Why Singapore for Business?
Singapore consistently ranks as the world's easiest place to do business. The city-state offers a pro-business environment with minimal bureaucracy, strong rule of law, and excellent infrastructure.
Key Advantages
- Low corporate tax: 17% flat rate, with exemptions reducing effective rate further
- No capital gains tax: Profits from asset sales not taxed
- Extensive tax treaties: 80+ double taxation agreements
- Strong IP protection: World-class intellectual property regime
- Gateway to Asia: Strategic location for regional operations
- Stable currency: Singapore dollar is one of Asia's strongest currencies
Unlike Delaware LLCs, Singapore Private Limited companies (Pte Ltd) are recognized globally, have clearer ownership structures, and don't have US self-employment tax issues for non-US income.
Company Structures
Private Limited Company (Pte Ltd)
The most common structure for foreign entrepreneurs. A separate legal entity with limited liability.
| Feature | Requirement |
|---|---|
| Minimum Directors | 1 (must be Singapore resident) |
| Minimum Shareholders | 1 (can be 100% foreign-owned) |
| Paid-Up Capital | Minimum S$1 (no maximum) |
| Company Secretary | Required within 6 months |
| Registered Address | Required (Singapore physical address) |
| Annual Filing | Required with ACRA |
You must have at least one director who is a Singapore citizen, PR, or valid work pass holder. If you're on an Employment Pass or EntrePass, you can be that director.
Other Structures
| Structure | Use Case | Considerations |
|---|---|---|
| Sole Proprietorship | Small, single-owner businesses | No limited liability, simpler but risky |
| Partnership (LLP) | Professional services firms | Limited liability for partners |
| Branch Office | Extension of foreign company | Parent company remains liable |
| Representative Office | Market research only | Cannot engage in commercial activity |
Incorporation Process
Step-by-Step
- Reserve company name: Via BizFile+ portal (S$15), valid 120 days
- Prepare documents: Constitution, director consents, shareholder details
- Submit application: Online via BizFile+ (S$300 registration fee)
- Receive approval: Usually same day or within 1-2 days
- Post-incorporation: Open bank account, register for GST if needed
Required Documents
- Company constitution (standard or customized)
- Director identification and consent forms
- Shareholder details and shareholding structure
- Registered address proof
- Description of business activities (SSIC codes)
DIY vs Agent: You can incorporate yourself via BizFile+, but most foreigners use a corporate services provider (S$500-2,000) who provides nominee director, registered address, and company secretary services.
Work Pass for Business Owners
EntrePass
The entrepreneur visa for those starting innovative, scalable businesses.
- Eligibility: Must meet at least one criteria (VC funding, incubator support, IP ownership, track record, or research collaboration)
- Company: Must be registered with ACRA, you hold 30%+ equity
- Capital: S$50,000 minimum paid-up capital (or VC funding)
- Renewal: Must show business progress (spending or local hiring)
A restaurant, retail shop, or simple e-commerce business won't qualify. MOM wants innovative ventures that create local jobs and contribute to Singapore's economy.
Employment Pass (Self-Sponsored)
If you've incorporated a Pte Ltd and need to work in Singapore, your company can sponsor your Employment Pass.
- Company must be operational with business activity
- Minimum salary: S$5,000/month (higher for older applicants)
- Must pass COMPASS points framework
- Scrutiny on self-sponsorshipāgenuine business required
ONE Pass
For high earners (S$30,000+/month) with flexibility to run businesses.
- Can start and operate businesses
- Can work for multiple employers
- 5-year validity
Corporate Tax
Tax Rates
| Chargeable Income | Effective Rate |
|---|---|
| First S$10,000 | 4.25% (75% exemption) |
| Next S$190,000 | 8.5% (50% exemption) |
| Above S$200,000 | 17% |
Startup Tax Exemption
New companies qualify for additional exemptions for first 3 years:
- 75% exemption on first S$100,000
- 50% exemption on next S$100,000
- Effective rate can be as low as 4.25% on first S$200,000
GST (Goods & Services Tax)
- Current rate: 9% (increased from 8% in 2024)
- Registration required if revenue exceeds S$1 million
- Voluntary registration available
- Input tax credits available for business expenses
US Tax Considerations
As a US person owning 10%+ of a Singapore company, Controlled Foreign Corporation (CFC) rules may apply, requiring you to report and potentially pay US tax on undistributed company profits.
Key Issues for US Owners
- Form 5471: Required annually for US shareholders of foreign corporations
- GILTI: Global Intangible Low-Taxed IncomeāUS tax on certain foreign company earnings
- Subpart F: Certain passive income taxed currently to US shareholders
- PFIC: If company is a Passive Foreign Investment Company, punitive tax treatment
- FBAR: Signature authority over company bank accounts requires reporting
Structuring Considerations
- Consider "check-the-box" election to treat Pte Ltd as disregarded entity
- May eliminate CFC complexity but creates other issues
- Consult US-Singapore cross-border tax specialist before structuring
Employment Law Basics
Hiring Employees
- Employment Act: Covers most employees earning ā¤S$4,500/month
- CPF contributions: Mandatory for Singapore citizens and PRs (employer 17%, employee 20%)
- Foreign worker levy: Additional cost for hiring non-Singapore workers
- Foreign worker quota: Limits on proportion of foreign workers
Standard Benefits
| Benefit | Statutory Minimum |
|---|---|
| Annual Leave | 7 days (first year), increasing to 14 days |
| Sick Leave | 14 days outpatient, 60 days hospitalization |
| Maternity Leave | 16 weeks (government-paid scheme) |
| Paternity Leave | 2 weeks (government-paid) |
| Public Holidays | 11 days per year |
Ongoing Compliance
Annual Requirements
- AGM: Annual General Meeting within 6 months of financial year end
- Annual Return: File with ACRA within 7 months of AGM
- Financial Statements: Prepare and (if required) audit annually
- Tax Filing: Corporate tax return (Form C-S or Form C) by November 30
- GST Returns: Quarterly if GST-registered
Audit Requirements
Small companies may qualify for audit exemption if they meet 2 of 3 criteria:
- Revenue ā¤ S$10 million
- Assets ā¤ S$10 million
- Employees ā¤ 50