-cream, frozen yogurt to some fancy cold drinks. Firstly, Cindy may need to check whether the premise she intends to rent is approved for use as a food & beverages outlet by the local land agency. Secondly, she needs to acquire a Food Shop Licence granted by National Environment Agency. Thirdly, if the dessert ingredients needed to be processed abroad (under the category specified as processed food products by AVA), Cindy would then require to obtain FCD (Food Control Division) certification from Agri-Food and Veterinary Authority of Singapore (AVA). On top of this, if Cindy wish to sell liquor products, she needs to obtain a Liquor License from the Liquor Licensing Board.
Last but not least, if her desserts are to cater to Muslims in Singapore, she needs to obtain a Halal certification from MUIS (Islamic Religious Council of Singapore).
Total Fees for Food Shop Licence: $195
Licence Validity Period: One year

Total Fees for FCD certification: Free to $378 depending on the scale and food types
Licence Validity Period: Depending on the scale and food types

Licences for Event Management Firms

Event Organisers plan, manage and execute events on behalf of their clients. Depending on the types of events carried out, not all event management firm requires a licence to operate. Firms that require a licence prior to execute certain types of events includes:-

  • Carrying out any events that involves fireworks or prohibited element
  • Event that involves a huge public gathering that require proper public order and management
  • Tender a place for pasar malam operations
  • Large scale exhibitions or trade shows
  • Concerts and public displays

Due to the nature that involve many certain types of events, there will be many different government authorities that could issue the licence.
For instance if one intends to carry out a public marathon event, it may involve licence from Land Transport Authority and a temporary permit from the Singapore Police Force.
Total Fees for Licence Application: Depending on Authority that issue licence.
Licence Validity Period: Depending on Authority that issue licence

Other Business Affairs and Licence Application

We have documented a full list of Relevant Government Ministries should your operations require certain approvals or agreements from them. It is recommended to first obtain professional advice from third parties before making an appointment with Government Ministries.

Government Tax Exemptions, Grants and Incentives for New Start-Up Companies

From IRAS

Newly formed companies registered in Singapore may enjoy considerable tax exemption for the first 3 Years of Assessment (YAs). For first full three years of establishment, a 100% full tax exemption on first $100,000 chargeable income will be granted followed-by a next 50% full tax exemption on the next $200,000 chargeable income will be granted.
In other words, out of a chargeable income of $300,000, $200,000 is exempted from tax.

In addition, all companies in Singapore will enjoy a corporate tax rebate of 20%, capped at $10,000 for YA2018.

For instance, your company have a chargeable income tax of $535,000 for YA2018 (for financial year ended 31 December 2017) and is within the first three year of assessment. The total tax payable is only $46,950

Chargeable Income % exempted from tax Amount exempted from tax
First $100K @ 100% = $100K
Next $200K @ 50% = $100K
Total $300K = $200K

In addition, all companies in Singapore will enjoy a corporate tax rebate of 20%, capped at $10,000 for YA2018.

For instance, your company have a chargeable income tax of $535,000 for YA2018 (for financial year ended 31 December 2017) and is within the first three year of assessment. The total tax payable is only $46,950

tax effect after exemption

Imagine if there is no tax exemption.

tax effect without exemption

The tax payable is $80,950 !
Hence, with tax exemption, a total of $34,000 tax will be saved.

NB:
All companies in Singapore are charge a flat corporate income tax rate of 17%.

The above tax exemption for newly start-up companies are being granted automatically by IRAS and companies need not apply.

From SkillsFuture Singapore

The government of Singapore provides a free learning credit of $500 to all Singaporeans aged 25 and above.
SkillsFuture Credit’s purpose is to encourage Singaporeans to upgrade their skills and improve their capabilities through learning and development.
Hence, employers of Singaporean companies can request their employees to sign-up for eligible courses.
There are various courses available. Popular fields of studies are:-

  • Information and Communications: digital marketing, web development, online business, ecommerce etc
  • Engineering: various related courses
  • Personal Development
  • Accounting, Banking and Finance courses
  • Business Management
  • Language Skills
  • Productivity and Innovation: courses such as Photoshop, video editing or product innovation courses
  • Workspace Safety and Health

For illustration:
If the course costs $788, the employer will just require to spend $288 as $500 will be subsidised under SkillFuture. The trainer will request $500 from government.

Application:
Employers or individual Singaporean can apply online via https://www.myskillsfuture.sg

Common Seal

What is a common or corporate seal?

Common seal represents the official seal of the company. It is commonly used to seal official company documents such as share certificates, corporate resolutions, agreements, essential financial documents and certain minutes of meetings.

Common Seal Usage in Singapore

At recent times, common seal usage in Singapore has been rare. It’s usage is more towards secretarial compliance rather than real world usage.
For instance, issuance of hard copy of share certificates is not common between business owners as shareholding details are all documented online in the ACRA portal.
Nowadays, common seals are only usually used in government contracts, tenders and other important agreements.
Corporate secretaries may advise business owners to purchase a common seal for $100. Having said that, business owners may decide not to own one until there is real necessity arise to seal any documents in the future.
On the other hand, a corporate rubber stamp is more commonly used than a common seal in most establishments in Singapore.

Other Corporate Requirements

Personal Data Protection Act (PDPA)

During the past several years (particularly mid of 2016 to present), the Personal Data Protection Commission (PDPC) has been proactively reaching out to companies in various sectors to increase awareness and compliance with the PDPA, which is a law that applies to all organisations’ collection, use and disclosure of personal data in Singapore.

Businesses in Singapore are require to take a proactive approach in fostering a data protection culture within the organisation to minimize the risk of data breaches and enhance the trust and goodwill with their customers.

Since mid of 2016, nearly 40 organisations in Singapore have been found in breach of PDPA and were subsequently issued warnings, directed to pay financial penalties or given advisory notices.

Hence, as a requirement under PDPA, every organisation is mandatory to designate at least one individual as a Data Protection Officer (DPO). The appointed DPO must then register at https://www.pdpc.gov.sg/dpo-contact in order for DPO to keep abreast of personal data developments and compliance with the PDPA. A DPO can be director or staff of an organisation.